Chapter 11

  Why did most communities in the early days of e-commerce fail? What factors enable some online social networks to prosper today?
      Most communities in the early days of e-commerce failed because the early online communities involved a relatively small number of Web aficionados, and users with intense interests in technology, politics, literature, and ideas.  The factors that enable some online social networks to prosper today are a group of people, shared social interaction, common ties among members, and people who share an area for some period of time.

2.      How does a social network differ from a portal? How are the two similar?
      A social network differs from a portal because a portal is a group of web pages that act as a starting point for using the Web or Web based services.  A social network consists of interaction between a group of people.

3.      What is personalization, or personal value pricing, and how can it be used at the beginning of a product’s life cycle to increase revenues?
     Personalization pricing adjusts prices based on the merchant's estimate of how much the customer truly values the product.  It can be used at the beginning of a product's life cycle to increase revenues because if a lot of people are buying the product, then they can up the price; however, if it is not selling very well, they will put it on sale.

4.      List and briefly explain three of the benefits of auction markets.
      The three benefits of auction markets are consumer-to-consumer auctions, in which the auction house is simply an intermediary market maker, providing a forum where consumers can discover prices and trade.  Business-to-consumer auctions where a business owns or controls assets and uses dynamic pricing to establish the price.  Business-to-business auctions is the third type.  Three benefits of auctions Liquidity, price discovery, and market efficiency.

5.      What are the four major costs to consumers of participating in an auction?
      The four major costs to consumers of participating in an auction are delayed consumption costs, monitoring costs, equipment costs, trust risks, and fulfillment costs.

6.      What is an auction aggregator and how does it work?
      An auction aggregator is when you use computer programs to search thousands of Web auction sites, and aggregate information on products, bids, auction duration, and big increments.

7.      What three characteristics define a portal site today?
      Three characteristics that define a portal site today are web sites that contain in-depth information and they seek to be a sticky destination.

8.      List and briefly explain the main revenue sources for the portal business model.
     The main revenue sources for the portal business model are Reach, the percentage of the Web audience that visits the site in a month and unique visitors the number of uniquely identified individuals who visit in a month.