1)Internet technology is the key enabling technology for the digital integration of the modern company.

A complete change of mindset is required for firms to implement electronic commerce and electronic business successfully.

Transaction costs are higher in Internet business.

One advantage of using Internet technology is that it provides the infrastructure to allow information to flow seamlessly from one part of the organization to another.

The Internet can replace existing distribution channels or extend them.

The Internet breaks the traditional link between the flow of the product and the flow of product-related information.

Information asymmetry refers to the situation where the relative bargaining power of two parties in a transaction is determined by one party in the transaction possessing more information essential to the transaction than the other party.

Answer:  True

The time and money spent locating a suitable product and determining the best price for that product defines location costs.

The use of the Web has increased information asymmetry between sellers and buyers.

Before the Internet, businesses had to make tradeoffs between the richness and the reach of information.

The transaction broker Internet business model sells physical products directly to consumers or to individual businesses.

A banner ad opens automatically and does not disappear until the user clicks on it.

A major source of revenue for online communities is providing ways for corporations to target customers.

A portal is a graphic display on a Web page that, when clicked, takes the viewer to another Web page.

Some companies use internal portals to give employees streamlined access to specialized information resources.

The three major e-commerce categories are bricks-and-mortar, pure-play, and syndicators.

A syndicator is a business that aggregates content or applications from multiple sources, packaging them for distribution, and reselling them to third-party Web sites.

Pure-play refers to business models based solely on the Internet.

Disintermediation provides major benefits to the distributor.

It is unusual for companies to use Web pages to analyze customer information.

Amazon.com uses Web personalization as a major marketing tool.

Because personal information is often gathered without the customer’s knowledge, it is illegal to use such information to personalize a Web page.

Customer self-service, while attractive to the customer, is expensive for the company offering it.

Web sites cannot currently provide customers with Web page/call center interaction.

A private exchange is a subset of a private industrial network.

Direct goods are those that are sent directly to the company, such as office supplies and products for maintenance and repair.

Net marketplaces serve both vertical and horizontal markets.

Suppliers have been reluctant to participate in Internet exchanges because competitive bidding drives prices down without the normal benefits of cutting prices.

Digital credit card payments make credit cards safer to use on the Internet.

Accumulated balance digital payment systems allow consumers to make instant online payments to merchants and other individuals based on conventional credit card payments.

Peer-to-peer payment systems provide electronic checks with a secure digital signature.

Digital cash can be used for micropayments or larger purchases.

Digital checks are more expensive than credit cards but faster than paper-based checking.

Intranets are becoming the technology of choice for electronic business.

A principal use of intranets is to create online repositories of information that can be updated often and quickly.

Intranets can be used to create enterprise collaboration environments linking diverse groups and activities in the organization.

Major uses of the intranet for the sales and marketing departments are on-line training and order tracking.

It is more difficult to develop intranets integrating manufacturing data under a uniform interface than to develop them in other functional areas.

Intranets and extranets can be used to electronically coordinate cross-functional processes inside and outside the organization.

Channel conflict can create negative repercussions, especially when commission sales to area sales representatives are involved.