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PA e-Comm News JUNE 7

People still think of Amazon.com, Yahoo! and eBay as successful e-commerce startups. But these companies have matured and left the startup phase to others. So who are these others? Venture capitalists have been burned too many times and are avoiding the pure-play dot-coms for what are known as matchmaking sites. These include personal matchmaking, professional (job sites) and real estate sites. These sites can bring together diverse people from diverse places. Then there are the bargain sites, offering resale merchandise, particularly in jewelry and consumer electronics. And let’s not forget catalog sites like Lands’ End and Victoria's Secret. These sites can provide their customers with real-time information, such as seeing the items in stock, the colors and sizes. These sites are experiencing increasing success because they are multichannel. Wal-Mart, Target and Kmart all have launched online components of their retail businesses and Sears recently purchased Lands' End to beef up its Web presence. So, can the little guy succeed? Analysts point to operations like Orbitz, which is a consortium of airlines, and has grabbed market share from industry leaders in the online travel industry. Global Sports (now called GSI Commerce) provides outsourcing for e-commerce players, including deals with Kmart, Nickelodeon and Shoe Carnival. The company is following the strategy employed by Amazon by contracting with other companies who can provide online operations management while also selling its own merchandise. The next rising stars of e-commerce will be those companies that leverage the inherent benefits of the Web.

Some IT managers, struggling to convince corporate management of the vulnerability of sites to potential hackers, are resorting to hacker simulations to demonstrate how easy it is to disrupt almost any system. One of the most famous hacker simulations occurred in 1997, when the National Security Agency launched a simulation using 35 hired hackers who attacked the U.S. electronic infrastructure, achieving "root level" access in 36 Department of Defense networks and shutting down sections of the U.S. power grid and parts of the 911 network in Washington, D.C. and other cities. They also gained access to systems aboard a U.S. Navy cruiser at sea. Generally, the hacker intrusion technique is successful because most companies still leave doors open for hackers. Believe it or not, the most common password in the United States is "password." In addition, although software security patches are prominently announced and widely available, many system administrators fail to apply them as required. The most common type of hacker simulation is a remote scan of a company's network. According to experts, most hackers are not particularly innovative, preferring to follow scripts that are readily available on the Internet. In order to really test a network's security, hacker simulations must apply the same cutting-edge methods that the best hackers are capable of using.

Spam continues to drive Americans crazy. Innocent-looking e-mail messages can suddenly pull you into porn Web sites that won't let go – you try to close one porn site and another pops up. In fact, some porn spammers open windows that offer no way to back out. Many people today will not open an e-mail if they do not know the sending party; others forward their spam to the Federal Trade Commission. A free spam filter called SpamWeasel may help or some use POP-IT. The program praised the most for its anti-spam capabilities was MailWasher.

The federal court and the Federal Trade Commission have closed the door on an online scam designed to snag lost Web surfers and subject them to pop-up ads. The scam revolved around registering Internet domain names that were misspelled versions of popular, legitimate domain names, like CartoonNetwork.com, and 41 variations of Britney Spears's name. Earlier this year, the FTC announced successful action against distributors of unsolicited e-mail that hawked non-working domain names and illegal pyramid schemes.

Crooks continue to troll the Internet for victims of their get-rich-quick schemes. The FBI-led Internet fraud task force received 49,711 complaints last year; only 93 ended in an arrest. Local police see most Internet fraud as outside their jurisdiction; federal authorities see most of it as too small to pursue. So, online scammers see ways to make their fortunes. The Internet is so open that a con artist can run a million-dollar scam from a closet while government agencies and police are operating with outdated budgets, stuck in geographical jurisdictions and antiquated laws. So what protection do Net surfers have: buyer beware.

The majority of scams on the Net don't take in millions; they skim a few hundred dollars or less from thousands of individuals all over the world. That makes them hard to investigate. The Internet Fraud Complaint Center, founded in 2000, has no budget of its own and borrows its staff of 80 from the FBI. It does not investigate crime but instead collects reports from consumers and forwards them to agencies that might have jurisdiction. The center referred 16,755 complaints to law-enforcement agencies last year; three ended in an arrest, according to its annual report. The private companies that profit from the Internet, like AOL, Microsoft, Yahoo and eBay, know they lose many potential customers who fear being ripped off. But none of these services requires customers to use a postal address; an e-mail address and credit-card number are enough. Some agencies are less than sympathetic to victims of online scams who they believe were done in by their own greed.

This season’s release of blockbuster movies has sparked an unprecedented frenzy of film piracy, including download bootleg copies of "Spider-Man" and "Star Wars: Episode II - Attack of the Clones." As many as 400,000 to 600,000 illicit copies of films are downloaded every day. The vast majority of the bootleg activity is occurring on well-known file-swapping sites.

Hackers electronically invaded California’ s state computers in April and gained access to information that included the Social Security numbers of virtually every one of the 265,000 people on California's payroll. This sounded new alarms to the problem of identity theft. While the computers contained the last names and first and middle initials, as well as Social Security numbers of state employees, they didn't hold information such as addresses, or checking account or credit card numbers. Some cases of identity theft involve people arrested for a misdemeanor who claimed to have lost their IDs and gave false Social Security numbers instead -- with the criminal charge going on the innocent victim of identity theft’s record. This is a very difficult problem to correct.

Antivirus protection for cell phones and other wireless devices is available from security software vendors like Symantec, McAfee.com and F-Secure. But IS managers are willing to assume the risk without such protection because the danger of viruses spreading through PDAs and mobile phones is not yet that serious because most such devices lack processing power and memory. One virus is Epoc which powers backlights on and off and drains the batteries of Palm OS mobile devices. 

EDUCATION INFORMATION

Access Pennsylvania Main Street – Two Day Workshop

This program is open to small business owners who wish to learn about electronic commerce. During 12 hours of hands-on training, participants will: learn to use the Internet as a business research tool to find new markets or suppliers, or to check out the competition; decide if a Web presence is right for their business; understand what goes into creating a Web site; learn techniques to effectively promote a Web site; learn how to incorporate the Internet into their business plan. Curriculum and additional information are available at: www.ebusiness.extension.psu,edu/

Dates: June 25 & 27; July 10 & 12; August 12 & 14; August 19 & 23; August 27 & 29; September 10 & 12; September 17 & 19 at various Penn State University and HACC campuses. Sponsored by Penn State Cooperative Extension with the support of Ben Franklin Partnership, Penn State Continuing Education, Lebanon Valley Chamber of Commerce, Harrisburg Area Community College.

NEWS & NOTES is a service of the PA e-Commerce Association. Please forward this e-mail to anyone else who might be interested in the content or in learning more about the Association. Remember to visit our website @  www.paecomm.org or call 717-238-9366.

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