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11
43) Market creators:
A) save users money and time by processing online sales transactions.
B) provide a digital environment where buyers and sellers can establish prices for products.
C) create revenue by providing digital content over the web.
D) sell physical products directly to consumers or individual businesses.
E) provide an online meeting place where people with similar interests can communicate.
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
44) Which of the following best illustrates the sales revenue model?
A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she makes
a purchase.
C) Photobucket provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Pandora provides free service with limited play and advertising.
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
45) Which of the following best illustrates the affiliate revenue model?
A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she makes
a purchase.
C) Photobucket provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Pandora provides free service with limited play and advertising.
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
46) Which of the following best illustrates the transaction fee revenue model?
A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she makes
a purchase.
C) Photobucket provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Pandora provides free service with limited play and advertising.
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
12
47) In which of the following revenue models does a website charge a fee for access to some or
all of its offerings on a continual, regular basis?
A) Subscription
B) Advertising
C) Transaction fee
D) Sales
E) Affiliate
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
48) Which of the following best illustrates the advertising revenue model?
A) eBay receives a small fee from a seller if a seller is successful in selling an item.
B) Yelp receives a fee after steering a customer to a participating website where he or she makes
a purchase.
C) Photobucket provides basic services for free, but charges a premium for advanced services.
D) Apple accepts micropayments for single music track downloads.
E) Pandora provides free service with limited play and advertising.
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
49) Content providers use ________ systems to process large amounts of very small monetary
transactions cost-effectively.
A) subscription
B) mobile payment
C) transaction fee
D) micropayment
E) freemium
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
50) Which of the following companies uses the market creator business model?
A) Expedia
B) ETrade
C) Facebook
D) Yahoo
E) eBay
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
13
51) Netflix uses which of the following revenue models?
A) Advertising
B) Transaction fee
C) Subscription
D) Freemium
E) Affiliate
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
52) Photobucket is an example of the service provider business model.
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
53) Blue Nile is an example of the content provider business model.
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
54) Podcasting allows subscribers to listen to live, streaming radio and other audio content.
AACSB: Analytical Thinking
LO: 10.2: What are the principal e-commerce business and revenue models?
55) Uber uses a form of dynamic pricing.
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
56) In the free/freemium revenue model, firms offer basic services for free and charge a fee for
special features.
AACSB: Application of Knowledge
LO: 10.2: What are the principal e-commerce business and revenue models?
14
57) List and describe at least five different Internet business models. Which of these models do
you think would be the most risky for a startup business today? Support your answer.
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.2: What are the principal e-commerce business and revenue models?
58) List and describe the three main categories of electronic commerce. Which do you think is
ultimately the most valuable to the individual consumer? Support your answer.
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.2: What are the principal e-commerce business and revenue models?
59) What methods could a portal use to generate revenue? Which do you think might be most
successful, and why?
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.2: What are the principal e-commerce business and revenue models?
60) You are consulting for Lucky's, a chain of gas stations. What types of e-commerce
opportunities, if any, are relevant to Lucky's? Could Lucky's make use of any Internet business
models for this opportunity?
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.2: What are the principal e-commerce business and revenue models?
15
61) List and describe the top five methods of online marketing and advertising formats in terms
of 2014 revenue?
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.2: What are the principal e-commerce business and revenue models?
62) Netflix's public announcement of a reward for a technology solution to its movie
recommendation system is an example of:
A) prediction markets.
B) behavioral targeting.
C) long-tail marketing.
D) crowdsourcing.
E) social sign-on.
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
63) Exposing an individual to ads that are chosen and based on the online behavior of the
individual is referred to as:
A) clickstream advertising.
B) behavioral targeting.
C) online profiling.
D) long tail marketing.
E) prediction marketing.
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
16
64) Which of the following best describes the digital social graph?
A) A person's direct and indirect relationships
B) All of a person's closest digital relationships
C) A mapping of all online social relationships
D) All of the online and offline relationships a person has
E) A map of your 10 closest friends
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
65) Facebook's Like button is an example of which of the following?
A) Social sign-on
B) Collaborative shopping
C) Network notification
D) Social search
E) Crowdsourcing
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
66) Which of the following is the fastest growing format of online advertising?
A) Search engine ads
B) Video ads
C) Rich media ads
D) Classified ads
E) Email
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
67) ________ attempts to leverage the fact that there is always some demand, however small, for
a product.
A) Long tail marketing
B) Behavioral targeting
C) Crowdsourcing
D) Predictive marketing
E) Profiling
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
17
68) Rich media advertisements are a sales-oriented marketing format.
AACSB: Analytical Thinking
LO: 10.3: How has e-commerce transformed marketing?
69) Web personalization is used primarily as a marketing tool.
AACSB: Analytical Thinking
LO: 10.3: How has e-commerce transformed marketing?
70) Behavioral targeting occurs at two levels: individual websites and through ISPs.
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
71) Viral marketing is like traditional word-of-mouth marketing except that it is spread via
online communities.
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
72) The behavioral targeting of ads results in consumers responding ten times more frequently
than when delivered ads randomly.
AACSB: Application of Knowledge
LO: 10.3: How has e-commerce transformed marketing?
18
73) What is the most profound way in which e-commerce and the Internet has changed the
relationship between companies and their customers? Support your answer.
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.3: How has e-commerce transformed marketing?
74) Website tracking software can log the path a customer takes through the website, the time
spent on the site, and what geographic area, in general, the customer is from, all of which can
help in customer analysis. It can also log the customer's operating system and which browser the
customer is using. How could these last two data items be of interest to a company? Give
examples.
AACSB: Application of Knowledge; Written and Oral Communication
LO: 10.3: How has e-commerce transformed marketing?
