Exercise 1: Analysis of the online communities' paradigm

Questions:

1. Visit http://yahoo.com and http://facebook.com as examples of online communities.

a. What is meant by an online community and how is it important for e-commerce?

b. Is there a common thread and a local community sense in action?

2. Visit the famous online store front at http://www.amazon.com

a. Why has it been a successful site? How does the purchase of a book work?

b. Are there any secure transactions not involving money?

3. What happens with new models emerging such as price comparison sites?

Answers:

1.

A community is a group of people with common interest who interact with one another. An online community (virtual community) basically has the same definition as the traditional counterpart; one major difference is that in an online community, users interacts using computer networks or the internet. These virtual communities can be described as a virtual analogy of how our physical communities are in which people don't see face to face; instead they'd meet face-to-interface as i would put it.

According to Turban, we could categorize the elements of interaction found in a Virtual Community as:

Nowadays, there are thousands of these communities exists on the internet and they are growing rapidly.

According to its community type, online communities can be categorized as:

• Transactional & business based
• Purpose or Interest based
• Relations or practices based
• Fantasy oriented
• Social Networks
• Virtual Worlds

Online communities are very important for e-commerce because online communities are the platform in which e-Commerce activities are carried out. Example: eBay - is an online community and it is also an e-commerce entity and facilitator.

As I have mentioned above on the description of communities, there definitely are common threads and a sense of community in online communities as it is in traditional communities. Virtual communities are parallel to the physical communities. Facebook approach to this is by creating facebook groups which are non-geographically restricted in which users can form or join groups to interact and collaborate with other users who share the same interest.

2.

Amazon .com ‘s success has many factors that contributes to it. Besides having a very user friendly user interface for such a complex website, users are offered with a wide range of products new and used from different sources/sellers. Browsing through products offered in amazon.com is very convenient. Users are provided with a lot of information about the product. Besides photos, products also have reviews and comments from previous users who bought the item which provides an insight to the potential buyers. Users are also facilitated with a wide array of buying and selling tools to further enhance the trading experience at amazon.com.

Transactions are handled securely by amazon’s secure server connection. This ensures the users that transactions done in amazon are secure and details are kept private.

In purchasing a product from amazon, a user must first be a registered member. After filling the required details ( Name, shipping address, methods of payment), user could then search for the product they desire, add it to the shopping cart and choose whether to continue shopping or directly go to payment and shipping processing. Amazon supports various shipping/delivery options as well as payment options. As for now, Amazon accepts all major credit cards for secure payments through their website. After making the payment, receipt will be displayed on the screen and emailed to the buyer while the product bought is dispatched for delivery.

There are secure transactions which does not involve money. An example of this in amazon.com is on the secure login feature which are in place as a safeguard to user's account information.

3.

New models such as the price comparison sites e.g. shopbot.com.au will provide users with more information about a product with emphasize on price. These sites will surely change the way we shop online in the near future as well as sales strategies in promoting products online. For the time being however, these sites still does not offer users the same sense of security that amazon has. Mostly this is caused by the questionable reliability of the sellers as well as the lack of feedback from other users as a result of site-linking in many of these price comparison sites. Site linking means that transactions are done externally on the sellers website.

References:

Turban, Leidner, McLean, Wetherbe: Information Technology for Management 7th edition