University of Aberdeen Session 1996-97

University of Aberdeen Session 1996-97

  1. Privacy Issues – adapted from CNET and

b)The Internet advertising company “DoubleClick” uses cookies to record Internet users’ surfing habits. In January 2000 DoubleClick changed its privacy policy; DoubleClick made the information that it had gathered about individuals available to members of a new advertising network. What could a business gain by having access to information about an individual’s surfing habits? Are there any potential benefits for the consumer?


c)Transmissions to the DoubleClick advert servers include the unique ID number stored in a DoubleClick cookie on the user’s machine. This means that the adverts viewed can be linked to the specific user. Security expert Richard Smith used a "packet sniffer" to monitor what information DoubleClick banner adverts were gathering from him through the cookie it assigned to him. He discovered that Web sites were transmitting information such as his email address, full name, mailing address and phone number. Transactional data he said was sent to DoubleClick included names of VHS movies he was interested in buying, details of a plane trip, search phrases used at search engines and health conditions he researched. Why should a consumer be concerned about this?


d)DoubleClick launched its own informational Web site “”, to inform users about online privacy and make it easier to opt out of DoubleClick's profiling network. In your opinion, what was DoubleClick’s motivation for setting up this site?


e)“Online privacy is not an absolute right.”
Give some reasons for why this may be true.



2. Open Source Software:

a)Describe some of the possible revenue streams for a company which invests in software development and makes the source code freely available (the open source model).


b)Discuss the advantages (or disadvantages) of the open source business model both for the company producing the software and the customer. The following categories are given to get you started, you may discuss other aspects too:

(i)Research and development; (ii) Marketing; (iii) Robustness and security.


c)Read the following extracts from news articles and answer the question below.

IBM fuels "freeware" efforts - CNET News, 1998

IBM will bolster the movement to provide source code over the Net next week when it announces a deal to bundle and support Apache's freely distributed Web server. Big Blue is attempting to create a groundswell of support for its Web-based application development offerings, which includes widespread Java support as well as a new line of Web application server software scheduled to ship this month, as previously reported.

"I think what we'll do over time is legitimize this particular offering for enterprise usage," said IBM.

IBM to spend $1 billion on Linux in 2001

- CNET News, 2000

IBM chief executive Louis Gerstner said Tuesday that his company will spend $1 billion on Linux next year. The investment underscores IBM's increasing commitment to the operating system, across all product lines: PCs, portables, servers and mainframes. IBM is making the commitment because it "is convinced that Linux can do for business applications what the Internet did for networking and communications" – make computing easier and free from proprietary operating systems.

IBM donates Net communications technology

- CNET News, 2000

IBM has donated an Internet communications technology to the Apache Software Foundation, a non-profit organization that builds free Web software. The computing giant today said it has given away its communications software that allows businesses to link their computing systems over the Net and conduct trades online. The software, called Simple Object Access Protocol (SOAP) for Java, is based on a Web standard for exchanging data called XML (Extensible Markup Language). The product is a working version of a communications technology developed by Microsoft, IBM, Lotus Development and others that could potentially become an Internet standard for linking Web-based software.

IBM's Open Source Plan to "Eclipse" .Net

-CIO Update, 2002

With an eye on the popularity of Microsoft's software development tools, which can be used to write code for any Windows operating system, IBM earlier this year released as open source the source code on which it is basing its current generation of software development tools. Called Eclipse, the platform appears to be rapidly gaining momentum, both among software vendors who sell software development tools, and with users drawn to its open source model.

More than 175 software vendors, including major tool providers such as Rational, Borland and Macromedia, are now shipping Eclipse-based products or plug-ins.

IBM released the code to the open source community in November 2001., founded that some month, is a consortium of software companies which includes both major tool vendors such as Rational, Borland, Webgain and Sybase, and open source leaders like SuSe, Red Hat and MontaVista. IBM competitor HP is also a member.

The goal is to provide a vendor-neutral platform that lets software companies -- and individuals -- develop tools that integrate with other tools "so seamlessly you can't tell where one tool ends and another starts."

For IBM, Eclipse was a way of creating an industry-wide platform for Java-based software development that could provide an alternative to Microsoft's development tools, and the looming popularity of .Net.

Question: Given that the provision of open source software does not directly generate any revenue for IBM,
what are the possible strategic reasons for IBM's involvement in open source initiatives?



3.Read the following case study and then answer the questions below.

