ELC 498

1
ELC 498

• Day 19

2
Agenda

• November 10
• Rosenbluth International and Biztravel.com Anup
• November 14
• Round 3 Grading OVER due
• 10 penalty in class participation score if not
  in on time
• Wit Capital-Steve
• Recap of Online brokers
• Intro to Online Market Makers

• November 17
• Priceline WebHouse -Jeff
• November 21
• eBricks.com -Donnie
• November 28
• Sothebys-Kristin
• Recap of Market Makers
• Intro to Networked Utility Providers

3
Agenda

• December 1
• Adobe Systems Anup
• Round 4 Grading due
• Recap of Networked Utility Providers
• Intro to Application Service Providers
• December 5
• Everdream -?

• December 8
• Doubletwist -?
• Recap of Application service providers
• Student Case studies due
• December 12
• Student Case study Presentation
• December 15
• Student Case study Presentation
• Final Exam Assigned
• Final weeks
• Final Exam Due

4
INTERNET BUSINESS MODELS

• ACCESS PROVIDERS
• PORTALS
• CONTENT PROVIDERS
• RETAILERS OF PHYSICAL GOODS
• BROKERS
• Microsoft Carpoint DLJdirect Rosenbluth Travel
  Wit Capital
• MARKET MAKERS

5
Issues Facing Online Brokers

• How many sellers should you present? (Quicken
  too many hassle Staples best of breed
  WebHouse one-at-a-time okay? CNET offer
  all, but give preference to those who pay)
• Should you accept an equity investment from a
  major seller? (Carpoint/Ford WebHouse)
• Can you be a retailer yourself and not drive away
  other sellers? (Quicken vs. InsWeb vs. eCoverage
  CNET Carpoint vs. CarsDirect.com)
• Whos side are you on? (Carpoint presents only a
  single quote to consumer)

6
GBF??

• Network effects
• More clients gtgt more trading partners?
• Depends on
• Buyer and Seller Heterogeneity
• Idiosyncratic preferences vs. Commoditization
• Client Exclusivity
• Sole representation of a group
• Not strong for same brokers
• Scale economies
• Large fixed costs
• Customer retention
• Depends on Brokerage type
• Website usability stickiness
• GBF for online brokers
• ??