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 eCommerce 
 

Electronic Information Commerce

Open Market, Inc
 Provo 
 Utah 
 Young, Russ  
 		Russ  Young
Director of Information Commerce Development,  Open Market, Inc 
 5072 North 300 West
Provo  (Utah)  84604 
Email: ryoung@openmarket.com

Biographical notice

Russ Young has been developing Folio products for over 6 years. Russ' background is in information production systems, having led the development of the Folio Builder product. He is currently directing the development of internet and intranet information commerce systems.

As the XML evangelist at Open Market, he is an active participant in the XML community, and participates on the OASIS and GCA technical committees. His professional interests include information publishing, document conversion, and commercial publishing systems.

Russ graduated magna cum laude from BYU in 1992 with a BS in Computer Science, and minors in Math and Spanish. He graduated from BYU in 1998 with his MS in CS, with an emphasis in computer graphics. His master's thesis, titled 'XML-Based Document Image Analysis', combines the pattern recognition concepts of document image analysis and the media-independent publishing concepts of XML.

Russ and his wife Chris have 3 children, Chantel, Sawyer and Ashton. His other hobbies include golf, volleyball, landscaping, gardening, stone masonry, and playing the piano.

 

Introduction

 

Electronic Commerce

 Simply defined, electronic commerce means buying and selling products and services over the Internet, and handling the purchase transactions and funds transfers that are needed to support those activities. This table shows some revenue projections for the size of the electronic commerce industry in the next few years.
 
 
 
Industry Segment
1996
2000



 
Infrastructure

 
$9.5


 
$196




 
Access

 
$4


 
$30




 
Content

 
$0.2


 
$33



 
Financial

 
$0.2


 
$37



 
Business-to-business

 
$0.6


 
$23



 
Retail

 
$0.5


 
$7




 These numbers are in billions of dollars


 Source: Forrester Research, Inc



    
 
Information Commerce


 Information commerce is the buying and selling of information products.  The purchase of a book, whether online or at your neighborhood bookstore, is a form of information commerce.  The principal players in the traditional commerce triangle apply to information commerce:


 
  • the producer of the information
    • 

     
  • the consumer of the information
    • 

     
  • the financial institution that coordinates the payment transaction.
    • 


     Two typical examples of information commerce:
    

     
  • Consumer Model: You browse the books in the bookstore and decide to buy a particular book.  You pay the cashier the required amount in cash or credit.  The bookstore pays the publisher the required royalty.
    • 

     
  • Professional Model: An accounting firm needs access to a particular set of published material to get the job done.  A request is made to your administrator to get the information, and the firm contracts with the publisher for the desired reference books available.  In most cases, a group rather than just an individual can use this information.  The individual that requested the information does not directly pay for the information, but that expense is a cost of running the business.
    • 


     The media that are involved in the traditional information commerce processes include magazines, forms, catalogs, letters, phone, fax and mail. The involvement of and requirement for multiple media increase the cost and overhead of making a sale happen. The excitement with electronic commerce is that everything that supports the transactions can occur on a single medium - the Internet. These include web pages, e-mail, online catalogs, online databases, transaction systems and payment systems.
    

    
     
    Electronic Information Commerce
    

     Electronic Information Commerce is the intersection of electronic commerce and information commerce, where the information gathering, order capture, financial transactions, information fulfillment, and information consumption occurs online.
    


    
     
    Information Marketplace
    

     The marketplace for electronic information commerce is growing at a rapid pace.  Much of this market is predictable, since it is a replacement of already existing businesses.  Some of this market is relatively new, owing to the newness of the medium and the new opportunities that Internet commerce creates.  It is helpful to think of three types of markets for information:
    

     
  • Consumer
    • 

     
  • Professional
    • 

     
  • Corporate
    • 

    
     
    The Consumer Market
    

     This market is characterized by an individual’s need to access information.  Examples of this kind of information are newspapers, magazines, stock reports, journals, travel info, real estate, etc.  The previous example of buying a book at a bookstore is a good place to start.  With the Internet, that same person can often find the information that he is looking for - often at no cost to him - usually faster than a trip to the bookstore.  This search involves going to the portal of choice, entering a query, and wading through the hit list until the answer is found.  In many cases, the query will need to be modified and several search engines will need to be checked.  Just because an answer was found, however, doesn’t mean that the answer was right.  An important characteristic of this model is that the content becomes part of an overriding community of interest that involves more than just information publishing.  Chat rooms, personal home pages, bulletin boards, specialized product stores, and newsgroups are other important technologies for creating a community of interest.
    

     
     
    Advertising Model
    

     In this example, the information transaction occurred without a financial transaction between the end user and the information publisher.  The presence of the published information is supported financially by advertisements that run alongside the content.  The loyalties that end users or members have to a particular online community determine the amount of advertising revenue that can be generated.  As the number of visitors to a site increases, the cost and amount of advertising increases, which allows the amount of content that can be published to increase as well.
    

