Practical Handbook of Internet Computing, Munindar P. Singh (ed.), CRC Press, 2004.
Copyright (c) 2004, CRC Press.
Even before the advent of the world-wide web, it was widely recognized that emerging global communication networks offered the potential to revolutionize trading and commerce. The web explosion of the late 1990s was thus accompanied immediately by a frenzy of effort attempting to translate existing markets and introduce new ones to the Internet medium. Although many of these early marketplaces did not survive, quite a few important ones did, and there are many examples where the Internet has enabled fundamental change in the conduct of trade. Although we are still in early days, automating commerce via online markets has in many sectors already led to dramatic efficiency gains through reduction of transaction costs, improved matching of buyers and sellers, and broadening the scope of trading relationships.
Of course, we could not hope to cover in this space the full range of interesting ways in which the Internet contributes to the automation of market activities. Instead, this chapter addresses a particular slice of electronic commerce, in which the Internet provides a new medium for marketplaces. Since the population of online marketplaces is in great flux, we focus on general concepts and organizing principles, illustrated by a few examples rather than attempting an exhaustive survey.