Audio Equipment Manufacturer Makes Sales on eBay Sing– case study from

For Herman Sperling, group vice president of marketing, the question of whether to leverage eBay as a distribution channel for Harman Audio was never “Will it work?” Rather the question was “What do we need to do to make it work?”

“Over 50 million potential customers are now on eBay,” he said. “It is fundamental to a marketing person to take their products to where the market meets.”

An internal team at Harman Audio did an initial test of the concept – posting items on eBay themselves. The products sold well, but the details of posting large quantities of inventory while managing customer service proved formidable. Harman Audio began searching for a way to automate as much of the process as possible, seeking a strategic alliance that would help them both understand and manage the channel. The manufacturer found ChannelAdvisor – a company of experts devoted to handling all facets of selling on consumer marketplaces.

ChannelAdvisor began by working with Harman Audio to revamp its presentation on eBay. The team created a new storefront design that showcases three of the Harman brands – Infinity, JBL and Harman Kardon. ChannelAdvisor also worked with Harman Audio to design ad templates for its product postings as well as a customer checkout process that maximizes up-sell opportunities by integrating other Harman Audio product recommendations. Key marketing messages and brand elements were incorporated into an easy-to-navigate design that encourages visiting customers to explore the listings, buy the products and build loyalty.

In September of 2001, the new store launched. ChannelAdvisor assumed much of the day-to-day channel management including promotion planning, inventory preparation and posting, responses to transactional inquiries, customer contact after close of auctions, and comprehensive analysis reports that ensure results are solidly hitting goals. Harman Audio retains responsibility for supplying merchandise, offering technical customer support, as well as processing and fulfilling orders.

ChannelAdvisor works closely with Harman Audio and eBay to celebrate their complementary strengths to promote the on-line community. Harman Audio has been featured frequently on eBay’s home page, and has successfully gained other prominent placements – a powerful brand extension.

“The support from eBay has been phenomenal – much more than I expected,” said Sperling. “They respect what we are trying to do and have taken a personal interest in building a relationship.”

Offering predominately refurbished inventory at one dollar no reserve – with bids soaring from $200 to nearly $6,000 for home theater systems, speakers and other audio equipment – Harman Audio has had no trouble achieving 100 percent sell-through. But Sperling stresses that focusing simply on the recovery rate – good as it is – would miss the point of what eBay has to offer.

“We are thrilled with and committed to the channel,” he said. “We are beyond the simple goal of profitably liquidating distressed inventories. We’re exposing new customers and delighting existing customers with our firm’s established commitment to product excellence by appropriately extending their reach through the auction environment on eBay.”

d)Describe the business models of each of the three companies: Harman Audio, ChannelAdvisor and eBay.


e)The article states that comprehensive analysis can be used to ensure that results are hitting goals; can you think of any other useful information that could be gleaned from a comprehensive analysis of auction sales?


f)What is dynamic pricing and why is it a good choice for “profitably liquidating distressed inventories”?


g)Discuss Harman Audio’s business strategy. Begin with the reasons for its initial decision to leverage eBay as a distribution channel and then discuss its subsequent strategic alliance with ChannelAdvisor.


4.Read the following passage and then answer the questions below.

Imagine a world where technology can empower us all to share knowledge, ideas, thoughts, humor, music, words and art with friends, strangers and future generations.

That world is here and now, made possible with the electronic network -- the Internet -- with the power to connect us all. And future develop-ments in technology will enable us to access information and communicate with others in even more powerful ways.

But governments and corporate interests world-wide are trying to prevent us from communi-cating freely through new technologies, just as when those in positions of power controlled the production and distribution of -- or even burned -- books they did not want people to read in the Middle Ages. But only by fighting for our rights to speak freely whatever the medium -- whether books, telephones, or computers -- can we protect and enhance the human condition.

- The Electronic Frontier Foundation (EFF)

a)In the case of digital products (for example software, music, films etc.) describe the ways in which the Internet facilitates their free communication and the steps that “corporate interests” are taking to prevent this.


b)To what extent do you think that “corporate interests” should be allowed to restrict the free communication of information? Discuss your reasons for the stance you adopt and discuss the possible advantages and disadvantages. Your discussion should also address the issue of whether individuals and corporations would still have an incentive to generate intellectual property if they cannot subsequently restrict access to it.


c)Why might a government try to prevent people from communicating freely through new technologies?