1.1. The advent and growth of E-Commerce

Historical development

The meaning of the term "electronic commerce" has changed over time. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, usually using technology like Electronic Data Interchange (EDI, introduced in the late 1970s) to send commercial documents like purchase orders or invoices electronically.

Later it came to include activities more precisely termed "Web commerce" -- the purchase of goods and services over the World Wide Web via secure servers (note HTTPS, a special server protocol which encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic pay services, like credit card payment authorizations.

When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols like HTTPS to become sufficiently developed and widely deployed (during the browser wars of this period). Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary Web sites.

Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online.

As of 2005, e-commerce has become well-established in major cities across much of North America, Western Europe, and certain East Asian countries like South Korea. However, e-commerce is still emerging slowly in some industrialized countries like Australia, and is practically nonexistent in many Third World countries.

Timeline

• 1990: Tim Berners-Lee wrote "The WorldWideWeb browser" using a NeXT computer.
• 1994: Netscape released the Navigator browser in October under the code name Mozilla. Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to offer flower delivery and magazine subscriptions online. "Adult" materials were also commercially available very soon. Netscape 1.0 in late 1994 introduced SSL encryption that made transactions secure.
• 1995: Jeff Bezos launched Amazon.com and the first commercial 24 hr. internet only radio station "Radio HK" started broadcasting. Dell and Cisco began to aggressively use Internet for commercial transactions.
• 1996: eBay was founded.
• 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
• 1999: business.com was sold for US $7.5 million (purchased 1997 for US $150,000) The peer-to-peer filesharing software "Napster" was launched.
• 2000: The dot-com bust.
• 2001: Merger of AOL and Time Warner.
• 2003: Amazon.com: first-ever full-year profit.