Last updated: February, 2006

Hackers, Hits and Chats: An E-Commerce and Marketing Dictionary of Terms

This dictionary serves as support material for online learning, specifically for marketing and e-commerce classes. Each entry includes its own URL and also includes a link to its wikipedia definition for further exploration.
Feel free to e-mail any comments, questions, feedback to Alex.

To Add: database marketing; the long tail; mass customization; demand shaping
E-mail me if you want something adding.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

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(Online) Advertising: [onl] Online advertising comprises a variety of forms of advertising. The most popular has been banner advertising, although text advertising is gaining ground rapidly as a form used by the two networks: Google Adwords and Overture / Yahoo! Interstitials, Pop ups and 'buttons' round out the more common forms of internet advertising. The business model for internet advertising varies from a pure CPM model to PPC to CPA.
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Advertising Network: [adv] Advertising network refers to an infomediary, which serves between a group (network) of web sites (which want to host advertisements) and advertisers which want to run advertisements on those sites. DoubleClick is the most well known advertising network for banner advertisements. DoubleClick can serve advertisements on any of its member sites, and can mine data from users who interact with those sites in order to serve more appropriate advertisements. An advertiser can buy a run of network package, or a run of category package within the network. The advertising network serves advertisements from its ad server, which responds to a site once a page is called. A snipet of code is called from the ad server, that represents the advertising banner. Google and Yahoo!'s search engine programs also run advertisements on other sites within their respective networks.
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Adware: [adw] Adware is advertising-supported software. Essentially the business model for the software that is downloaded is the advertisements that are played as part of the download, or when the software is being used. Adware should be distinguished from spyware which is designed to observe and report data of the user.
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Affiliate Program: [aff] An affiliate program is a form of advertising, on the web, that rewards the affiliates (self-selected advertisers) for driving traffic to the advertiser (PPC) or for subsequent transactions (CPA). An affiliate program uses a multi-level marketing concept where consumers (affiliates) attract additional consumers. Some affiliate programs are multi-tiered, thus increasing the income earning opportunities for the affiliates (rewarded for their traffic and the traffic of affiliates they recruit). Marketers have the option of developing their own in-house affiliate program (Amazon.com and bn.com are examples) or joining one or more of the large affiliate networks (Beefree, Linkshare or CommissionJunction). Affiliates have the potential to earn significant money, if done correctly. This book store is the author's example of an Amazon affiliate. Marketing vehicles may sign up for an affiliate program to use their excess advertising inventory (unsold banners). Since affiliates link directly to the site which sponsors the program this increases the number of links into the site which can have a positive effect on the ranking of the sponsoring site in search engines (good for search engine optimization.) Affiliate links also have a positive branding effect for the sponsoring site.
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Aggregator: [agg] (News Reader) Aggregator is an application, either for the web, windows, mac, or linux, that aggregates dynamic content (RSS or Atom files) for the subscriber to view. The dynamic content is typically generated by blogs, news organizations or other sources interested in distributing news to subscribers, using the XML format to generate the RSS feed. It becomes an effective means for users to manage their view of updated news across the web. Users control which 'feeds' they subscribe and unsubscribe, this channel is also spam free. Aggregators are one of the web 2.0 technologies. Examples of web-based aggregators include bloglines and NewsIsFree.
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Alpha/Beta: [alp] The terms alpha and beta refer to releases of software that are typically not ready for commercial use. Alpha refers to the very early release, which is typically very buggy and only released to a few people who are internal to the organization. It is helpful, in development, to get feedback very quickly from the hacker community, or potential customers with the beta version. Releasing a beta version has become standard practice with the evolution of the internet as a mode of distribution for the software. Companies are also apt to leave releases of products in beta for a while (Google). It is a part of the development model for open source software.
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amazon.com [amazon]: Amazon.com; Wikipedia; Archive

aol.com [aol]: aol.com; Wikipedia; Archive

API: [api] API refers to Application Programming Interface. It is the interface that gives program developers access to develop programs that work on a particular platform. Thus for Microsoft's Windows platform, the API is win32. To develop a program to run on the windows platform, you must write to the win32 API, thus the win32 API is the software developer's platform for windows. By encouraging other software programmers to develop to your platform, you are able to encourage lock-in as more people become dependent on the platform. A key strategic issue for a software company is whether to develop a developer's community, which builds software to its platform, or whether to keep the development internal to the organization. Microsoft is engaging its developer community with its Channel 9 initiative.
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Architect(ure): [arc] Architecture refers to the planning phase of the software development process, much like architecture refers to the same in the process of building a house. The builders are the coders of the product, once it is architected. This is an extraordinarily important phase of the overall development of the product, and consists of thoroughly understanding and articulating the needs of the users (of the system) and the coders (for the system). This serves as a roadmap for current and future development for the product. Poor architecture may not be apparent during early releases of the product (the alpha and beta phases), but as the product evolves and newer versions are created, architectural decisions will become more impactful to development. This has been cited as a cause for the demise of the Netscape development process.
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Asynchronous/Synchronous Communication: [asy] Direct communication, where all parties involved in the communication are present at the same time (an event) is a form of synchronous communication. Examples include a telephone conversation, a company board meeting, a chat room event and instant messaging. Asynchronous communication does not require that all parties involved in the communication need to be present and available at the same time. Examples of this include e-mail (the receiver does not have to be logged on when the sender sends the e-mail message), discussion boards, which allow conversations to evolve and community to develop over a period of time, and text messaging over cell phones.
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Auction Pricing System: [auc] Using an auction pricing system, sellers are not constrained by having to fix a price without knowing what the market will bare (traditional pricing methodology). If a seller sets a price too low, using a classified advertisement for example, the demand will be high and the product will be purchased. The seller, however, will not get the most revenue the market would have paid if the buyers had had to compete for the purchase. The buyer who wanted the product most (willing to pay the highest price) would not automatically receive the product. Conversely, if the seller advertises too high a price, using a classified advertisement, the product will not sell. By allowing buyers to bid up the price from a low price point, the product will sell to the highest bidder (assuming it clears a minimum asking price). The auction pricing system is a dynamic pricing model, much like the reverse pricing model. Game Theory can impact the strategies involved in setting a starting price (for the seller) and bidding strategies for the buyers.

Examples include: Ebay and QXL.com.
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Autoresponder: [aut] Autoresponders are used to send an automatic e-mail in response to an incoming e-mail message. This allows for the sender to know the e-mail has been received, which is important due to the asynchronous nature of the medium. They are often used by company employees to alert people they are away on vacation, thus delaying a potential response. They can also be used effectively in customer service by indicating to the consumer:

• The query was received
• Other alternate means to find information
• A response timeframe
• Additional marketing material

