E-Commerce Security COEN 351 Thomas Schwarz S J

E-Commerce Security COEN 351 Thomas Schwarz, S. J.

Amazon. com 1994: Bezos founds amazon. com 1995: Amazon opens for business; competes on prize, selection, convenience, service. Business model promises low overhead. 1999: Bezos is man of the year for Time magazine. 2000: 2. 7 B$ revenue, 1. 4 B$ loss starts search for profitability. 2002: First ever profits. 4 B$ revenue 2005: First quarter net revenue 1. 9 B$, net income 78 M$

E-Commerce n E-commerce n n Use of the internet to transact business. E-commerce I n n n 1995 – 2000: explosive growth, extraordinary innovation March 2000: dot. bust 2001 – today: solid growth, less hype

E-Commerce I n n Disintermediation Friction-free commerce n n Information equally distributed Transaction costs are low Prices are dynamically adjusted Goal of “First Mover” n Successful first mover becomes new intermediary $120 B$ capitalization for 12, 450 dot start-ups 10% survival rate, very few profitable

E-Commerce II n n n Earning and profits emphasis Traditional Financing Stronger regulation and governance Strengthening intermediaries Imperfect markets Mixed “click and brick” strategies

E-Commerce Business Model n n n n Value proposition (Why buy from you? ) Revenue model (How will you make money? ) Market opportunity Competitive environment Market strategy Organizational development Management team

E-Commerce Business Model n Revenue Model n n n Advertising revenue model Subscription revenue model Transaction fee revenue model Sales revenue model Affiliate revenue model

E-Commerce Business Model B 2 C n n Portals E-tailers n n Content provider Transaction broker Market creator n n n Competitive market because barrier to entry is low Brings buyers and sellers together Service Provider Community Provider

E-Commerce Business Model B 2 B n n E-Distributor (Sales of goods) E-Procurement (Fees, supply chain management, fulfillment services) Exchanges (Fees, commissions on transactions) Industry Consortia

Emerging E-Commerce Business Models n n C 2 C: e. Bay P 2 P: Kazaa M-commerce (mobile commerce), uses wireless E-commerce enablers

Internet Fraud Complaints 2003 n n n n n Auction fraud 46. 1% Non-delivery 31. 3% Credit / Debit card fraud 11. 6% Investment fraud 1. 5% Business fraud 1. 3% Confidence fraud 1. 1% Identity theft 1. 0% Check fraud 0. 5% Nigerian letter fraud 0. 4% Communications fraud 0. 1%

Fraud Complaints Internet Crime Center

Fraud Complaints Internet Crime Center

Fraud Complaints Internet Crime Center

Internet Fraud Statistics First Half 2005 n n n n n Instance Auctions General Merch. Nigerian Scam Fake Checks Phishing Lotteries Info / Adult services Work-at-Home Plans Computer Equip. / Software % compl. 44% 30% 7% 5% 4% 3% 2% 1% 1% Average Loss $999 $4, 389 $11, 370 $4, 733 $298 $3, 953 $277 $726 $608 Source: National Internet Fraud Watch Information Center Data is on complaints by consumers.

E-Commerce Security n n n Integrity Non-repudiation Authenticity Confidentiality Privacy Availability

E-Commerce Security n Threats: n n n n Malicious Code Hacking, Cybervandalism Credit Card Fraud Spoofing Do. S, DDo. S Sniffing Insider Jobs