    

     
     
    Subscription Model
    

     The other business model that is being used in the consumer market is subscriptions. In most cases, the publishers for these sites will provide free information to attract the casual user and host premiere information that is available to subscribed members only.  Some examples of subscription sites are the Wall Street Journal Interactive Edition and ESPN Sportszone.  Most subscription sites support free trial periods for members in order to encourage enrollment.
    

    

     
     
    Content Syndication
    

     An interesting opportunity for publishers is content syndication.  Publishers can sell the rights to their published information to be hosted in and online community.  These can be either a reference to the publisher’s site or a copy of the published content that is customized for the members of the specific online communities.  In the case where the exposure to an already-established membership is substantial, a publisher will pay for the service of hosting the content.
    

    

    
     
    The Professional Market
    

     This market is characterized by the need of a group of professionals to access a particular set of information in order to do their job. Law reviews, tax codes, financial data, scientific and academic journals are some examples of professionally oriented publications.  Information commerce in the professional market differs from that in the consumer market in several ways:
    

     
  • the information is subscription oriented
    • 

     
  • the information is authoritative
    • 

     
  • the information can not be found anywhere else
    • 

     
  • the information is identified by a brand name
    • 

     
  • the information is targeted to specific vertical markets
    • 

     
  • the information is paid for by businesses rather than individuals
    • 

     
  • the information can be licensed for corporate intranet hosting
    • 

    
     
     
    Internet hosting
    

     The publisher can host the content on one or more Internet sites and can provide content subscriptions.  Since the data is targeted for a professional market, the subscription system should support groups of users as well as individuals.  Such a system authenticates a user before granting access.  The subscription system recognizes that this user belongs to this group or corporate entity and grants access rights based on the company license.  Along with periodic invoices, a corporation will receive usage reports that detail how the group subscription was used.
    

    

     
     
    Intranet hosting
    

     A natural extension of the Internet hosting model is to license the content for hosting on a corporate Intranet.  A corporation has faster access to the content due to the increased bandwidth and avoids internet security concerns by hosting the content inside the corporate firewall.  The content can also be merged into collections of similar content, whether the content is licensed from another publisher or internally created.  This gives corporate knowledge officers the power to create information collections of all the relevant published material that is available, so that these collections can be searched together.
    

     The subscriptions to this content should allow for time limits as well as concurrent user limits.  The cost of the subscription can either be negotiated offline, specifying who has access to what content, or the cost can be fixed and purchased online, directly from the publisher website.  Trial periods allow the publisher and the corporate users to determine what information is needed and by whom.  Since the licenses to the information will expire over time, the systems should support a way to update both the licenses and content automatically over the Internet, appropriately debiting the corporate account.
    

    

    
     
    The Corporate Market
    

     Corporations have traditionally done publishing as a way to support its primary business.  The Internet, intranets and extranets have changed the way that corporations view electronic publishing.  In fact, some of these publishing operations have turned a traditional cost center into a revenue-generating machine.  In fact, it the availability of good information about a product that leads to higher sales of the product.
    

     Although the information may not be the product for sale, the information reduces the overall cost of the sale.
    


    
     
    Information Commerce Technology
    
    
     
    Electronic Publishing
    

     Electronic publishing tools are used to find, filter, deliver, retrieve, secure and sell information.  Compare how the Internet and CD-ROM allow for different ways of distributing information.
    
    
     
     
     
    		
CD-ROM
Internet

    

     
    		Central Purpose

     
    Distribution
    

     
    Communication
    

    

     
    		Intent

     
    Static reference
    

     
    Interaction
    

    

     
    		Timeliness

     
    Monthly, Quarterly
    

     
    Immediate
    


     
    		Commerce Model

     
    Subscriptions
    

     
    Transactions
    


     
    		Value-added

     
    More content
    

     
    More interaction
    




    
     
    Publisher Opportunities
    

     The biggest opportunity for publishers is that they can provide their users access to up-to-date information.  They can also open up new distribution and communication channels, which lead to the generation of additional revenue. A publisher can provide a unified storefront to all of their products whether those products are hardgoods or softgoods. For example, they can sell the books and journals, CD-ROM products, as well as offer the content of those products online. This way the customer services can be integrated for all of the products that are sold. The publishers should take advantage of the new communication channels that are part of the online community. Customers that feel involved in the community will give valuable feedback to the publisher.
    

     Depending on their size and resources, publishers can participate in an online community that someone else is hosting or create their own. A commerce service provider (CSP) can host published content and provide the infrastructure of services that are required for electronic commerce, including the payment and transaction services.
    