Note: An autoresponder can also be used to distribute a digital product, as a response to an e-mail request.
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Average Costs: [ave] The average cost of a unit of product is made up of its fixed costs / # units produced, and the variable cost per unit. With digital products, where the variable costs are very small (and in some instances zero), the average cost of the product declines as more units are produced and sold. Thus the market leader for a product typically has the lowest average cost per unit. This allows the leader to have increased margins, and increased flexibility to lower price. This is one of the reasons why first-mover advantage can be so important.
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B2C: [b2c] B2C refers to business-to-consumer trade, retail trade. Similarly B2B refers to business-to-business, distribution channel (value chain). C2B refers to consumer-to-business, and uses a reverse pricing model (Priceline for example). C2C refers to consumer-to-consumer, an auction-style model (eBay for example).
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(Internet) Backbone: [bac] The internet backbone is the term used for the connections of the internet of the large ISPs (for example MCI, British Telecom and UUnet). These ISPs provide the fastest data transfer and will be the most heavily trafficed nodes of the internet. They then connect to smaller, regional ISPs and so on.
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Bandwidth: [band] Bandwidth refers to the capacity of the connection of the internet. Typically a user's connection to the ISP is the aspect of the internet experience with the least bandwidth (last mile issue.) The closer to the internet backbone, the greater the bandwidth of the connections. Bandwidth is also shared among users of an ISP, thus the activities of one user can have a nagative impact on the experience of all other users. Filesharing sites have been blocked (by firewalls) from some ISPs (universities) for their penchant for hogging bandwidth.
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(Advertising) Banners: [ban] Banners, a form of internet advertising, were the primary form of advertisements on the web (this is now challenged by text advertisements). The standard banner usually appears at the top of a web page, and will link to a target web page, that may be the homepage of the advertiser or a target page developed by the advertiser that is more directly relevant to the message of the banner (a better use). The IAB has developed banner size standards. Banners began to appear in 1994, the first from AT&T hosted by wired.com.
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Banner Exchange: [bann] A banner exchange program is a program designed to allow marketers to exchange banners (a form of bartering) to enable marketers to promote their sites without the outlay of cash. A program typically allows a marketer to display one advertisement, across the network, for every two advertisements it hosts on its site. Unlike a straight exchange with one entity, exchange programs allow for the possibility for the banner to be displayed on many web sites (those sites that participate in that particular network). The Free Banner Exchange Megalist is a good resource for identifying these exchanges.
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Barnes & Noble: [barnesnoble] Barnes & Noble.com; Wikipedia; Archive

Barrier(s) To Entry: [bar] Barrier to Entry refers to the costs incurred for a new entrant to enter a marketplace. Examples include fixed costs such as the development of a factory (for traditional manufactured goods), branding, and lock-in established by current competitors in the form of switching costs. Barriers to entry can also refer to any "hidden" cost established to reduce freedom of choice. Traditional retailing environments, that had relied on geography as a competitive advantage, now need to build barriers to entry to protect their client base from internet-based businesses.
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Barter: [bart] Bartering is the trade of goods from one enterprise to another, without the transfer of payments. Many internet businesses trade their products and services, to avoid payments and / or to stimulate demand, at the early stages of their life-cycle. This has also become common practice for the trade of banner advertisements. Banner exchange programs enable small advertisers to exchange advertising space, but large enterprises are also involved in this practice.

Bartering was the means of exchange between traders and customers in markets, before money was developed as a medium of exchange. Bartering is therefore closely associated with very early market development! In the early model, money was developed to make markets more liquid. With the early internet, bartering was used due to the lack of liquidity of many internet businesses.
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Bluetooth: [blu] Bluetooth is a technology that connects devices wirelessly, over a short range. It is useful for cell phones for example, allowing a user to wirelessly speak into his / her cellphone.
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Bookmark: [boo] Bookmark is a term used to suggest a user saves the location of a web page in order to return to that page in the future. It stems from the bookmark option in the Netscape browser. The dominant browser Internet Explorer, has the same option, called favorites. Since it is easier to ask someone to "bookmark" a page than to add a page to a "favorites" list, despite Internet Explorer becoming the standard browser, the "bookmark" term has persisted!
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(Shopping) Bots: [bot] Bots are software programs developed to help the user search the web to identify and compare products for purchase. Examples include: Froogle, MySimon, DealPilot.com, FrictionLess.com, and Epinions.com. They are also referred to as intelligent agents.
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Brand: [bra] A brand is a product from a known source (organization). The name of the organization can also serve as a brand. The brand value reflects how a product's name, or company name, is perceived by the marketplace, whether that is a target audience for a product or the marketplace in general (clearly these can have different meanings and therefore different values). It is important to understand the meaning and the value of the brand (for each target audience) in order to develop an effective marketing mix, for each target audience. The value of the brand for a web-based company may have heightened importance due to the intangible nature of the web.

The economic value of a brand can be determined by looking at what a company is able to charge for a product, over and above a generic alternative product, in its marketplace.
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Break Even Analysis: [bre] Break Even Analysis refers to the calculation to determine how much product a company must sell in order to break even on that product (revenue = costs). It is an effective analysis to measure the impact of different marketing decisions. It can focus on the product, or incremental changes to the product to determine the potential outcomes of marketing tactics. The formula for a break even analysis is:

Break even point ($) = (Total Fixed Costs + Total Variable Costs).
Total Variable Costs = Variable cost per unit x units sold
Unit contribution (contribution margin) = Price per unit - Variable cost per unit.

When looking at making a change to the marketing program, one can calculate the incremental break even volume, to determine the merits of the change. This determines the required volume needed such that there is no effect to the bottom line to the company due to the change.

If making changes to fixed costs (changing advertising expenditure etc.):
Incremental break even volume = change in expenditure / unit contribution.
Thus if a company increased its advertising expenditure by $1 million, and its unit contribution for the specific product is $20, then the company would need to sell an additional 50,000 units to break even on the decision.

If making changes to the unit contribution (change in price, or variable costs):
Incremental break even volume = (Old Unit Volume x (Old Unit Contribution - New Unit Contribution)) / New Unit Contribution
Thus if a company increased its price from $15 to $20, and had variable costs of $10, it is increasing its unit contribution from $5 to $10, assume also an old unit volume of 1 million. It could therefore reduce its volume by 500,000 to break even on the decision.

When making changes to a specific product, cannibalization of other products may occur, assuming the company offers a product line of similar products. To calculate the effect of cannibalization, the Break Even Cannibalization rate for a change in a product is:
New Product Unit Contribution / Old Product Unit Contribution.
New Product is the planned addition to a product line (or change to a product within a product line), Old Product is the product that loses sales to the new product (or the product line that loses sales). The cannibalization rate refers to the percentage of new product that would have gone to the old product, this must be lower than the break even cannibalization rate in order for the change to be profitable.
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Broadband: [bro] Broadband refers to the ability of the user to view content across the internet that includes large files, such as video, audio and 3D. Broadband refers to an increased ability to do so. The term narrowband can refer to the inability to do so. A user's broadband capability is typically governed by the last mile issue, the connection between the ISP and the user. Users increasingly have access to broadband such as cable modem and DSL access. Once broadband is no longer an issue, the web is likely to become much more useful, and users of the internet will likely change their behavior in terms of what they do with the internet, as a consequence of being able to leave the connection open all the time, rather than having to dial-in and leave.
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Bugs: [bug] A bug is the term used to describe a coding error in a computer program. Bugs can be discovered throughout the development process. As systems are tested with live users (through alpha and beta versions), and systems become more interrelated, bugs tend to surface that were not recognized during the early stages of development. Bugs are also included in commercial products that have already been shipped. Once discovered, companies will use patches to update the software for the users.
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(Product) Bundling: [bun] Product Bundling refers to the bundling together of more than one product for a sale. This is very common for digital products, where the marginal costs of each product is very low. If most of the marginal cost is associated with packaging and distribution, this is further reduced when the products are bundled together, as they share the same costs of packaging and distribution. Thus the incremental cost to the firm (i.e. Microsoft) for bundling together additional software products is very small (actually zero aside from any opportunity cost). Thus a suite of products may allow for greater market penetration into different software markets than if the software was sold separately. For software that is not currently used by the consumer, but is purchased through a bundled package, it works to lock-in the consumer once he/she decides to use that category of software. Thus bundled software can ensure strong market positions across multiple markets.

