2 - UTRGV Faculty Web
2 - UTRGV Faculty Web
Starting an E-business
Dr. John P. Abraham
• start a business in Texas. I have a lecture
with forms for this.
• Complete all necessary requirements to
start a business in texas.
Determine what model of
• Most common is Business to consumer
• If you are a manufacturer, business to
business is the way to go.
• If you are a manufacturer, selling directly
to the customers might impede your
Selling directly to consumers
• It appears starting a business with either
eBay or Amazon (or both) initially would
• Consumers are now used to going to one
or both of these websites for purchases.
• You have a built in customer base.
Before launching your business
• Get registered with a name
– Network solutions, or another registrar
– Try to get a .com. Hard to get. .co would be
your second choice.
– Choose a name that is short and easy to
Agencies that controls
– ICAAN (internet corporation for assigned
names and numbers) oversees the domain
– W3C (weld wide web consortium) sets
standards for HTML and web
– IETF (internet engineering task force) sets
standards for Internet architecture.
Get a broadband service
• ISDN – integrated services digital network
• DSL digital subscriber line 144 Kbps to 8
Mbps. It is asynchronous.
• T1 – 1.5 Mbps up and down
• T2 is a combined foru t1 lines to give over
• T3 is comnbination of 28 t1 lines– up to
Build a website
• Start with Static (passive) web presence
– Just showing your presence
• Advertise on the web to generate traffic. This is
what you gain from being on eBay or Amazon.
• When advertising know how many people will be
exposed to your ad, and how long. Checkout
google, ebay, microsoft, aol, ask, etc. for
• Register with search engines
• Titles and metatags are important for each page.
Create a Web Service
• Other web services can integrate with
Determine how to collect payments
• Bank accounts
– Wire transfer
• Setup credit card services
• Google payment
• Integrated with online sales
• Automatic completion of reporting forms
(sales tax, w-2, 941s and so on)
• Inventory control, ordering (PO), receiving,
• Must collect tax if sold in Texas.
Determine how you want to ship
UPS, FedEx, USPS
Create volume shipping rates
• Move up to interactive dynamic web pages
• This is what we have been covering so far
– AJAX, PHP, Ruby on Rails, ASP, etc.
• If you are a BtB, register with an alliance
such as the airline alliances, hospitality,
• Become a business at social networks,
such as Facebook, Twitter, etc.
• E-Mail marketing (more later)
– Must know target (reach)
– Use customer names where possible
– Different languages (www.logos.it - does
translations to 20 languages)
– Consider outsourcing – Boldfish.com,
Marketing Issues (2)
– Frequent miles
– Directcoupons.com, coolsavings.com, etc.
– TV, movies, newspapers, magazines
– Online advertising
• Linking your site, banner ads, search engine ads,
Marketing Issues (3)
• Buying and selling ads on the web
– Put your ad on other popular sites that sells
– Sell banner ads on your site.
– Cost is based on hits, pay-per-lead, pay-perclick, pay-per-lead,etc.
– Webcasts (Victoria Secret).
Crisis management (within company)
Press releases www.prweb.com
CRM customer relationship management
– www.datadistilleries.com, egain.com
– Record customers’ behavior
Online Monetary Transactions
– Merchant account with a bank
– www.cybercash.com www.icat.com will set up
accounts so that you can accept credit cards online.
• Debit Cards and debit-it.com (just give bank
• Digital currencty – ecash.com –
• Smart cards
Monetary transactions (2)
• Micropayments – save on credit card fees
– Combining many small charges into one
charge, like a telephone bill.
• Check free
• Electronic Fund transfer (for large
• Bank credit line
• Privacy – a major concern in web practices.
• Tracking devices
• Cookies – advantages of cookies come at the
price of security.
• Keystroke cops (employer/employee tension)
• Child pornography
• Intellectual property – napster
• Internet taxation
• E-advertising surpassed cable advertising
and catching up with TV adertising.
• 43 billion 2013
• Print, TV, Radio, Direct Mail, Yellow Pages
• National Advertising
– Dominated by large holding companies like
Omnicom or WPP
• Local Advertising
– Small businesses
• Pricing vary based on quantity.
search engine marketing (SEM)
social media marketing
many types of display
advertising (including web
• mobile advertising.
• comprising an entire email or a portion of
an email message
• Email marketing may be unsolicited, in
which case the sender may give the
recipient an option to opt out of future
emails, or it may be sent with the
recipient's prior consent (opt-in).
Search Engine Marketing
• SEM, is designed to increase a website's
visibility in search engine results
• Search engines provide sponsored results
and organic (non-sponsored) results
based on a web searcher's query.
• Search engines often employ visual cues
to differentiate sponsored results from
Social media marketing
• commercial promotion conducted
through social media websites.
• Many companies promote their products
by posting frequent updates and providing
special offers through their social media
• Facebook captures your search activities
posts product sensitive ads immediately to
your page. 2.68 billion revenue in 2014
• Ads delivered through wireless mobile
devices such as smartphones, feature
phones, or tablet computers.
• There are more mobile devices in the field,
connectivity speeds have
• Proximity based advertising
• Banner Ads
– Some relevance to content viewed, may be
directed to locality.
• Search Linked Ads
– Related search terms
• Context linked Ads
– Related Content on the page
– Up to Google, or Yahoo’s capability to
Advertising money (year 2016)
• 300 billion with 1-2% growth per year
• $33 billion spent for internet
advertisingwith rapid grown.
• (Google’ revenue is ~19billion)
Search Engine Marketing
• Per click cost per keyword
– Example laptop $2.00 per click
• Bid on this, based on bid an ad may go
first place to second place, etc.
• Bid is the determinant of ad position
• Bidding on the word takes place
Auction for keyword
Internet user enters a search term
Gets a page with results
Also shows ads to the side
If a user click on ad – pay for click
Top ads are clicked most
Advertisers submit bids stating maximum pay for
• Ad with highest bid is displayed on top
• Advertisers can change their bid frequently
Generalized Second Price Auction
• New mechanism used by search engines
to sell online advertising.
– Advertiser submit bids stating their maximum
willingness to pay for a click for a key word.
– If a user click an advertiser that is not on top,
the advertiser pays an amount equal to the
next highest bid (bid for advertiser i+1)