There are a number of enabling factors for this new wave of interest in e-business:
Search Engines: Five years ago, despite the presence of many search engines, it was hard to find things online. And then along came Google. Search was now again fun, with relevant sites showing up in the first page of the results. Over the past few years, search technology has improved by leaps and bounds. The other thing that search engines like Google and Overture (now owned by Yahoo) did was that they gave advertisers a way to link their ads to the searches being done by people. This has given small businesses with limited budgets a great way to reach out to potential consumers, and pay only for performance (on the ad clickthroughs). What the likes of Google did have done is balance the needs of the various entities, according to David Evans and Peter Passell: Google’s most impressive achievement, we would argue, was to use its technology edge to create a balanced, “multisided” market — that is, to satisfy very different classes of customers whose demand is nonetheless interdependent Good technology was certainly a prerequisite to [Googles] success. And in light of Web surfers’ notorious reluctance to pay for anything, it’s no shock that the search engine users’ side of Google get the service at no charge. The company’s singular achievement was linking search results to advertising in a way that was both productive to advertisers and inoffensive to users of the search engine.
Backend Digitisation: Companies have also now managed to digitise significant portions of their value chain, making the entire process much more efficient. This makes it possible to have near real-time information on inventory across the extended enterprise, allow customers to query status of their orders online, and use customer-relationship management software to build deeper relationships. What has made this digitization process is the commoditisation of IT, making it affordable and standardized to even the smaller businesses, who have been the weak links in the information value chain.
Small Business Push: Under pressure from the online giants, small businesses have been fighting back, realizing that unless they use the Internet, their customers will simply go elsewhere. Yahoo Stores, Googles AdWords and eBay have given them the ammunition to fight back with a deeper online presence. Esther Dyson wrote recently in a Release 1.0 on small businesses (April 28, 2004) on why this is happening now: Broadband is becoming prevalent, especially in businesses, and their customers are online. Its possible to outsource almost any noncore function, and small companies can get purchasing economies of scale, not by joining some specialized exchange, but simply by searching online. What the Internet is helping small businesses do is to find growth and increase revenues.
Local Search: The other big change thats happening is how consumers seek out local businesses. So far, it has been primarily via yellow pages. This is changing as local search offerings are enriched. It is now possible to search for businesses in a targeted geographical area, see the locations of businesses on maps, and get to their websites. In turn, businesses can finely target their ads. In the coming months, as the publish-subscribe web takes shape, it will be possible for consumers to also receive notifications on specific events in their neighbourhood.
Taken together, these developments are helping re-shape the world of e-business to a more personalized and deeper experience for buyers, and a more cost-effective solution for sellers.
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