While product bundling is a regular phenomena for software and related products, product unbundling may occur in the traditional content provider markets as microtransactions can provide payment options for smaller increments of the product. Thus rather than having to buy an entire CD (a bundling of different song titles, mostly of little relevance to each other) the consumer is able to pay for a single song title, unbundled (from iTunes for example). News media is also becoming unbundled, via the web and RSS feeds, and via services like Google News.
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Burn-Rate: [bur] Burn-rate refers to the amount of money a company spends from month to month (money burnt) in order to survive. Thus a burn-rate of $50,000 would mean the company spends $50,000 a month above any incoming cash flow to sustain its business. Entrepreneurial companies will calculate their burn-rate in order to understand how much time they have before they need to raise more money, or show a positive cash flow.
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Business Plan: [busp] A business plan is a document that articulates a new business idea (and its business model). It is used to gain interest in the business idea for potential investors (Venture Capital investors for example), as well as used as a guide for the team to build out the business. Particular focuses of the plan include the idea itself, the management team, the marketing mix, and the cash flow projections.
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Business Model: [busm] Business Model is the business' value proposition, and how it determines to satisfy that value proposition. Essentially it refers to the entire process of how it intends to do business with its customers profitably.

Web sites need to have a specific business model. Many company web sites are operated on a ROI model, presuming the web site serves multiple marketing functions. Alternatively search engines operate with an advertising revenue business model (PPC). In fact Google's entire business model relies on its Google Adwords program. News sites may combine advertising revenue with site subscriptions for a business model. The subscriptions may or may not be paid subscriptions, and the data acquired may or may not be resold to third parties to generate additional revenue streams.

Software vendors need to determine whether their business model should focus on the sale of the software, or its after sales support. If the former, this can present potential cash flow problems in the long run as the software requires additional support.
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Call to Action: [cal] Call to Action is the action that is requested by a marketer's content (either from an internet advertising or web-site copy for example). This may be to click-through to enter a contest, enter a survey to win a free prize, or purchase a product.
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Caching: [cas] Caching is the process used to save web content that is served, for viewing at a later time (cached on the client machine) or for others to view (popular pages, cached at the ISP for others to view who use that ISP to connect to the internet.) Google also caches content that is available for browsers' to view with the search results.

The principle reason for caching is to improve the web browsing experience by increasing the speed web pages can be presented to the client. Caching does not work well if web pages are updated often, as older copies are cached which are then served to browsers. Caching is also an issue for content providers who wish to remove their content from the internet. They do not control the caching process and thus are unaware of the extent to wich the content has been cached across the internet.
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Cannibalization: [can] Cannibalization refers to the notion of a company making a business decision that will have a negative impact on either a current product within the same product line or member of a distribution channel (or entire channel, via disintermediation). This type of decision is typically designed to allow the company to survive in the long-term, and avoid having its products challenged by competitors' products as technology progresses.
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Captive Market: [capt] A captive market is a group of consumers who have limited choice in terms of the products they can select/purchase (no choice)! This type of market was common during the production era when there was a limited supply of goods (and greater demand). It occurs when the market is monopolistic, thus there is only one supplier in the marketplace. This is more likely to occur with digital products (Microsoft is a good example of this). It can occur when a marketer has achieved significant lock-in for its installed-based. Thus the switching costs for the consumer to try a competing product become prohibitive.
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Cash Flow: [cas] Cash flow is the collective outcome of all incoming and outgoing cash over a fixed period of time. Having a positive cash flow is critical to the long term survival of the company, in the short term a company can survive with a negative cash flow if this is seen as only a temporary situation. A negative cash flow is also known as the burn rate and is common at the beginning of a company's life.
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Channel Conflict: [cha] Channel conflict is the outcome of developing additional channels between the producer and consumer (often direct in terms of using the web) that targets the same group of consumers. This creates a "conflict" with existing channel members along the value chain, which are concerned with getting disintermediated. This is a common problem for legacy businesses as they explore the web for commerce.
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Click Fraud: [clic] Click fraud comprises clicking on a link that either provides monetary gain for the clicker or adds cost to the marketer whose link is being clicked (a competitor of the 'clicker' for example). This process can be automated. This causes problems for links that are based on a PPC model, and is thus a problem for search engine advertising programs and affiliate programs. The problem is compounded in search engine marketing as the host, who manages the advertising programs, actually benefits from the rogue behavior.
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(Web) Client: [cli] The client refers to the user end of the web. Thus the web browser (Internet Explorer or Firefox) serves as a client. This is in contrast to the server, which hosts the web information.
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Client-side Scripting: [clie] Client-side scripting is used to present content to the web browser, with which the user can then interact, or content that data from the users' machine interacts (date / time etc.). Client-side scripts rely on the capabilities of the client machine / browser, which contrasts with server-side scripts which rely on the server for functionality.
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Collaborative Filtering [col]: Collaborative filtering is a process used to match data of one user with data of similar users, based on purchase patterns, in order to generate recommendations for the user for future purchases. Amazon is a good example of a company that uses collaborative filtering in order to make its recommendations, based on a customer's prior purchases and the purchases of those who have purchased similar products. This is an example of market segmentation, based on customer behaviour, rather than the more traditional metrics of demographics and psychographics.
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Contextual Marketing [con] : Contextual marketing is marketing that occurs in the context of when a person is more likely to be interested in the product/industry. Thus, a page sponsorship can be considered contextual, as the viewer has elected to view the page, and assuming the sponsorship is for a product that is related to the content of the page, the product has the right context (the viewer self-selected to view the content). Text advertisements that are relevant to the content of the web page on which they appear are another example of contextual marketing. An example of this is the advertising programs run by search engines that have advertisements served based on the keywords that the user uses to search.

Contextual Marketing is becoming more popular with increasing use of search engine marketing, and will only gain greater strength with the evolution of wireless marketing (m-commerce). Wireless marketing will take advantage of knowing where the consumer is located using GPS. This can then translate into marketing messages that have direct relevance to the consumer as the messages relate to the context of the consumer at the point in time they are being delivered.
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Chat Rooms: [cha] See Discussion Boards
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Contribution Margins (Margins): [marg] Contribution margins (or margins) refer to the amount of revenue per product that is available to "contribute" towards the fixed costs and the profit of the company. Since, for digital products, the variable costs are typically very small, or zero, most of the revenue earned from the sale of a product form the contribution margin. Assuming the contribution margin (unit price - unit variable cost) > 0, then the product merits marketing, since the fixed costs are sunk. This also assumes the product does not cannibalize sales from another product in the product line, if so, the opportunity costs need to be considered.
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Cookie File: [coo] The cookie file is a file that resides on the client machine. It contains data passed from web sites, so that web sites can communicate with this file when the same user (client machine) returns. The web site only has access to the part of the cookie file that represents the interaction with that particular web site. The cookie file has caused some issues with respect to privacy. Considering that as consumers, we do not know what information is being stored in the file, we should become concerned! The cookie file was first developed in order to help sites with the transaction process of the web. Without a cookie file, web sites are not able to track a single user's path through a web site, thus a transaction that required multiple pages (as most do) would simply not be workable.
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Copyright: [cop] Copyright refers to the rights provided to the author of certain types of intellectual property, including software. The author uses a license to establish how others can use the software. Even free software will include a license to ensure the work remains free.
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CPM, PPC, CPC, CPA: [cpm] CPM (Cost per 1,000), PPC (Pay per Click), CPC (Cost per Click) and CPA (Cost per Action) are types business models for calculating the charge for pages (advertisements) being served. CPM is a holdover from traditional media advertising, and does not take advantage of the Hypertext nature of the medium. It charges purely on the number of times the advertisement is served. It does account for branding effects, that are not accounted for in the other models. PPC and CPC refer to a cost (payment) associated with each click on the advertisement to the target page. CPA is a cost associated with each lead created from a click on the advertisement (CPL), or each sale (CPS). Both PPC / CPC and CPA are much more accountable means of developing a price for the advertisement, and either are also used for affiliate programs and text advertisements on search engines. They become a variable cost in terms of generating the number of people exposed to the target page (this number is based on the CTR from the host vehicle), the number of leads generated (CPL) or the number of sales (CPS). The downside for the vehicles is they do not control the design of the banner (poor design = low click-through etc.) and they are not rewarded for the branding effect of the banner. Click fraud is also an increasing problem.
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CRM: [crm] CRM (Customer Relationship Management) is a business strategy built around the concept of being customer-centric. The main goals are to optimise revenue through improved customer satisfaction via improved interactions at each customer touch point. This can be accomplished by a better understanding of customers, based on their purchasing patterns and demographics, and better information empowerment at all customer touch points, whether with employees or other media interfaces.
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Cryptography: [cry] Cryptography is the field of securing data. It began with a focus on securing data in transit (data encryption), but has expanded to other areas such as digital cash and authentication (digital signatures and timestamps). The field of encryption pre-dates modern times (frequency analysis) but gained particular significance during World War II as a means to secure data from and listen to the enemy. It has become very important in the information age.

