Str~teyic Risks Associ~te4 witb Business i.}ses oCthe Internet
1. Targeting right market segments.

It is important for advertisers to spend their advertisement dollars wisely. They can achieve this by using appropriate methods of advertising and targeting the right market segments. Two different types of advertising are entertainment ads and traditional advertising. Entertainment ads focus on entertaining a customer whereas traditional advertising is more direct and usually positioned between rather than within editorial items. When the entertainment ads work well, they can be quite successful in drawing customers to their site; however, it is very easy for this type of ad to flop resulting in no one returning to visit the advertisement site after they see it once. Traditional advertising has better readership. It can

also be used well in targeting the right market segments. For instance, the ESPN Sports page would be a good site to place ads by Gatorade and Nike. Sports minded people that might be interested in these products would be likely to access these pages. A good reference for researching this topic further is at ~~iIi~ing.LgQ.

2. Security

One of the main factors holding back businesses’ progress on the Internet, is the issue of security. Customers do not feel confident sending their credit card numbers over the Internet. Computer hackers can grab this Information off the Internet If It Is not encrypted. Netscape and several other companies are working on encryption methods. Strong encryption algorithms and public education in the use of the Internet should increase the number of online transactions. After all, getting your credit card number stolen in every day transactions is easier. In addition, securing private company information and enfordng copyright issues still need to be resolved before the business community really takes advantage of Internet transactions. There are, however, currently some methods within Netscape for plaong the information online yet restricting it to only certain people such as company employees.

3. Consumer confidence

Consumer confidence is essential for conducting business online. Although related to security, consumer confidence also deals with feeling confident about doing business online. For instance, can consumers believe that a company is legitimate if it is on the Internet, or could it be some kind of boiler room operation? Also, companies must be able to substantiate their advertising claims If they are published online. These are some of the issues that concern the Federal Trade Commission as well as the future of Internet commerce. After all, If consumer confidence Is low, businesses will not succeed.

4. Speed of network access

The speed of network access is a risk for businesses. If businesses spend a lot of money for fast network connections and design their sites with this in mind yet customers have lower speed connections, this may result in less consumers accessing their site. Less consumers accessing their site most likely results in lower profits which is in addition to the extra cost of the faster network connection. On the other hand, if the company designed for slower access yet customers have faster access, they could still lose out in profits. Currently, some of the options that home users have to choose from are traditional modems, ISDN, and Cable Modems. Traditional modems are cheaper but the current speed is a maximum of 28.8 Kbps. ISDN is faster at 56 Kbps, but more expensive. Cable modems are faster yet with a speed of 4 Mbps. However, two-way interaction with a cable modem needs some more testing to be sure that it works as well as ISDN.

5. Picking Wrong Industry Standards

Along these lines of picking industry standards, companies must also be sure that the Web Browser that they develop for is the standard. Otherwise, some of the features that they are using to highlight their site may not work. Currently the defacto standard is Netscape. There also needs to be a standard language that adds high quality features such as animation, so that software applications written for the Internet will run on all the different types of architectures customers may have. Major computer industry players have backed JAVA by Sun Microsystems. So while some areas are becoming standardized, companies must be alert to industry changes to avoid becoming obsolete in hardware, software, and data communications.
6. Internet Community & Philosophy

The Internet was originally developed with a philosophy for sharing information and assisting others in their research. The original Intent emphasised concern for others, technological advances, and not for profit organizations.

With the lifting of commercial restrIctions in 1991, busInesses are now joinIng the Internet community. As with any small town that has a sudden Increase In population, fast growth can cause problems. Old residents could create animosity if they feel that the new residents are taking over their community and causing congestion and prices to increase. Businesses need to be conscious of thIs phenomenon.

While businesses can expect help from Internet users, businesses will lose this help If they only use it to make a quick profit. As in a large city, people will start to feel less like helping others in need. Businesses will be more successful on the Internet if they can emphasize how they can help add value to the Internet rather than focusing on how to make a quick profit. For example, businesses can take advantage of the opportunity to provide additional Internet services (e.g., services discussed in the sections on current uses of the Internet and fti~ur~ ~j~) now that funding from the government is being reduced.

An example of a dty that has grown rapidly, yet still considered very livable, is Seattle. One of the reasons attributed to Seattle’s successful growth is, that despite it being a large city, there are numerous small communities within the city. These small communities retaIn such benefits as concern for others within the framework of services that a large city can provide. If businesses along with the Internet community follow this model, the Internet will have a chance to keep its successful small town atmosphere while adding increased servIces for more people.

Condusion

The Internet is a dynamic environment. While there are many risks involved with change, there can be many benefits. This paper has given some ideas on possIble benefits and possible risks. Now it is up to each business to decide if the potential benefits outweigh the potential risks. Hopefully, we’ll see you on the Web!

Group 33’s Home Pages:

To show another way of communication on the Web, we created our own home pages to market ourselves and display our expertise in Web technology.