e-Brief for the Export Strategy-Maker

Export Development in the Digital Economy

Keeping up with the jargon
An e-commerce glossary for the export strategy-maker

The following words and phrases are routinely encountered in discussions concerning the Internet and Electronic Commerce. The list serves as a reasonable initial reference, but is not meant to be exhaustive.

Angel capital - the initial money raised to fund a startup Internet company. Financial capital typically progresses in three stages: 1) Angel capital ; 2) Venture Capital; 3) an Initial Public Offering. Angel capital is often also known as "friends and family" capital, coming from sources close to the founding members of the company.

bandwidth - has a technical definition involving the range of frequencies used in a telephonic transmission, but is now routinely used to refer to the communication capacity of a computer's connection to a network. A common analogy is that of a pipe, such as a water pipe, where larger pipes can handle greater flows. More bandwidth is always better, and applications tend to grow to fill available bandwidth.

banner ads - the predominant method for advertising on web sites. The average size of the front page of a web site is from one to two times the size of the screen viewing area. A banner ad is typically a small rectangular graphic image (perhaps 5% to 10% the size of the viewing area) often consisting of a sequence of several such images to suggest animation, which promote a product or another web site. Advertising is identified as one of the primary sources of revenue for a web site, thus, banner ads are placed in high-profile locations, along the top or side edge of the screen. In extreme cases the accumulated presence of banner ads take up well over half of the available space on the front page, and can represent in excess of 80% of the loading "footprint" of the site, far outweighing the site's actual content in terms of space and visual distraction.

brick-and-mortar - a term used (sometimes disparagingly) for traditional retail outlets, referring to their fixed-location stores with large sales forces and customer traffic based upon physical proximity to the store.

burn - the rate at which an e-commerce start-up company spends the millions of dollars raised through venture capital or via partnerships and licensing deals. It indicates that the enterprise is spending substantially more than it takes in, and implies that the underlying business model may be faulty. The burn rate has recently become one of the most significant measures in the assessment of an e-commerce company.

B2B - Business to Business (B2B) electronic is expected to account for over 80% of total dollar value of all electronic commerce activity as traditional mechanisms for the development and distribution of products and services move online. In the case of manufacturing of goods, key processes in product design, procurement of raw materials, manufacturing, marketing, sales, and distribution will 'go digital' and utilize Intranet and Internet resources to lower costs, increase efficiency in the product development life cycle, and improve communication and collaboration amongst the participants in the supply chain. The goods are increasingly bought and sold through market-specific on-line B2B marketplaces that focus on other businesses as clients, rather than consumers.

B2C - Business to Consumer electronic commerce enterprises accounted for the majority of early e-commerce startup companies. Existing retail operations, either stores or catalogues, which sell to the general public are creating on-line presences for their operations. New companies have been provided with an historic opportunity to launch quickly, with little overhead and ready access to financial capital. The competition for customers has been fierce as new operations often price their goods at near or below cost, in an unsustainable economic strategy, which in turn decimates the business of operations with more realistic pricing structures.

click-and-mortar - another reference for a multi-channel retailer, a "brick-and-mortar" store with an on-line catalogue store.

click-through - occurs when a viewer is shown a "banner ad" and chooses to click the ad and visit the site promoted in the advertisement. The rate of click-throughs as a percentage of total exposures is an important statistic in the marketing of advertising space on web sites. A click-through rate of 1%-2% of exposures would be considered high. Click-through rates increase substantially when the selection of ads to present to the viewer is based on the viewer's history of on-line activity, such as other sites visited and items purchased. Known as web "personalization", it is a controversial method to increase the effectiveness of on-line advertising.

CERT - the Computer Emergency Response Team was formed in 1988 at Carnegie Mellon University, following a prominent attack on Internet-connected computers, to address issues of network security. It undertakes research on network security, maintains archives of related materials, and provides a 24 hour rapid response team to security incidents.

cyber-squatting - a phenomenon whereby an individual registers a domain name which is associated with a well-known brand name, usually hoping that the organization which owns the brand name will buy the domain name back, at a substantial profit to the cyber-squatter.

data mapping - the process by which data is converted from one standard of formatting to another, whereby the data elements and delimiters of, for example, the EDI (Electronic Data Format) in use for many years are converted into the format required of some other database or web-based system.

data mining - software which sifts through the information stored in a database or data warehouse and seeks to discover previously unknown relationships or patterns in the data.

data warehousing - any business accumulates substantial volumes of information about its suppliers, its customers, and its own operations. An e-commerce company generates substantially more data, on topics ranging from the effectiveness of marketing programmes to the browsing and shopping habits of its customers. The data warehouse represents the aggregation of this data and the tools used to analyze the data for purposes such as anticipatory inventory control, target marketing, and web personalization.

digital signature - is used to provide an electronic means to associate a person with a document, thus providing the digital equivalent of a notarized signature on a physical document. A digital signature is formed from a combination of encryption, message digest algorithms and certificate authorities to provide a mathematically rigorous means to verify the authenticity of a digital document. The United States government has recently accepted in principle the equivalence of digital signatures and traditional signatures for a wide range of business transactions, with the expectation of saving billions of dollars in transaction costs.

