Organizational Dynamics, Vol 33, No 2, pp. 161-173, 2004 ISSN 0090-2616/S-see frontmatter G 2004 Elsevier Inc. All rights reserved doi:10.1016/ jordyn200401004 ganIzational-d E-Business Strategies and Internet Business models How the internet Adds value G.T. LUMPKIN GREGORY DESS he Internet continues to grow and evolve the Net represents something qual as a vital resource with which companies tatively new-an unprecedented can upgrade their capabilities and grow their powerful, universal communica businesses. Shop. org and Forrester Research tions medium. Far surpassing radio at, at its growth and television, this medium is digi- retail sales in the United States will top the tal, infinitely richer, and interactive $100 billion mark in 2004 which represents 4.5 Mobile comput percent of total retail sales. Business-to-busi- broadband access, wi ness(B2B)e-commerce is expected to grow works, and computing pe ower worldwide to $4.3 trillion by 2005 according to embedded in everything from refrig International Data Corp(IDC). The phenom- erators to automobiles are conver- success of youn g companies such ging into a global network that will Bay Google, and amazon are also indicative nable people to use the Net just of the Internets potential about anywhere and anytime The impact of the information technology revolution, however, goes beyond the Inter These technology-driven initiatives-the net. At a more basic level, it is the shift from Internet, wireless communications, and other analog to digital technologies that is respon digital technologies-are having a significant sible for so many new information technology impact on the economy. They have done so by (IT) capabilities. Analog was once the primary changing the ways businesses interact with technology for conveying information such as each other and with consumers This has not music recordings, voice communications, and only created an environment in which busi television signals. Many technologies have nesses must perform at a higher level-faster, made the switch from analog to digital- cheaper, smarter-but also it has created phones, Photographs, television signals, and many new business opportunities ven so, many firms are still struggling tion is here to stay. As a result, digital tech with the basic issue of how to use the Internet nology capabilities which, in essence, make igital technologies for their best advan- the Internet possible, are altering the way tage. Despite the visible and noteworthy suc business is conducted. According to digital esses such as eBay and Google, other Internet economy visionary Don Tapscott companies continue to struggle including here-to-stay giants such as Time Warner The Net is much more than just The weak economy is partially to blame another technology developmen for faltering Internet businesses. However,aE-Business Strategies and Internet Business Models: How the Internet Adds Value G.T. LUMPKIN GREGORY G. DESS T he Internet continues to grow and evolve as a vital resource with which companies can upgrade their capabilities and grow their businesses. Shop.org and Forrester Research predict that, at its present growth rate, on-line retail sales in the United States will top the $100 billion mark in 2004 which represents 4.5 percent of total retail sales. Business-to-busi￾ness (B2B) e-commerce is expected to grow worldwide to $4.3 trillion by 2005 according to International Data Corp (IDC). The phenom￾enal success of young companies such as eBay, Google, and Amazon are also indicative of the Internet’s potential. The impact of the information technology revolution, however, goes beyond the Inter￾net. At a more basic level, it is the shift from analog to digital technologies that is respon￾sible for so many new information technology (IT) capabilities. Analog was once the primary technology for conveying information such as music recordings, voice communications, and television signals. Many technologies have made the switch from analog to digital— phones, photographs, television signals, and even books—and the trend suggests digitiza￾tion is here to stay. As a result, digital tech￾nology capabilities which, in essence, make the Internet possible, are altering the way business is conducted. According to digital economy visionary Don Tapscott: The Net is much more than just another technology development; the Net represents something quali￾tatively new—an unprecedented, powerful, universal communica￾tions medium. Far surpassing radio and television, this medium is digi￾tal, infinitely richer, and interactive ... Mobile computing devices, broadband access, wireless net￾works, and computing power embedded in everything from refrig￾erators to automobiles are conver￾ging into a global network that will enable people to use the Net just about anywhere and anytime. These technology-driven initiatives—the Internet, wireless communications, and other digital technologies—are having a significant impact on the economy. They have done so by changing the ways businesses interact with each other and with consumers. This has not only created an environment in which busi￾nesses must perform at a higher level—faster, cheaper, smarter—but also it has created many new business opportunities. Even so, many firms are still struggling with the basic issue of how to use the Internet and digital technologies for their best advan￾tage. Despite the visible and noteworthy suc￾cesses such as eBay and Google, other Internet companies continue to struggle including ‘‘here-to-stay’’ giants such as Time Warner. The weak economy is partially to blame for faltering Internet businesses. However, a Organizational Dynamics, Vol. 33, No. 2, pp. 161–173, 2004 ISSN 0090-2616/$ – see frontmatter
2004 Elsevier Inc. All rights reserved. doi:10.1016/j.orgdyn.2004.01.004 www.organizational-dynamics.com 161