E-Commerce Security
COEN 351
Thomas Schwarz, S.J.
Amazon.com
1994: Bezos founds amazon.com
1995: Amazon opens for business; competes on prize,
selection, convenience, service. Business model
promises low overhead.
1999: Bezos is man of the year for Time magazine.
2000: 2.7 B$ revenue, 1.4 B$ loss starts search for
profitability.
2002: First ever profits. 4B$ revenue
2005: First quarter net revenue 1.9B$, net income
78M$
E-Commerce
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E-commerce
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Use of the internet to transact business.
E-commerce I
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1995 – 2000: explosive growth,
extraordinary innovation
March 2000: dot.bust
2001 – today: solid growth, less hype
E-Commerce I
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Disintermediation
Friction-free commerce
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Information equally distributed
Transaction costs are low
Prices are dynamically adjusted
Goal of “First Mover”
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Successful first mover becomes new intermediary
$120 B$ capitalization for 12,450 dot start-ups
10% survival rate, very few profitable
E-Commerce II
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Earning and profits emphasis
Traditional Financing
Stronger regulation and governance
Strengthening intermediaries
Imperfect markets
Mixed “click and brick” strategies
E-Commerce Business Model
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Value proposition (Why buy from you?)
Revenue model (How will you make money?)
Market opportunity
Competitive environment
Market strategy
Organizational development
Management team
E-Commerce Business Model
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Revenue Model
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Advertising revenue model
Subscription revenue model
Transaction fee revenue model
Sales revenue model
Affiliate revenue model
E-Commerce Business Model
B2C
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Portals
E-tailers
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Content provider
Transaction broker
Market creator
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Competitive market because barrier to entry is low
Brings buyers and sellers together
Service Provider
Community Provider
E-Commerce Business Model
B2B
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E-Distributor (Sales of goods)
E-Procurement (Fees, supply chain
management, fulfillment services)
Exchanges (Fees, commissions on
transactions)
Industry Consortia
Emerging E-Commerce
Business Models
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C2C: eBay
P2P: Kazaa
M-commerce (mobile commerce), uses
wireless
E-commerce enablers
Internet Fraud Complaints
2003
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Auction fraud 46.1%
Non-delivery 31.3%
Credit / Debit card fraud 11.6%
Investment fraud 1.5%
Business fraud 1.3%
Confidence fraud 1.1%
Identity theft 1.0%
Check fraud 0.5%
Nigerian letter fraud 0.4%
Communications fraud 0.1%
Fraud Complaints
Internet Crime Center
Fraud Complaints
Internet Crime Center
Fraud Complaints
Internet Crime Center
Internet Fraud Statistics
First Half 2005
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Instance
Auctions
General Merch.
Nigerian Scam
Fake Checks
Phishing
Lotteries
Info / Adult services
Work-at-Home Plans
Computer Equip. / Software
% compl.
44%
30%
7%
5%
4%
3%
2%
1%
1%
Average Loss
$999
$4,389
$11,370
$4,733
$298
$3,953
$277
$726
$608
Source: National Internet Fraud Watch Information Center
Data is on complaints by consumers.
E-Commerce Security
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Integrity
Non-repudiation
Authenticity
Confidentiality
Privacy
Availability
E-Commerce Security
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Threats:
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Malicious Code
Hacking, Cybervandalism
Credit Card Fraud
Spoofing
DoS, DDoS
Sniffing
Insider Jobs