A simple example of cryptography is the public key cryptography. The sender and receiver must have both a public key (to read the data) and a private key to encrypt the data. The public key can be made freely available to recipients of a message as long as the private key remains private.

Encryption presents problems for governments which need to 'listen' to data transferred over the internet. Governments need to do this to track illegal money transfers and listen to terrorist chatter for example. Thus governments prefer weaker standards of encryption than those who require data to be secure, such as those requiring legitimate security for e-commerce. Until 2000 the US Government restricted the use of "strong" encryption for export (encryption of over 56 bits in symmetric algorithms). This has now been relaxed somewhat unless the end user is from specific countries (i.e. Cuba, Iran, Iraq etc.) RSA Security - Crypto FAQ is a good resource for Cryptography.
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CTR: [ctr] CTR (Click-Through Rate) is the number of times an advertisement is clicked upon over the number of times the advertisement is served. Typical click-through rates have been declining (a click through rate of 1% would be very high). While click through rates help determine the effectiveness of the online advertisement, advertisements also contain a branding impact. The click-through rate will determine the cost of an advertising campagn that was based on PPC / CPC and CPA.
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CSS: [css] CSS (Cascading Style Sheets) are used by web designers to describe the design of the web page (entire web site.) Rather than rely solely on HTML (structure), CSS allows for more central control such that making one edit in the CSS file can make consistent changes across an entire web site. CSS content can be included as a separate file (pointed to in the header of the web page); included entirely in the header of the web page; or included directly in the body of the web page. CSS also allows for creating different presentations dependent on the media, so a document that is printed out can be printer-friendly versus the same document on screen.
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Cybersquatting: [cyb] Cybersquatting refers to the behaviour of acquiring a domain name with the principle purpose of reselling that domain name. The resale could be to an entity that would be willing to pay a higher price (typically a trademark holder); or an entity who had previously used the domain name but inadvertantly lost it as a consequence of not re-registering.
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Dell [dell]: Dell.com; Wikipedia; Archive

(Technology) Diffusion Process: [diff] The diffusion process refers to the process of adoption of new products by the consumer marketplace. The consumer marketplace is segmented into four groups: innovators (2.5% of population), early adopters (13.5%), early majority (34%), late majority (34%), and laggards (16%). Thus innovators are more likely to adopt a new product earlier than the early majority etc. This has implications for target marketing with new products.
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Digital Cash: [digi] Digital cash is money exchanged only over the network (web). Paypal is a provider of digital cash. Smart cards are also used to provide electronic money exchange, more frequently used outside the US. Encryption is used to maintain the integrity of digital cash.
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Digital Divide: [digd] Digital divide represents the gap between those who have access to the internet and those who do not. Those who have access to the internet typically come from wealthier segments of society, and wealthier countries. Access can be defined in terms of access to the physical infrastructure of the internet, or access via literacy. Access to the internet itself creates significant advantages to those who have it, further exacerbating the divide.
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Digital Products: [dig] Digital products are intangible products that can be downloaded over a digital network. They have zero copy costs, and users can make perfect copies. The cost structure of digital products (high fixed costs that are sunk, and tending towards zero marginal costs) in conjunction with the above features changes the economics of digital products vs. traditional goods.
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Diminishing Returns: [dim] Diminishing returns refers to the notion that the return that a company receives for additional effort decreases as the number of units / output increases. This is typical of industrial goods, but is in contrast to the phenomena of network effects and increasing returns for digital goods. Diminishing returns explains why industrial companies become more inefficient once they grow over a certain size. Thus firms do not compete as effectively when in a large monopolistic market than they do in an oligopolistic market (car company for example) assuming the size of the market is over the scale limit that traditional firms can operate efficiently.
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Discussion Boards and Chat Rooms: [dis] Discussion boards allow for asynchronous discussion between 2 or more people over a period of time. Chat rooms are designed for synchronous discussion at one time. Discussion boards are typically available for review, at any time, chat rooms have no data until a chat session begins.

Discussion boards are useful to allow many people to become involved in online "conversations" over a period of time. A site that has used discussion boards effectively is slashdot.org. This site is a community that serves as a meeting place for those interested in the advancement of all things digital, as they say: "News for nerds!" The site's content essentially is created by its community, which in turn becomes more closely associated with the site as they are developing the site. Other sites attempt to achieve this without as much success. Slashdot's success lies in its structure: initial discussion content short, but with enough information to establish context, this allows discussion to follow. The ClueTrain Manifesto, while being radical in its approach and view points, makes a compelling case for commercial sites to include a discussion board to allow for conversations among consumers, and between consumers and employees. The Student 2 student aspect of the Wharton MBA Admissions site follows this thesis. The content on this site is content marketing could not pay for, and comes from credible sources.

Chat Rooms are useful for gathering people together for "quick" events that are centered around specific topics. They are very good for brainstorming events, and to resolve problems that need quick discussion. Chat rooms are often used in conjunction with discussion boards to satisfy communication needs of the organization. Unfortunately the terms, discussion boards and chat rooms, are often confused, people refering the two as chat rooms.

Instant Messaging and blogging are other forms of communication evolving on the web. In fact, slashdot, noted above, is a blog in its truest sense, but behaves very much like a discussion board.
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Disintermediation: [disi] Disintermediation refers to the potential for members of traditional value chains (distribution channels) to become obsolete as the producer markets more directly with its consumers using the web. This occurs with legacy businesses. While channels (using the web) are presumed to become shorter, in reality, the channels actually include different types of intermediaries (infomediaries) such as meta-markets (also referred to as industry portals) that help gather many industry players and consumers into a marketspace.
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Disruptive Technology: [disr] This is a technology that changes the industry in such a way that previous competitive and business rules change. Since the internet has had such a profound effect on the fundamental rules of business, it can be considered a disruptive technology. CD technology was another good example of a disruptive technology. When CDs were introduced to the music business, they were a disruptive technology, changing the status quo, and requiring users to purchase new hardware, despite there being a significant installed-base of record players and record collections. P2P, and more recently iTunes are similarly changing the music industry and those that rely on CD sales.
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Domain Name: [dom] A domain name (also known as a host name) is an alphanumeric name that identifies a computer on the internet. While it is possible to reach computers on the internet by using the IP address, IP addresses are not easy to remember. Domain names provide an easily referenced way of reaching remote computers. The domain name is the first part of the web address or URL. For example, this web page's domain name is www.udel.edu

The Domain Name Service (DNS) stores a database of mappings from domain names to IP addresses and performs lookups for the IP address when a domain name is used in a network request. To avoid network congestion, lookups are performed on root servers with current copies of the central directory. These root servers are further copied by ISPs. To register a domain name for the .com, .org, .biz, .net, .info and .name, you can use one of the accredited registrars, and their resellers. ICANN.org is the accrediting agency that approves resellers and resolves disputes. You can learn about information behind the ownership of a domain name by using the WHOIS service. ccTLDs (country code top level domains, such as .uk, .at and .fr) are handled independently and visiting the country's site is important to understand the rules.

