Introduction.....................................................................................2

Theorizing New Economic Space............................................................3

The Internet and Commerce.................................................................4

Customer Service Functions..................................................................7

Eccomerce........................................................................................8

Conclusions.......................................................................................9

References.......................................................................................11

This paper examines the impacts of the Internet on business activity. Established

corporations and startup firms are utilizing the Internet to create new markets and

reorganize existing markets. Ubiquity and low cost make the Internet a powerful force

for transforming business activity and facilitating new venture creation. Firms are using

Customer service functions have always been a time-consuming person-to-person activity, however much of this is highly routinized. An important recent step in automating customer service was telephone call processing, but this was a slow system with very low bandwidth. In other words, an excessively long menu of choices leads to consumer disconnection and difficulties in creating user-friendly branching systems. More sophisticated non-human intermediated customer service would have to wait until the consumer had a device able to handle greater amounts of information, i.e., the PC and a computer modem. When the installed base grew and the technology was sufficiently mature it became possible to place information on a server open to customers. This redefined customer service by increasing the level of provision while decreasing the cost. This was possible because most interactions are entirely standard. For example, many customer questions are for routine information such as store hours and directions. Answers to such questions can be codified, indexed, and stored on a server to be accessed online and downloaded. For simple questions such as directions the Internet can download a map, whereas on the telephone error-prone verbal instructions are necessary. Essentially, customers can access the information they need to find and create value for themselves from the provider's web site at practically no-cost except the initial startup costs.

Despite the seemingly obvious commercial applicability of the Internet, no one dominant model of doing business has yet emerged. The Internet has presented itself to business as uncharted territory, forcing firms to blindly grope for strategies that work. Those firms who wish to succeed in Internet commerce have had to confront three unique characteristics. The first is ubiquity. By this we mean that all "places" on the Internet are accessible to the user on what is essentially an unlimited and equal basis. The user can go anywhere on the net with a minimum of effort; there is no inherent technological reason for the user to start at a particular point.

The success of online travel agencies is apparent. For example, Microsoft's Expedia site launched in 1996 had more than $12 million in monthly sales in January 1998 and was growing quickly. As important, the U.S. travel industry is being reorganized, not only with new entrants such as Microsoft, but also as the airlines are reducing the fees they pay to travel agents and encouraging customers to buy tickets directly through their web sites. In the process these web sites are being built into virtual places. For those desiring human contact, the offline travel agent will remain available, but increasingly they will be paid for directly by the user, witness the increasing use of service charges by the offline travel agencies (a tactic that will accelerate the movement of customers to the online agencies).

The convenience and availability of information are important advantages. However, online travel agencies have yet another advantage, namely, they can post comments from previous travelers, thereby creating interaction and information exchange. This multiplies, simplifies, and makes interactive the "letters to the editor" columns found in newspaper travel sections. The interactive possibilities permit online discussions regarding specific types of travel. This virtual community adds value to the site and is a mechanism for retaining customers who can change sites at the click of a button. Moreover, the knowledge generated through these discussions could permit the discovery of new market needs, thus giving rise to new products. The community and its interactions add value that the travel agency does not need to compensate.

By the early 1990s the Internet hosted a vast collection of useful information and downloadable software. However, most of the tools for accessing this information were primitive and required a certain amount of expe

Some common words found in the essay are:
Microsoft's Expedia, Adobe Acrobat, Economic Space, Traffic Internet, Federal Express, Functions Customer, Money Outlook, Internet Based, Street Journal, Barnes Noble, customer service, web sites, web site, travel agency, online travel, federal express, product service, low cost, startup costs, travel agent, world wide web, customer service functions, online travel agency, agency conventional agency, online travel agencies,
Approximate Word count = 5859
Approximate Pages = 23 (250 words per page double spaced)