Introduction to e-Commerce

1. Introduction to e-Commerce Laws of the Web Dr. Michael D. Featherstone

2. Laws of the Web Moore’s Law which describes advances in the speed of digital technology, in particular microprocessors. Metcalfe’s Law which relates the value of a digital network to the number of connections (or users or members) it has. Power Law which relates to the distribution of Websites and the relative ‘Popularity of sites as measured by inbound links.

3. Laws of the Web MOORE’S LAW The most popular formulation is of the doubling of the number of transistors on integrated circuits every 18 months However, it is also common to cite Moore's Law to refer to the rapidly continuing advance in computing power per unit cost, because increase in transistor count is also a rough measure of computer processing power. Moore’s Law is named after an observation made by Gordon Moore of Intel in 1965. He observed a rapid growth in the number of transistors packed onto each integrated circuit and predicted that this trend would continue. Time has proved the observation to be accurate. In 1965 complex chips had only 64 transistors, while many over 30 years later, the Itanium processor had 410 million transistors. Exponential means, in this instance, that the number of transistors double approximately every eighteen months to two years and the performance of processors increases accordingly (Dave Chaffey, April 2005).

4. Moore’s Law 1980 64K Memory 500K 8 inch floppy disk Price per Byte Mem = $.05 Price per Byte Storage = $.007 Base Price.. $3500 Well configured price .. $6000 2011 4 Gigabyte Memory 500 GB Hard Drive Price per Byte Mem = $.000000599 Price per Byte Strg. = $.000000002396 Base Price.. $1125 Well configured price .. $1125

5. 1980 Ford Mustang, $6,408 Average car price $5,413.00 2011 Ford Mustang, $36,520 Moore’s Law (does not apply to cars)

6. Laws of the Web A little video

7. Laws of the Web METCALFE’S LAW The value of a network is proportional to the square of the number of nodes on the network. Metcalfe’s law relates to the power of an interconnected network to enable collaboration and extend the reach of an organisation. We often forget that Internet is short for ‘Interconnected network’ The web followed what is known as Metcalfe’s law first stated by Bob Metcalfe, who was co-founder and former chief executive of networking company 3Com. He was reputed to have said in presentations made for the company: ‘The power of the network increases exponentially by the number of computers connected to it. Therefore, every computer added to the network both uses it as a resource while adding resources in a spiral of increasing value and choice.’ (Dave Chaffey, April 2005).

8. Networks 101 What is the ‘Value’ of this network?

9. Networks 101 What is the ‘Value’ of this network? V a N² V= Value of the network N=Number of nodes in the network

10. Metcalf’s Law

11. Power Law POWER LAW DISTRIBUTION OF WEBSITES In many networks, nodes have about the same number of links to them. But on the Web a few pages have a huge number of other pages linking to them, and a very large number of pages have only a few pages linking to them. Northeastern University’s Albert-László Barabási and his colleagues coined the term “scale-free” to characterize such networks [see “Scale-Free Networks,” by Albert-László Barabási and Eric Bonabeau; Scientific American, May 2003]. Many people were surprised because they assumed Web pages would have an average number of links to and from them. • Power laws as related to websites may be verbally represented as: • a very few sites that rank very high in the number of inbound links; • a larger number of sites with close to median numbers of inbound links; • a great number of sites with very few inbound links. • In short, the Web has many small elements, and few large ones. A few sites have millions of pages but millions of sites have only a few pages. A few sites have millions of inbound links, but millions of sites have only a few inbound links.

12. Power Law

13. This Concludes Today’s Presentation Thank you for your attention