Domain names are an important branding tool for a business. Businesses are thus keen to protect their trademarks by acquiring their appropriate domain name(s). Cybersquatting is the behaviour of a user who acquires a domain name for the sole purpose of reselling at a higher price. Clearly domain names can have significant economic value, the highest price reported to be $14m.
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DoubleClick [doubleclick]: DoubleClick.com; Wikipedia; Archive

Dynamic Pricing: [dyn] Dynamic Pricing refers to a fluid pricing scheme between the buyer and seller, rather than the more traditional (and more recent, over the last 100 years) fixed pricing. Dynamic pricing is a legacy from the past, that has losts its prominance with the advent of the industrial revolution and mass marketing and mass communication. Before the industrial revolution, most trade occured in markets, with many buyers and sellers bartering for goods.

Current and evolving models for dynamic pricing include the auction pricing system, group pricing system and reverse pricing system. Typically these systems will better reflect the true market value of the product involved, but also require additional work on the part of the purchaser. These systems will evolve more rapidly when better standards are established and when intelligent agents evolve. Not all markets will be served well with a dynamic pricing model.

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eBay.com [ebay]: eBay.com; Wikipedia; Archive

E-Commerce: [ecom] E-commerce refers to all forms of business activities conducted across the internet. This can include E-tailing, B2B, intranets and extranets, online advertising, and simply online presences of any form that are used for some type of communication (customer service for example).
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Economies of Scale: [econ] Economies of scale refers to the notion of increasing efficiencies of the production of goods as the number of goods being produced increases. Typically the average costs of producing a good will diminish as each additional good is produced, since the fixed costs are shared over an increasing number of units.

Due to economies of scale, larger companies have greater access to markets in terms of selecting media to access those markets, and can operate with larger geographic reach.

For traditional companies, size does have its limits, where additional size actually increases costs to companies (impacts communications costs etc., diminishing returns). Thus many industries tend to operate more effectively in an oligopolistic fashion, with few large firms, rather than one monopolist. (This should occur even if the government allowed monopolists and monopolists behaved legally). Digital companies tend not to suffer from this scale limitation.
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Ecosystem: [eco] An ecosystem is a system whose members benefit from each other's participation via symbiotic relationships (positive sum relationships). It is a term that originated from biology, and refers to self-sustaining systems.

The bumblebee hive is an example of an ecosystem, highlighted in Bernd Heinrich's book, Bumblebee Economics. The bumblebees' hive is a living system with one goal, to gather enough energy to ensure the survival of the bumblebee's genetic information. Bumblebees (unlike most other species) live in colonies and depend on each other for survival. Bumblebees extract pollen for protein and nectar for their sole source of energy from neighboring plants. Plants, in turn, rely on bumblebees to inadvertently brush pollen from one plant to another, to enable the plants' reproduction process to begin. The relationship between the bumblebee and the plant is symbiotic, as each benefits from each other's participation. The bumblebee hive goes through a life-cycle, through the year. Entering the fall the queen bee lays eggs that are fed a different diet. These eggs turn into virgin queens and males. When the frost hits, the remaining worker bees die as does the queen, the virgin queens and males fly off, mate, the males die and the inseminated queens seek shelter through the winter. The process then begins again.

As it applies to business, an ecosystem can be viewed as a system where the relationships established across different industries become mutually beneficial, self-sustaining and (somewhat) closed. This is clearly the case for Silicon Valley with the entrepreneurial industry, the venture capital industry needed to fund the entrepreneurial industry, and Stanford University (birthplace of google and Yahoo! etc.), supplying the human capital needed to develop innovative/creative ideas and technologies. The goal of this ecosystem is to generate entrepreneurial ventures. Once an ecosystem is established, and is able to take first-mover advantage, it becomes very difficult for other regions to emulate. The region exhibits network effects and is able to establish lock-in since the switching costs associated with moving to another region are prohibitive. The collective costs of many moving out of the region (i.e. if another region tried to incentivize a large move) would be prohibitive. Thus current members have a clear incentive to remain, and new would-be entrepreneurs, venture capitalists and students interested in this industry have a significant incentive to relocate to this region.
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E-tailing: [eta] E-tailing refers to retailing over the internet. Thus an e-tailer is a B2C business that executes a transaction with the final consumer. E-tailers can be pure play businesses like Amazon.com or businesses that have evolved from a legacy business, Tesco.com. E-tailing is a subset of e-commerce.
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eWallet: [ewa] eWallet is a system that stores a customer's data for easy retrieval for online purchases. Since completing forms as part of an e-tail transaction can be a reason for aborting a transaction (shopping cart abandonment), an eWallet service can reduce this inconvenience for the consumer.
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Extranet: [ext] Extranet refers to a group of web sites, belonging to independent entities, that are combined together in order to share private information. This is in contrast to an intranet, which is a private site that is only accessible to one entity. Extranets are used in the supply chains to allow for more effective communications along the supply chain. Firewalls are used to protect the extranet from those excluded access. Extranets are replacing proprietary standard networks that are considerably more expensive to establish, and therefore were only used by large organizations (EDI).
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FAQ: [faq] FAQ is an acronym for Frequently Asked Questions. A FAQ document is a document found on company web sites that addresses basic questions. These documents are updated from queries that come from the customers, so they should evolve over time.
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Filesharing: [fil] Filesharing refers to peer-to-peer technology that allows one user of the internet to access files of another user of the internet through a public directory. Before the advent of WWW, this was the primary form of internet information sharing, through public (and private) FTP sites. It has now emerged as a methodology for sharing digital files across the web. Napster pioneered this, distributing music files. Others, such as gnutella are proving to be interesting distribution models for music etc. Filesharing is coming under increasing scrutiny for copyright issues.
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Firewall: [fire] A firewall is a piece of software or hardware designed to serve as a barrier to exclude outside intruders, typically those on the internet, access to internal content. Companies often adopt firewalls in order to keep their internal communications private (intranets and extranets). Firewalls can also sometimes prevent those behind the firewall communicating with web-sites on the internet that require cookies for the transaction.
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First-Mover Advantage: [fir] The First-Mover Advantage refers to the advantage gained by the first company that enters a certain market. This advantage is exacerbated for digital products and markets. There are a number of reasons this advantage exists. A company that is able to increase sales quickly is able to reduce the average cost of the product, over other competitors. This allows the first company to have more flexibility with pricing, either reducing the price to make it less attractive for new entrants (increasing barriers to entry) or increasing the margin and therefore profit while prices remain fixed, this additional profit can then be used for further innovation. The first-mover can also take advantage of the learning curve effect. First-mover advantage can be further successful if the company is able to achieve lock-in of its installed-base. Thus once lock-in occurs, it is more difficult for other marketers to attract those customers away from the first marketer. Risks of being the first mover include the opportunity for others to imitate and follow best practices (learn from any mistakes).

