Sir Tim Berners Lee created the World Wide Web in 1989. In the following 10 years it became a business phenomenon, By 1999 it was said that AOL had 2000 millionaires working for it. This internet portal was valued more highly than General Motors, yet with only a tiny fraction of its sales. An average of nine start-ups a week in the USA, mainly internet based, but all riding on the internet boom, were asking for and getting public investment in their share offerings.
However, following on from some share price falls in early 2000, on Friday 14 April 2000, the bubble burst spectacularly with Wall Street suffering its largest one-day losses in history. The stock market went on to lose around $2 trillion dollars in value in that one week. Large numbers of transactional website, some with massive funding, disappeared in the aftermath of the collapse. This event caused vast numbers of investors to lose large amount of money and shook confidence in the world wide web as a means of doing business. New start-ups barely reached one a week through 2001. There was then as much pessimism about the internet as there was unreasonable optimism before.
However, in the short time since then a more realistic and focused digital economy has emerged. The UK Office for National Statistics, quoting government policy, states:
"E-commerce is likely to have a huge impact on the way we do business. It has the potential to lead to dramatic growth in trade, increase markets, improve efficiency and effectiveness, and transform business processes. In recognition of its significance in the future performance of the economy, the UK Government set itself the target of becoming the best environment in the world to do e-commerce." (Source: "Our Competitive Future: Building the Knowledge-Driven Economy, DTI 1998 White Paper, CM4176")
Growth of the consumer base:
The major factor in driving any business is the availability of customers. In spite of the demise of the dot com bubble, there has been a massive growth in the numbers of potential customers connected to the internet.
By the second quarter of 2004, over 50 per cent of all UK households (12.8 million) were able to access the internet from home, compared to less than 14 per cent at the height of the dot com boom in 1999.
Furthermore, although dial up still dominates, broadband technologies (ADSL and cable modem) have grown hugely since the beginning of 2003 and are catching up with dial up. Other statistics show that "always on" access stood in July 2004 at over a third of the market and is still rising rapidly. Although this in itself does not mean people will use the internet to acquire goods and services, it is a large potential market for organisations that manage to put together the right offer.
Activity 1 - When is there the need for speed?
Which of these requires fast, high quality internet access and why?
- buying the latest CD of your favourite band?
- Yes - you would need fast, high quality internet access to buy the latest CD online because, if you wanted to listen to it, slow internet access would not allow this.
- listening to internet radio?
- Yes - you would need fast, high quality internet access to listen to internet radio because, without it, you would not be able to listen properly due to the inevitable buffering.
- downloading MP3s?
- Yes - without fast, high quality internet access, a large file would take a long time to download, or may not download properly at all.
- downloading videos?
- Yes - without fast, high quality internet access, a large file would take a long time to download, or may not download properly at all.
- buying a basket of 100 goods from an online grocer?
- No - on an online grocer, you would only be looking at text and, sometimes, pictures - this would not require fast internet access.
- creating a travel itinerary for a round the world trip?
- No - this would more likely be done by typing and perhaps booking things which should not need fast, high quality internet access.
- subscribing to a news service?
- No - unless you wanted to watch videos of news reports online, you would not need fast, high quality internet access.
- looking up information on the driving test?
- No - you do not need fast, high quality internet access to look up what is largely static information.
The drive for productivity:
A legacy of the dot com boom is that a great deal of discussion about the internet concerns how much money can be made or lost by embracing web technologies.
However, there is another side that is important, not just to the private sector, but to the public serctor as well.
How much money can be saved by employing web technologies?
