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Doing Business in the Wired World
May 1997 (vol. 30 no. 5)
pp. 56-61

Since 1993, use of the Internet and the World Wide Web has exploded, creating a global "infostructure" to support commerce. Today in New York, costs to publish on this infostructure are as low as $3,000 for server hardware and software, and $650 per month for a shared T1 connection. Individual dial-up access costs around $15 per month and continues to fall. This and the Internet's usefulness will capture an estimated 377 million users by 2000.

The 1997 Nielsen-CommerceNet survey of Internet demographics estimated 50 million people over the age of 16 in the US and Canada had Internet access. About 37 million had access to the Web. Both the Nielsen and Hermes project surveys found Internet users are well educated and affluent-ideal targets for marketing. An estimated 5.6 million users have already purchased products over the Internet, and this method was especially attractive to those who valued convenience more than price.

Thus the Internet is rapidly becoming the largest interactive multimedia infrastructure for marketing and is supplanting some traditional media.

Although in its infancy, e-commerce promises to dramatically alter the structure and processes of commerce. Managers will have to invent new business models that reemphasize scale, differentiation, and brands to effectively compete on a noisy infostructure with low transaction costs. They will also have to spend substantial time redesigning transaction processes and participating in industry groups to develop new e-commerce conventions. Effectively implementing these strategies and simultaneously reconciling new and existing business models will be key to a firm's success.

Citation:
Ajit Kambil, "Doing Business in the Wired World," Computer, vol. 30, no. 5, pp. 56-61, May 1997, doi:10.1109/2.589911
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