First-mover advantage is not always sustainable, and Microsoft has been very effective at being the second company in many markets, and subsequently dominating those markets. A simple example of this was the Netscape's browser vs. Microsoft's Internet Explorer. Netscape was the first-mover, gaining upwards of 90% market-share, but was not able to sustain its position with the onslaught of Microsoft. Netscape did not establish ANY lock-in, either due to the user interface, or proprietary functionality and both products were essentially being given away, so there was no price advantage. Microsoft is clearly positioned to give a product away for the long-term to gain market share.
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Fixed Costs: [fix] Fixed costs refer to the costs associated with a product, that are fixed over a number of units. Thus regardless of the number of units produced and sold, the fixed costs remain the same. Examples of fixed costs are rent on equipment, utility costs, and research and development costs. With digital products, much of the fixed costs are actually sunk costs, and therefore non-recoverable costs. A large portion of the costs associated with digital products are fixed, and sunk, and not variable costs, which are more typical of traditional manufactured goods. Break even analysis, which is a tool that determines the volume at which a company must sell a product in order to break even, distinguishes between fixed and variable costs in its calculations.
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Flexibility of the Communications Medium: [fle] The flexibility of the communication's medium refers to its ability to serve multiple roles for the marketer. Media typically are limited in terms of the types of transactions they can accomplish. TV is very good for reaching a large audience with a 30 second message, but is not useful for customer service. The web, however, is truly flexible. It can communicate information to multiple target audiences, simultaneously. It can provide and support customer service initiatives and it can be used to execute transactions. It is the first medium that can serve multiple roles simultaneously. The web also breaks the reach versus richness tradeoff of more traditional media.
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Forking: [for] Forking refers to the notion that a software project may evolve in multiple directions as multiple people have different goals for the project. This may occur under the open source development model. It is highly discouraged, as it does not maximize the use of resources. A good leader of an open source project will develop a process to try to avoid this situation. An exception to this was the development of Firefox, a fork of the Mozilla Project. Firefox is now the Mozilla's main development focus.
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Free-Rider: [fre] The free-rider effect refers to the notion that non-contributors to a project can benefit from other people's work on the project. This effect is posed as a criticism of open source. The question is, does the free-rider effect negatively impact an open source project. Since free-riders do not actually diminish any resources as they use the product (open source software) and assuming they are not adding any additional costs to the project (asking questions etc.) then the answer is no. For those who want to use the product, but need after sales service and customer support, a paid alternative may be available. (Red Hat for Linux is an example.)

The essay, Tragedy of the Commons, highlights the consequences of the free-rider issue when resources are finite. The argument is, the more people that use the resource, the more the resource is depleted. Thus in this environment, we cannot afford free-riders, those not contributing to development of the resource. With an open source project, the opposite effect is true, as more developers work with the code, the better the product, and those not developing code (free-riders) have no negative impact on the code's development.
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Free Software: [free] Free Software is software that allows the owner the 'freedom' to use the software, and alter the software in anyway he / she desires. Thus it is more akin to freedom of speech, rather than free as in zero cost (in fact, free software licenses can allow for the sale of free software under certain conditions). Free software development has evolved from the early hacker culture, where all software was free software. Free software is distributed with its source code. Access to this source code allows developers to improve and adapt the code for the individual use. Developers that do modify the code may be required (via the software's license) to submit any modifications back to the initiators of the project (submitting a patch). This allows any improvements, or resolved bugs, to be included in new releases of the product.

Free Software can include a license, explaining the rights of the developer and the usability for the owner of the copy. The GNU GPL license, designed by Richard Stallman and the FSF, has been very successful in developing a movement for the greater availability of free software. This free software is part of Richard Stallman's GNU project (Gnu's Not Unix).

In 1997 the term open source was developed with the thought of using this term to replace free software, as the free implied no cost, which in turn implied not good work. Since this time, there has been a split in the free software movement camps, with the open source group (evangelized by Eric Raymond) promoting the business advantages of free software, and the free software camp promoting the ideological aspects of free software. The ideological aspects are that all software should be freely available, so developers can expand on each others' work in order to continue the development process. Once code has been taken private, that innovation is lost to the public domain. Since that code will include previous "open" work (as would any work that has evolved from other work) it should also remain open. The freedom ideology works best if all software code is open, and does not tolerate free software and proprietary software coexisting. Once some code goes proprietary, the advantages of freedom are diluted, as free software development is now excluded from some development initiatives.

Of all the successes of the free software / open source movement, one can look at the GNU/Linux development.
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FTP: [ftp] File Transfer Protocol (FTP) is a protocol used on the internet in order to transfer files. It was a popular means of making files available over the internet, either via public or private FTP sites, before the advent of the web. Site developers now use FTP to upload / download files to the server when making changes / additions to web pages.
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Game Theory: [gam] Game Theory is a theory of rational behavior of participants in interactive decision-making scenarios. It helps predict how other participants of the situation / scenario (game) will respond in certain situations, or to certain decisions. Understanding participants' responses ahead of a decision, should help the initial decision maker make better decisions. It is applicable in areas such as:

• open source development. Free-rider issues for example. Should you contribute resources when someone else may benefit without contribution?
• standards setting. Should you cooperate with your competitors to help expand and standardize the marketplace?
• dynamic pricing. Should you bid at a price point, and will that create a higher bid from someone else?
• competitor reactions to decisions. When making marketing decisions, you cannot only analyze how your customers may respond without considering how your competitors will respond, as this will in turn impact your customers' responses.

A popular game theory model, for a non-zero sum situation, is the prisoners dilemma.
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Gnutella.com [gnutella]: gnutella.com; Wikipedia; Archive

GPS: [gps] Global Positioning System (GPS) is a satellite-based system that identifies the location of a receiver. This is useful in mobile commerce as it allows the marketer to design content based not only on the individual, but where the individual is at the point the message is delivered. GPS systems are also used in cars to provide mapping systems, which can also be aligned with appropriate marketing messages. GPS is a US-based system, the EU has recently announced the development of a competing system, Galileo.
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Google.com: [google] Google.com; Wikipedia; Archive

Group Buying Model: [grou] Group Buying Model refers to the notion that the internet allows individual consumers to develop a community and participate in purchases by multiple people with similar needs. TogetherWeSAVE.com is an example (Note: Mercata and Accompany closed, signaling this model is not yet matured!) Individuals are now able to take advantage of purchasing economies of scale that previously were only afforded to large companies. This in itself helps the power shift away from the company, to the individual consumer, but when combined with the reverse pricing model can create a potent consumer weapon. The essay, COMsumer Manifesto, details possible implications.
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Groupware: [gro] Groupware refers to technology that allows for groups of people to communicate from remote locations. The internet can be considered the ultimate open standard groupware technology! Applications typically included in groupware techology are calendars, discussion boards, project management tools, e-mail facilities etc. Microsoft Exchange and Lotus Notes are the more common commercial applications.
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Hackers and Crackers: [hac] Hackers is a term used for those who have been closely associated with the development of the computer, outside of the traditional corporate structure, and the free software movement (also known as the Open Source movement). Those that help develop code to improve (or create new) software, and share that code with fellow hackers. Hackers therefore make things. Crackers break things. Crackers are those who get their thrills by cracking software, creating viruses, and destroying things. Unfortunately media often confuse the terms, thus the term hacker, when mentioned in mainstream media, usually refers to crackers!

The hacker philosophy is one of sharing, openness, and decentralization (a distinct disdain for bureaucracy), that helps the innovative process and increases the knowledge-base of the culture. The hacker culture typically has an antagonistic relationship with the corporate entities who dominate the technology industry (this used to be IBM, and now Microsoft). Their values and belief systems are not aligned with these bureaucracies (who hoard knowledge and turn it into their selfish gain, rather than share knowledge and believe in the freedom of knowledge). Along these lines, hackers believe in the selflessness in favor of the common good. Communities of hackers can be found at sites like Slashdot.org.

Clearly this culture experiences network effects. The more people involved and contributing to a particular project, the more each person involved benefits from each others' innovations. This clearly answers the question as to how the Linux operating system was able to become a more robust operating system (according to some) than the Windows operating system, in a much shorter time frame.

