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E-Commerce Essay, Research Paper

The history of the Internet dates back to the days of the Cold War between the United States and Russia in the 1960’s. The United State’s Department of Defense began by using a very basic Internet, which consisted of four computer mainframes, which were connected to each other via phone lines. These connections were used to share military information and its primary use was to communicate military research. However, these computers differed from our modern day computers. They were very large, some of which filled the space of an entire room and they also used vacuum tubes for processing information. This led to a very slow processing of information and to very exasperating repair measures. By the 1980’s, the use of the Internet expanded to Scholarly Research but it was still banned from commercial use. In 1991, this ban was finally lifted and the world was able to share information via the World Wide Web (www.).

One ‘connects’ to the Internet via a built in modem on their computer. This modem then connects you to a Server, which subsequently connects you to Web Servers and to individual users. Web Servers contain the web pages where information can be accessed and individual users can be contacted via ‘instant messages’ or through e-mail. What makes the Internet so useful and convenient is that with the click of a mouse one can access information from someone’s web page who lives thousands of miles away. A user can either be a person at home or it can be an actual business. People can use this at home to find information on basically anything that they want. For example, the Internet can be used to buy plane tickets and to make hotel reservations. Basically, one can plan a whole trip on their home computer. Businesses also use the Internet for many of their daily transactions. These include consumer transactions and business-to-business transactions. This new method has led to a new era in ‘e-commerce’.

Webster defines electronic commerce or ‘e-commerce’ as “using computer networks to conduct business, including buying and selling online, electronic funds transfer, business communications, and using computers to access business information resources. However, the focus of this paper will be to discuss how the Internet has changed the face of ‘e-commerce’. Business’ can now be open 24 hours a day and 7 days a week. Consumers can just point and click at a product on a website and that company will ship that product to the person’s home – once the proper information is filled out. Thus, consumers are not restricted to a ‘closing time’ and businesses are able to expand into the global market by simply making an appropriate web page. “For businesses, online commerce is enticing mainly because of its intense efficiency. Once a web site is built it can take orders round the clock and field countless customer service queries, without losing its temper or requiring coffee breaks. Product catalogs can be updated constantly, without extra trips to the printer. And up to the minute data about what’s selling (and what isn’t) becomes accessible with just a few mouse clicks”. (Wall Street Journal, p. 3).

The next question to answer is how ‘money’ is used in these transactions. Credit Cards are the most common method of payment. A consumer can simply type in the information of their credit card number at the time of purchase and the business can then process the card and bill the consumer for the product/service. However, this type of transaction is susceptible to ‘hackers’. Hackers are people who use the Internet to steal information from other users and/or web servers. They could easily ‘steal’ one’s credit card number through such a transaction and then use it to buy other goods over the Internet. This posed a problem to businesses and to consumers until online payment systems were made which encrypted one’s information. One of the most common online payment systems is Cyber Cash. “Cyber Cash’s Secure Internet Credit Card Service delivers a safe, real-time solution for merchant processing of credit card payments over the Internet. The Credit Card Service lets any consumer with a valid credit card buy from any Cyber Cash enabled merchant . . . . Safe, private and easy to use. Protected by the highest allowed levels of internet encryption with assured authentication.” (iologic). These types of Services have allowed for safer online transactions, which in turn has allowed for online businesses to increase their profits. However, there is still the chance of a hacker obtaining your information – although it is less likely.

A current statistic shows that one if five businesses use e-commerce as one of the ways that they conduct business. (NUA). When one considers the amount of small businesses then this number does not seem so small. Almost every large business conducts business via the Web and there are many businesses, which sprung out because of the web. One example is Amazon.com. Amazon.com is an Internet based company, which began by selling books exclusively over the Internet. It has since expanded to include other commodities such as music, electronics and toys. It began as a small company earning millions annually but has since ballooned to annual sales in the billion-dollar range. In 1999 they earned $1.8 million and are projected to earn $6 billion in 2002. That’s almost a more than a 300% increase! Surely, Amazon is getting an increasing challenge from traditional retailers such as Barnes and Noble. However, their advantage is that they do not have to worry losing revenues in individual stores. Their only ‘store’ is on the Internet. Granted, many people still enjoy the comfort of walking into a Barnes and Noble and browsing through the actual books in person but many people also enjoy the time saved from purchasing the book directly from home.

E-commerce has also helped in business-to-business transactions. Companies can purchase goods from each other and receive up to the minute information. Most of the transactions via the Internet occur in this manner, “In the U.S., Internet commerce this year will total anywhere from $31 billion to $51 billion . . .. Zona Research Inc. . . says more than three quarters of the total will be business to business commerce.” (Wall Street Journal, 1998). Some people may wonder why this would be the case but when once considers amount of goods businesses buy then it is not that astonishing. Businesses buy goods in bulk and the Internet has made these transactions occur much swifter and much more conveniently – especially when the transaction is transcontinental. Consumers are also still buying more from commercial retailers instead of online. One of the reasons for this is because some people fear having their credit card number stolen. People are also more inclined to buy certain products when it is in actual view. For example, many consumers will not buy clothing online because most people prefer ‘trying on’ the clothes prior to purchase. The Internet cannot provide this luxury. However, buying online can be more convenient when one already knows the product to be purchased.

The Internet has come a long way from what it once was in the 1960’s and will probably have even more of an impact in the years to come. Computers have also become a part of everyday life in America and the use of the Internet via the computer has become one of the most important tools we have to access information and to communicate with each other. Businesses have taken advantage of this situation and e-commerce is quickly becoming an integral part of everyday business too. The Internet may someday become the principal way for consumers to buy goods. However, this will take some time to get used too but in the end, it seems as if the Internet will reign supreme.


www.iologic.net/cybercas.htm. Cyber Cash Info.

www.businessweek.com:/2000/00_08/b3669091.htm?scriptFramed ‘Suddenly, Amazon Books Look Better.’ Business Week. 2/21/00.

www.nua.ie. Nua Internet Surveys.

www.interactive.wsj.com/public/current/articles/SB912719949440084500.htm. ‘Click and Buy. Why and where Internet Commerce is succeeding.’ Wall Street Journal. 12/7/98.

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