E-Commerce: Croudsourcing

E-Commerce: Crowdsourcing

Commerce can be defined simply as the buying and selling of goods and services between people, businesses, and even nations. With the technological enhancements provided by the Internet and information technology, commerce has entered the electronic age. Electronic, or e-commerce, is "commerce accelerated and enhanced by IT" and with this form of commerce, issues of time, geographical location, currency, language and culture are no longer barriers in the exchanging of goods and services (Haag, 128).

The Internet has given businesses a tighter grip on the global economy as a whole and a close look from the past into the future shows the rise of many e-business trends. Closing Case Study Two in chapter 5 of the text book focuses on one e-business trend in particular, crowd-sourcing. Crowd-sourcing is when businesses tap into the collective intelligence of the public at large to complete business related tasks that a company would normally either perform itself or outsource to a third party at cost. It is literally using crowds of people, rather than paid staff or contractors, enabled by technology, to create, contribute to, and even oversee the development of new products or services (Haag, 154). Examples of companies that utilize this trend are Monster.com, e-Bay, and MySpace. These companies create value for it's users by providing a platform for the exchange of products, services, ideas, discussions, and more.

Wikipedia is another example of a company that utilizes crowd-sourcing. It is a web-based, free content encyclopedia that is openly editable by anyone who has access to the internet. It was founded in 2001 and has grown to host over 91,000 active contributors and over 15,000,000 articles in almost 300 languages. Although content-oriented sites like Wikipedia don't create their own content, they do have to oversee or "police" the information that is posted in certain ways. There are concerns about the posting of pornography or inaccurate information and while this website does not require its contributors to be scholarly or experts on the topics they write about, there are content guidelines. The content on Wikipedia is intended to be factual, based on existing knowledge, and verifiable from other credible sources. Original research or "new ideas" are excluded from this website. Opinions are also not permitted within Wikipedia entries and all information must be presented in a neutral, non biased manner. With these guidelines in mind, all contributions made to Wikipedia may be reviewed, edited, or removed at any time due to issues of civility, misinformation, or in the event something that is posted cannot be verified.

The "open community" structure of Wikipedia allows anyone to edit articles however there is an organized hierarchy of permissions and positions in place when it comes to certain "protected" articles and also the overseeing or monitoring of the content on the website. This hierarchy includes non registered users with general editing capabilities, Auto-confirmed editors who, unlike non registered users, are able to move and remove articles, edit semi protected articles and even vote in certain elections, Administrators with even greater editing authority, Bureaucrats, an Arbitration Committee to resolve disputes, Stewards, The Board of Directors, and finally, Jimmy Wales, the founder of Wikipedia. Detailed information outlining the "chain of command" can be found at http://en.wikipedia.org/wiki/Wikipedia:About#Wikipedia_content_criteria. It is important to note that all the above positions require peer approval. The review and editing of content goes beyond spell check and verifiability. The site also has to be monitored for vandalism and abuse. Intentional vandalism can be reported and corrected by anyone with internet access and a sock puppet policy is in place to address issues of account abuse.

Overall, Wikipedia can provide a wealth of information and may be used as a research tool but users are warned that as with any source, there is always the chance that bad or inappropriate content will be posted. The site is reviewed, edited and updated on a continual basis by its users. The likelihood of inaccuracy is increased by human error and the individuals who perform these tasks are not paid to do so but the frequency of inaccurate information on Wikipedia is low and the goal, of course, is always to provide correct, timely and unbiased information.

MySpace.com, another website that uses crowd-sourcing was built as a social network for friends to meet other friends online and as the website grew, so did the benefactors of marketing. It became one of the most popular social networking websites in the world. MySpace operates on revenues generated by online advertising through website banner ads as its user model possesses no paid-for features for the end user. MySpace is second only to Yahoo! in its capacity to collect data about its users and in its ability to use behavioral targeting to select the ads each visitor sees through its website and affiliated ad networks. Myspace uses creating and selling software to automate tasks within the network such as initiating and confirming friends, posting status updates and bulletins, and sending messaged via email. Myspace also allows users to upload pictures and music to personalize their user pages. Myspace and networking websites like it purchase software programs like these in bundles which start at about $50 each.

Since Myspace.com is not a website where products and services are bought and sold and it doesn't charge users to join, the question of how MySpace makes its money is a good one. The answer lies in online advertising. A large number of webmasters, marketers and businesses line up to promote their products and services on MySpace.com. The number of people reached by the ads run on MySpace.com is in the millions per day. This volume of advertising is priceless to some businesses and they will pay top dollar or a spot on such a frequently visited website. This is how MySpace makes its money and this is why MySpace.com was able to sell for $85 million.

Monster.com is another example a crowd-sourcing site. It offers free labor to employers who want to advertise job listings to potential and qualified employees. In this case, free labor is only a small part of the crowd-sourcing appeal. More importantly, it enables managers to expand the size of their talent pool while also gaining deeper insight into what customers really want. Monster.com is an example of how big businesses are scoring free with internet awareness and that makes crowd-sourcing more beneficial when combined with lower costs