Key figures in the hacker community are Richard Stallman (believes that all software should be free), Linus Torvalds (initiator and leader of the Linux development) and Eric Raymond (believes software should be free when it makes business sense).
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Header: [hea] The header component of a web page comprises the title and the meta tags and any style sheet content (CSS). All elements critical for marketing and design of a web page. A web page includes two components, the header and the body component. The body component includes the content that is visible to the user. By clicking the "view" and then the "source" option of the web browser, you can see the header and body tags for this document.
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Hewlett-Packard [hewlettpackard]: hp.com; Wikipedia; Archive

Hits: [hit] Hits refer to the number of files served when users access a web page. Total hits for a page will therefore equal the number of times the page is accessed X the number of files included on a page. Thus a page that includes one graphic file will serve two files when it is accessed; the html file of the page, and the image file the page calls. This is a metric that is often misused when media quote the activity a web page receives. (To double the number of hits, simply double the number of files the page includes.) Better metrics, for web analytics, include impressions and page views.
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Homepage: [hom] The homepage of a web site is the entry point to the site. It is the page that will usually have a web address (URL) that ends with .com, .edu, .org, .gov or .cc (the 2 letter code for the country outside the USA). The actual filename, in the above scenarios, is index.html Users can create their own homepages that may be subsidiary to the above, and therefore use a subdirectory, but using index.html as the filename is still better (otherwise viewers can see the files in your directory by typing that filename with the file path). While the homepage is designed to be the entry point to a web site, designers cannot assume that all viewers will enter the web site by that page. It is important to consider all pages as potential entry points, and design all pages to market the site online (search engine optimization etc.) and for easy navigation to find the homepage.
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Hotmail: [hotmail] Hotmail.com; Wikipedia; Archive

Hypertext: [hyp] Hypertext refers to the connectivity between web documents, which is non-linear. Thus any part of the document (word or phrase) can launch another document, or another part of the same document, via a hyperlink. In this example, the word web is hyperlinking to an explanation of the word, which appears at the end of this dictionary!
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HTML: [htm] HTML (Hypertext Markup Language) is the original and principal language of the world wide web. Invented by Tim Berners-Lee in 1990, it is a derivative of SGML. The W3C is the organization charged with ensuring the compatibility of HTML with competing browsers and other web languages. The following is a brief historical timeline of the development of HTML. To learn HTML two popular guides are ncsa's Beginners Guide to HTML and The Barebones Guide to HTML. You can also view the HTML used for this (and any page) by accessing 'view' 'view source' from the top left of your browser.
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IBM: [ibm] IBM.com; Wikipedia; Archive

Identity Theft: [ide] Identity theft refers to the stealing of information about a person that allows a second person to assume the identity of the first. Essentially this only requires knowledge of very limited information, including a social security number. While most Identity Theft still occurs through traditional means of scouring house hold waste materials, the threat of theft over the internet is a concern for e-commerce. It can occur as data is in transit (for a transaction) or data that is stored on a company's site, that is stolen, or from phishing activities. Theft can also occur via google hacking (i.e. documents that are available on the internet that should not be available, but are easily found via the search engines.) Identity theft is a major concern for privacy advocates.
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(Page) Impressions: [imp] Impressions refers to the number of times a page is accessed over a fixed period of time. Thus if a page receives 1,000 impressions per day, then that page is accessed 1,000 over the course of the day. This term is often confused with hits, which is actually an incorrect use of this term (hits and number of impressions would be the same if the page was simply a text page with no additional files associated with it). Page impressions also equals the number of times an advertisement is served, assuming a banner is served each time the page is accessed. Impressions are a metric used in web analytics.
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Increasing Returns: [inc] Increasing returns refers to the notion that the greater the size of the network, the greater the advantage of each participant of the network (network effects). Each participant of the network brings value to the overall network. This is in contrast to diminishing returns which refers to the greater the size (number of users) the less each participant can benefit from participation. Broad examples of increasing returns include an open source project (the more contributors, the better the product) and a proprietary communications device (the more users of the device, the more people with whom a user can conmmunicate).

Google's search engine experiences increasing returns. The more content it houses in its databases, the more links it has pointing to various sites on the internet. In bound links are an aspect of the PageRank system that provides the google results. These results therefore improve as the volume of content increases (this was not the case for more traditional engines like Alta Vista that were based principally on keywords only, which does not scale as well.) Another example of increasing returns can be seen with Amazon's recommendation system, via collaborative filtering. The more users that are using the Amazon system, the greater the integrity of the recommendation system.
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Industrial Revolution: [ind] This is the period of time that occured after developments such as the steam combustion engine allowed for more efficient production of goods. The advent of the assembly line etc. occured. It basically changed production from single goods to mass production. Mid 1800s to early 1930s.
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Infomediaries: [inf] Infomediaries are channel intermediaries that are based on the transfer of information using the web. They are replacing traditional intermediaries in many distribution channels. Infomediaries include meta markets, portals, search engines, and bots.
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Installed-Base: [ins] The installed-base refers to the customer-base of digital products. The company will have records of these customers (demographic and purchase behaviour), and will be able to use these records in order to try to monetize the installed-base. Companies try to develop switching costs, in order to encourage their installed-base to remain loyal. By estimating the life-time value of a customer in the installed-base, we can estimate the value of the company.
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Instant Messaging: [inst] Instant messaging is a form of synchronous communication that allows users, on a specific network (AOL Instant Messenger, ICQ.com and MSN Messenger for instance) to communicate with other users, on that network, by sending short messages. Instant messaging services also allow users to determine when other users are online. Given that users can only communicate with other users on the same network, these services are certainly good examples of services that take advantage of viral marketing. It is likely that, with time, these services may standardize, so users of one network will be able to communicate with users on another network. This model makes more sense, and is used for a similar service, text messaging on cell phones, more common in countries outside the United States.
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Intellectual Property: [intell] Intellectual property refers to the rights provided to the owner of an expressed idea; invention; authored piece of work; a process; or a name attached to a company or product.

A copyright protects creative content such as books, software and art. The copyright controls the potential for reproduction of the works. A patent protects an invention and an innovative process. A patent provides exclusive use of the invention for a fixed period of time. This creates a monopoly for the invention. A trademark is a sign, name or symbol that distinguishes one company, or product, from another. It is designed to reduce customer confusion. Intellectual property is granted on a territorial basis, but harmonization is occuring via international treaties within the WTO for instance.
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Intelligent Agents: [inte] Intelligent Agents are "bots" designed to work for the user in terms of executing transactions (typically search queries at this point) across the web. It is assumed that as Intelligent Agents become more sophisticated, they can accomplish more complex tasks for their users. Once they understand their users' requirements, they can act somewhat independently of user interaction, in terms of making online purchasing decisions and other tasks that currently require significant search and user decision making processes. Intelligent Agents will also become more useful as the semantic web develops.
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Interstitial Pages: [inter] Interstitial pages are a form of online advertising that appears between web pages that the user requests. Thus when a user elects to enter or exit a web-site, a page appears with its advertisement, in place of the requested page, the user then needs to select from that page to receive the page requested (or the advertisement page will disappear after a fixed time). This is a form of interruption advertising (similar to broadcast models) but this form of web advertising breaks information design rules, as the user had a certain set of expectations when making the page selection, the interstitial page did not match expectations.
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Intranet: [intr] An Intranet is a network based on the internet TCP/IP open standard. An intranet belongs to an organization, and is designed to be accessible only by the organization's members, employees, or others with authorization. An intranet's Web site looks and acts just like other Web sites, but has a firewall surrounding it to fend off unauthorized users. Intranets are used to share information. Secure intranets are much less expensive to build and manage than private, proprietary-standard networks (EDI).
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IP Address: [ipa] An IP address is a numerical address of the computer broken into 4 groups of 3 digit numbers lower than 254. In most cases, these addresses are unique for each internet connected computer throughout the world. Originally, addresses were obtained from Internet's Network Information Center (InterNIC) and later, in the Americas, the American Registry for Internet Numbers (ARIN). Today, only large ISPs are eligible to obtain addresses from ARIN, everyone else must request and address from their ISP. There is an exception to the uniqueness of addresses: Specific groups of addresses are set aside for use on internal networks for machines not connected to the internet or trying to conserve address space. These addresses are either 10.x.x.x, 172.16.x.x, or 192.168.x.x. Use of these addresses is becoming more popular due to the shortage of addresses, which makes individual addresses expensive to obtain and keep, and the costs associated with changing all network addresses when changing ISPs, and the popularity of internet connection sharing in small business or home networks.