     By storing the membership databases online, the publisher can customize the content for individual users.  Hierarchical membership systems can provide for corporations, departments, and individual users to access the content with varying degrees of access. As the user interacts with the system, the system learns about the user and can customize the content and delivery for each user. This can also involve e-mail systems that send an a-mail with an embedded digital offer for a product, like having a "Buy Me!" button. The system provides an online transaction service that handles the different types of purchases that a consumer wants to make, including both hardgoods and softgoods. It also handles various payment types, like credit cards, digital cash, digital coupons, and offer digital receipts.
    

    
     
    Publisher Challenges
    

     For every opportunity that is presented to the publisher, several questions arise. The biggest challenge that a publisher faces with information commerce is security:
    

     
  • How do I protect my digital assets?
    • 

     
  • How can I control who has what access to what information?
    • 

     
  • How do I authenticate user access?
    • 

     
  • How do I limit copyright infringement?
    • 

    
     Questions about the financial models:
    
    
     
  • How do I make money when everything on the Internet is free?
    • 

     
  • What information should be given away and what should be sold?
    • 

     
  • Can I support trial periods with free access?
    • 

     
  • How do I avoid cannibalizing other distribution channels?
    • 

    
     Questions about transaction services:
    
    
     
  • Can I sell content on a subscription basis?
    • 

     
  • Can I sell content with a shopping cart model?
    • 

     
  • Can I support credit and debit payment models?
    • 

     
  • Which payment mechanism should I use?
    • 

     
  • Will it work for a global market?
    • 

     
  • Will it scale to fit my needs?
    • 

    
     Questions about data conversion and presentation:
    
    
     
  • Which input and output file formats do I support?
    • 

     
  • How should I store my information?
    • 

    
     Questions about what technologies to use:
    
    
     
  • Which platforms do I need to support?
    • 

     
  • How do integrate with my legacy systems?
    • 

     
  • Which standard should I use?
    • 

     
  • How do I internationalize?
    • 

    
     Questions about customer service:
    
    
     
  • How do I interact with the consumer at a higher level than just sending a text file?
    • 


    
     
    End-user Opportunities
    

     The biggest advantage for users of information commerce systems is having access to up-to-date information. There is a lower barrier to entry for individual users as they can just buy what they need rather than buy an entire volume. Larger collections of information can be searched, the content can be personalized, and the results can be downloaded quickly.
    

    
     
    End-user Challenges
    

     The new technology also forces users to ask new questions.
    

     Questions about access:
    
    
     
  • Where do I go to find the information?
    • 

     
  • How do I find what I really want?
    • 

     
  • Can I search the information before I buy it?
    • 

     
  • How can I pay for only the documents or microdocuments that I want?
    • 

    
     Questions about security:
    
    
     
  • Do I trust sending my credit card # over the Internet?
    • 

     
  • Do I trust that the content vendor will deliver what I want?
    • 

    
     Psychological questions:
    
    
     
  • While you can see and touch a CD-ROM, what do you get from the Internet?
    • 



    
     
    Working EIC Examples
    

     
    Financial publishing
    
    
     
  • Wall Street Journal Interactive Edition (http://www.wsj.com)
    • 

     
  • Bankers FYI (http://www.bankersfyi.com)
    • 

     
  • Thomson Financial Publishing (http://fio.bankinfo.com)
    • 


    
     
    Legal publishing
    
    
     
  • Matthew Bender (http://www.matthewbender.com)
    • 

     
  • Butterworths Australia (http://www.butterworths.com.au)
    • 


    
     
    Religious publishing
    
    
     
  • Bookcraft (http://www.ldsworld.com)
    • 



    
     
    XML in EIC
    

     A classic publishing error is that a new publishing medium arises which requires a new data format, and the entire production process is changed as a result. For example, many HTML documents are created for web publishing, but the inherent structure of the documents is lost as a result. XML is well known for its properties of simplicity and reusability. Author the document once and use it for every available distribution medium. The online value proposition of XML is that it increases the value of the information being delivered. First of all, the high structure of the information makes intelligent searching possible. Instead of simple Boolean searching common to the Internet, contextual searching is possible.  Since the formatting of the document is not tied to the document, the information delivery can be customized for every user. The structure of the document also allows for hierarchical purchasing models, which base the price of the content on the types of elements that are being accessed.
    

     XML is flexible in that it can be both a model for the information that is being stored and delivered as well as the protocol for machine to machine communication of the back end transaction systems. The tools for XML provide for simpler content authoring, management, conversion and delivery; in essence, it lowers the barrier to entry into electronic information commerce.
    

    
     
    Conclusion
    

     Although Electronic Information Commerce is in its infancy, the Internet provides publishers new opportunities and challenges for generating revenue and empowering users to access real-time information.
    



    

    
  
    

    
  An Introduction to VML.
 
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Graphics-based Product Documentation: Principles and an Application