DNS - the Domain Name System provides the mapping of Internet host names to explicit numeric Internet addresses. Names are grouped into domains such as .com for commercial applications, .org for organizations (usually non-profit), .edu for educational institutions, .gov for U.S. governmental sites, and country designations such as .ru for Russia, and .uz for Uzbekistan.

download - the transfer of data from a web server, through the Internet, to a user's machine. When a user clicks on a "link" on a web page, it initiates a request to the server for more data, which is then downloaded to the user's machine.

e-business - a business which utilizes Internet and Intranet technologies to transform most or all of its internal operations, such as human resources management, procurement, and finance, to streamline operations, reduce costs, and (typically) enhance its capacity to participate in electronic commerce. It is possible, though unlikely, that a business might operate as an e-business but not actually participate in electronic commerce.

e-tailer - a retailer who operates on-line, either as an Internet "pure-play" or as the web site for a multi-channel retailer.

footprint - a term sometimes used to describe the relative size of a web page, measured in thousands of bytes, which in turn translates into the amount of time it takes a page to load from a server to an individual's machine. The load time is dependent upon the connection speed of the individual's machine. The inclusion of images of high-resolution, or of audio or video material, substantially increases the time it takes to "download" the material and present the web site to the user. Where bandwidth to the user is limited, great care is taken to minimize the footprint of the web site.

hits - used as a rough indication of web site popularity, it purports to count the number of visits to the site. There is substantial variation in the means by which these measures are taken, and often are seen as grossly inflated unless carefully defined and independently monitored.

HTML - the "HyperText Markup Language" controls the layout of web pages on the screen. The HTML language consists of special tags which identify format details such as the size of the text, the source location and page placement of graphic images, tables of information, and links to other web pages.

HTTP - "HyperText Transport Protocol", the means by which requests for web pages are identified, by document type and transfer mechanism, such that a single web browser can serve as the interface to a wide range of file types.

internauts - a term used to describe people who regularly browse web pages on the Internet; a combination of the space exploring "astronaut" with the wide-open spaces of the Internet.

knowledge base - a compendium of data and rules pertaining to its relevance; consisting of reference documents, protocols, procedures, and databases along with dynamic feedback loops (which retain the integrity and accuracy of the data) and rules that establish relations amongst data elements and determine the relevance of data based upon situational circumstances.

mCommerce - a variation of e-commerce using wireless communications devices such as a cellular phone or personal digital assistant (PDA) to purchase goods and services. In the case of a cell phone, payment is rendered through the cell phone bill, thus offering a convenient means for participation in e-commerce in countries with limited wired Internet access and little or no history of personal payment systems such as credit cards and checking accounts.

multi-channel retailer - typically describes a traditional "brick-and-mortar" retail operation or catalogue store which also operates an e-commerce site. For example, Nordstrom operates high-profile retail outlets, along with a substantial catalogue enterprise, and now an e-commerce site as well, and is described as a multi-channel retailer. A multi-channel operation is seen by some analysts as desirable, as any one channel can leverage the strengths of the others.

outsourcing - the practice of sub-contracting key organizational processes, such as the design of a web site or the provision of customer service, to an outside vendor who specializes in such services.

personalization - the emerging phenomenon whereby the "surfing" habits of individuals on the Internet are retained and used to guide the presentation of material in future visits. For example, if an individual visits sites about pregnancy and childbirth, subsequent banner ads might feature diapers and baby cribs, while articles in on-line news sites might feature more prominently stories about children's health and child-rearing. Advertisers see this as a nearly perfect form of demographic profiling, targeting the "right' audience while not wasting time or money on inappropriate consumers, while others are concerned about the unregulated commercial exploitation of personalization and the impact on individual privacy.

portal - a web site which serves as a starting point for web browsing, it can be a generalized site such as Yahoo and Netscape or more thematically oriented, such as a B2B portal for textiles. A portal site typically includes a compendium of topical information, a search service, and links that channel visitors to partnered sites. Many portals attempt to build a sense of "community" amongst the participants, offering additional services such as e-mail, discussion forums, and chat rooms. Industry-specific portals have become a particularly intensive area of competition in B2B e-commerce.

pump-and-dump - a practice whereby the stock price of a publicly traded company (now often a technology company) is artificially inflated through publicity campaigns and various Internet channels such as chat rooms and 'trading tips' publications and is then sold by insiders for substantial financial gains.

pure-play - an on-line "e-tailer", a retailer which operates only via the Internet, without retail store outlets. For example, Amazon.com began as an Internet pure-play, but has announced plans to become a multi-channel retailer.

sourcing - essentially the same as outsourcing, though it implies that the practice is industry-standard along the supply chain. Sourcing occurs when the design of a product takes place in one location, and the procurement of materials and process of manufacturing of the product is undertaken elsewhere, by other companies, typically as the result of a competitive bidding process. For example, in the textiles industry the design of a garment might be done in New York, while the production of the garment would be sourced to a facility in another country, such as Bangladesh or Korea, where the costs associated with procurement of materials and manufacturing are low enough to provide competitive advantage to the producers.

screen-scraping - the process by which older pre-web software systems are fitted with more modern web-based interfaces. The screen output from older software systems is re-formatted for presentation in web environments, and, conversely, the input from web interfaces is formatted for acceptance by the older software systems.

virtual company - the initial reference is negative, suggesting a company which does not exist, but it has assumed a new meaning, describing a business whose employees work in geographically separate locations (perhaps from their homes) and conducts most of its internal operations across the Internet. It is more common in high-tech industries whose products are digital (software production, multimedia entertainment, gaming), but is gaining momentum as experience increases and interest grows in 'virtual' collaboration amongst employees crossing national boundaries.

XML - the eXtensible Markup Language is a subset of the Standard Generalized Markup Language (SGML). XML is similar to HTML, in that it supports the inclusion of tags in web pages, but where HTML addresses layout, XML addresses content, thus facilitating indexing and searching of the web pages.

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