The IP address can also be used to help determine from where a web browser is located. This enables sites to present content specific to the location of the browser. For example Amazon is able to present amazon.co.uk content to browsers who are accessing the site from the UK. Sites can also restrict access to a range of IP addresses, therefore Google is able to limit IP addresses originated in China to google.cn. Similarly sites can present unique content to individual IP addresses based on previous activity with that IP address. This helps with personalization.

As a web browser, we access a computer on the web by calling the domain name, which masks the IP address. Domain names are easier to recall. Domain names serve as the first part of the URL (web address).
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IPO: [ipo] Initial Public Offering (IPO) refers to the offering of stock in a company to the public through a public market. NASDAQ is a popular market for e-commerce related companies. The IPO of a company serves as a significant liquidity opportunity for early investors, including founders and the Venture Capital investors.
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Internet: [int] This is the network of networks, developed in the 1960s as a result of a US defence industry project DARPANET. It encompasses what we now know as E-mail, Usenet Newsgroups, the Web, FTP and Telnet.
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ISP: [isp] ISP (Internet Service Provider) is the access consumers have to the internet. Commercial ISPs include companies like AOL. There are many regional ISPs, and students can consider their University as their ISP if that is how they access the internet. The connection between the consumer and the ISP is typically the slowest aspect of the internet (also known as the last mile problem). The ISP will then have a connection to the backbone of the internet, which is essentially a collection of larger ISPs (MCI, British Telecom, UUnet) via a T1 line or similar.
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Keyword: [key] Keyword is the term used for words included in a web page that would match words used by web surfers in finding that web page (via a search engine). Identifying appropriate keywords and using them on a web site is important for search engine optimization. Keywords can simply be words included in the body text of the document, or added to the header using meta tags to increase the number of keywords. Using keywords in the title tag is also important. Selecting keywords, that match your target audiences' use of the web when searching your product, is a critical marketing tactic.

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Last Mile Issue: [las] The Last Mile issue refers to the connection between the user and the ISP, which is typically the slowest aspect of the internet access. As with a chain, the quality of access is governed by the weakest link, thus the slow connection impacts the entire web browsing experience. This issue evolved due to the lack of competition in the telecom industry, until very recently. Therefore technology innovation was not as rapid (read very slow) compared to other innovations governed by Moore's Law. Some users (in the U.S.) typically connect from home with a 56K modem. Broadband access, via cable modems and DSL technologies are beginning to become more widely adopted.
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Learning Curve: [lea] The learning curve (also known as the experience curve) represents the outcome of a company's experience when developing a product. As the company becomes more experienced, it is able to develop a better product, and / or develop products more efficiently at reduced cost. The learning curve effect has a significant role in helping companies benefit from first-mover advantage. Later entrants into the marketplace have a difficult time overcoming the experience advantage, as first-movers release additional versions of the product.
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Legacy Business: [leg] Legacy Business refers to a traditional business that develops a web presence to transact business. Barnes and Noble is an example. This is in contrast to a pure play business, which is developed as a new entity for the web, and had no prior presence, such as amazon.com.
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License: [lic] A license is used to allow the author of a piece of software (intellectual property) to establish the rights of a user in terms of the copy of that software that contains the license. Unlike tangible goods, which are clearly limited in terms of what an owner can do with the product, digital goods are easy to make perfect copies. It is therefore important to establish limits. While the user may have purchased a digital copy, this does not imply freedom of use of that copy. The license will detail what the user is able to do (in terms of resell, number of machines the software can be applied, making modifications to the software etc.) The free software movement (also known as open source) has created a set of licenses that creates greater freedom of use of software, which is more appropriate for innovation among the hacker community.
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Lifetime Value: [lif] Lifetime Value of the Customer determines the value of a customer to a firm, over the lifecycle of that customer. This removes the focus on individual transactions with customers and has become increasingly used with the developments of technology and market research, and thus the ability to focus on narrower target markets, even to the individual consumer in some cases. Lifetime Value is an important measure used for relationship marketing programs. Lifetime Value of Customers was a popular metric for internet firms as they built their customer-bases.

In order to calculate the Lifetime Value, the company needs to determine the cost of customer acquisition, and the cost of customer retention, the average lifetime of a customer, and the average value the customer provides over its lifetime. It is important to distinguish between customer acquisition and retention, as this will allow marketers to understand the true value of a specific marketing campaign (cost of acquisition), and the value new customers can bring over their lifecycle (value to company - cost of retention).

The Lifetime Value of the Customer = The revenue provided to the company by the customer over its lifetime - (Cost of Customer Acquisition + Cost of Customer Retention).
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Linux: [lin]: Linux is an open source (free sofware) kernel developed by Linus Torvalds, and uses software tools developed by the GNU project to comprise an open source operating system. It mimics the Unix kernel, but was written from scratch with no proprietary code. Its development cycle has been relatively short (compared to the proprietary based Windows operating system) and is considered by some to be technically superior. Due to this, it has become the "poster child" for the open source community (it stimulated the interest of Eric Raymond and the paper Cathedral and Bazaar) and free software in general. While it is commonly referred to as Linux, others refer to it as GNU/Linux (Richard Stallman) due to its reliance on other GNU software in order for it to function (more details here). Linux did prove to be the "missing link" for the GNU project by providing a usable operating system kernel, which has been packaged into a complete free software operating system by other hackers and commercial distributors (principal commercial distributor: Red Hat). GNUs efforts in this regard (the GNU Hurd) are still on going. Linux has wide adoption in the much smaller server side operating system market. Its penetration on the client side (where windows is dominant) has been limited to the hacker community.
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Lock-in: [loc] Lock-in refers to the ability of companies to ensure their customers do not switch to competitors, thus switching costs can establish lock-in. Switching costs can be established in many ways. The usability of a product can establish lock-in for that product, as customers learn how to use the product, they don't want to reinvest in learning how to use competing products. Wall Street Journal is a good example of trying to establish this type of lock-in. It heavily discounts its product to the education market, hoping that as people get used to getting their business information via the Journal, they will continue to do so after they graduate and begin working. The user interface of digital products are another example of this type of lock-in. The airlines establish lock-in by developing frequent flyer programs. As people fly more with one airline, the benefits they receive increase, in a non-linear fashion.

B2B markets, that increasingly rely on relationships and long-term contracts are clearly prone to lock-in.
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Marginal Costs: [marcost] Marginal costs are the costs associated with creating an additional unit of product. This is similar to variable costs, which are the costs that increase directly with the increase in production (unlike fixed costs). Digital products typically have very low marginal costs, when compared with traditional goods (materials, labor etc.) and if the product is distributed via a web site, then the marginal costs can be zero. The consumer is bearing the distribution costs, and there are no packaging costs. This is why companies are able to market their products for free on their web sites, in order to try to entice further purchases at a later time (in the hopes of creating lock-in perhaps). Netscape pioneered this approach and was able to offer its versions of its browser on its web site, changing the way software is marketed. This enabled them to create significant market share very quickly. They were able to do this, due to zero marginal costs.
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Marginal Consumer: [marcon] Marginal Consumers are the consumers that value the product least in terms of it satisfying their needs (the value proposition for the product is weakest among those that purchase the product). They are most likely to switch to other products to satisfy their needs, and will be the first in the marketplace to do so, if the marketplace changes in favor of another product to satisfy the same needs.
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Market: [mark] A market traditionally referred to a place where buyers and sellers met to exchange goods. The exchange is a function of the positive sum relationship of the buyer and seller. A market is now better defined as a group of buyers and sellers for a particular product (a group of people who share a similar need). The advent of technology (industrial revolution) has seen the separation of supply and consumption, hence the broader term for a market.

Types of markets include consumer (the exchange involves the final consumer, also known as