Howard S. Charney, a Senior Vice President for Cisco Systems, in a keynote speech delivered around the world in 2002 to governments, education and industry, suggested that the internet would be the engine of a new business revolution. This revolution would be based on productivity, or increased worker output per hour. His thesis was that in the first "Information Stage", the world wide web acts as a vast store of information based on billions of websites. It then progresses to the "Interaction Stage", being thehub of e-commerce and e-services. The third phase is the "Collaboration Stage". Organisations will use "new technologies that link people together online such as instant messaging, threaded discussions, video-conferencing, web-based meetings and virtual conferences. And it sets the foundation for such exciting applications as digital collaboration in the design of products and services, e-marketplaces, telemedicine and e-learning". Finally the internet will transform our lives, becoming the hub of everything we do - the "Transformation Stage". (Source: Cisco)
Activity 2 - Investigate loval government online:My local county council website can be found here.
The main information it supplies is displayed to the right: →
There is a large quanitity of information supplied on this website, ranging from information on allotments to recycling bins to zebra crossings; there is an A-Z of services on the website, (also displayed on the right).
A benefit for the council of having this information online is that the information they have collected is not wasted as it is easy for the general public to access. This is also a benefit for the consumer as it allows them to view the information that has been provided for them. Overall, having this information online rather than as pamphlets or as information possessed by council officers is better because it allows more people to access it using the internet.
The website offers several opportunities for the consumer to interact with either other members of the public or with the people who run the website:
The website allows you to:
- apply for:
- benefits
- blue badge
- bus pass
- jobs
- report:
- flytipping
- missed bin
- pothole
- street light
- pay for:
- council tax
- garage rents
- housing rents
- sundry
- book:
- adult education
- register a birth
- register a death
- theatre show
The internet has become firmly established as a major source of information for many people in the developed world. Nevertheless, e-commerce and e-service delivery is still a minor player in world markets when compared to traditional bricks and mortar organisations, but it is becoming more persuasive very rapidly. Technology companies and a number of educational bodies use collaboration technologies, although they have yet to gain a firm foothold in the mainstream market. Message boards and hosted forums are a popular means of providing after-sales support.
A number of companies have experimented with live chat as a means of supporting people in buying goods such as computer hardware, providing help with installation of products, hiring cars, and buying products as diverse as sheet music and bicycles. However, there are significant costs involved in maintaining live chat, not least staffing, especially on sites hoping for 24/7 global reach. As a consequence, a large number of organisations have quietly dropped these services.
Activity 3 - Find out about live chat:
Many organisations have experimented with live chat as a means of giving improved customer service; e.g. Musicroom.
An ISP (Internet Service Provider) could use live chat to help its customers by allowing them to speak face to face with staff which would enable them to gan help more easily if they are experiencing difficulty with a product or completing a payment online.
One successful instance of the use of a number of these technologies is Channel 4 TV. The Channel 4 website has a community section with over 58,000 registered members. It allows viewers to use message boards to discuss programmes and issues arising from them, as well as chat directly with celebrities, directors and stars of shows.
The advantages of using live chat for a web-based organisation are:
- Live chat allows you to reach anyone anywhere immediately, no matter what time of day it may be for anyone involved - basically, if someone lives far away but has difficulty with a product, they won't have to worry about travelling a long way to seek help because they can essentially reach that help from their own homes.
- The customer can choose who they want to speak to - e.g. a sales representative - and can find them immediately - in a shop, that member of staff would have to be called to a certain place which would take time.
- There are some human ways of communicating which will not translate on live chat, such as eye contact - if the staff member helping the customers on live chat cannot make eye contact with the customer, they are unable to tell if the customer understands what is being said, or vice versa.
Activity 4 - Investigate commercial benefits of community websites:
Below is a list of all of the different communication services available through the Channel 4 Community website:
Channel 4 run message boards, live chat and other community offerings as they arguable keep people interesting in their porgrammes, etc which is obviously good for viewing figures as a broadcaster.
Any adverts on these forums are there so that they will generate income and get people looking at other things they could spend money on. Therefore, other companies will pay Channel 4 money for placing ads there.
In terms of models for other content providers, this could prove the point re: capturing and keeping an audience, interactivity re: message boards, live chat and possibly local based interest if it's done at a regional level; (e.g. What's going on in East England? etc).
