E-Commerce: Is it for Real? and Who’s Buying?

Internet Shopping: Brave New World

Web Bash

The Scam What Am

High-Tech Higher Ed

New Jersey CAMA

">Computer-Phobic?

The Year 2000

Seeking an Angel

Amazing Minds

">In the Running:

Corrections or additions?

These stories by Phyllis Maguire and Barbara Fox were published in

U.S. 1 Newspaper on May 27, 1998. All rights reserved.

Survival Guide

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E-Commerce: Is it for Real? and Who’s Buying?

Last year online sales topped $2 billion, and while

some experts expect that figure to double in 1998, others think it

just might triple. Although only 7 percent of the American population

has purchased items online, the Internet is transforming the ways

in which we shop. Here is the conclusion reached in "Internet

Shopping: An Ernst & Young Report," a survey of more than 850

consumers and 150 retailers and manufacturers

(http://www.ey.com/consumer/shopping):

"Slowly but surely, the Internet is changing consumer shopping

patterns."

So who IS buying online? According to the report, he — and it

is a "he" 68 percent of the time — is well-educated, with

26 percent of online purchasers holding post graduate degrees. He

is well-paid; over half earn between $50,000 and $100,000. And he

is middle-aged: 64 percent of online buyers are between the ages of

40 and 64, an avid moviegoer who enjoys gardening, travel, and gourmet

cooking. He uses the Internet to purchase computer-related products

(they account for 40 percent of all online sales), books, travel

accommodations,

clothing, music, subscriptions, and investments.

He appreciates the Internet for its convenience, and is more likely

than average consumers to shop in nontraditional channels, via mail

order or telephone. And although he is likely to buy only two to four

online items every year, he has helped transform the Web into a

powerful

retail tool. Two-thirds of surveyed consumers use the Web to research

products they go on to buy in retail stores; almost half do product

research on the Web before ordering an item by telephone or fax, while

32 percent combine Web research with an online buy.

The decisive factor in sealing a sale? It’s name recognition:

"Brand

name and retailer familiarity exert the most impact on Web buying

decisions."

Here are some Ernst & Young E-commerce tips:

Gear your product line to the interests of the online

audience.

Target more marketing to women who use the Web to buy

apparel and magazine subscriptions.

Use search functions to narrow product choices. Because

online research is such a powerful incentive to in-store sales,

"equip

sites to aid research and emphasize product value."

Offer "community" through content, links to other

sites, and chat rooms.

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Internet Shopping: Brave New World

According to "Internet Shopping," 68 percent

of people who do NOT buy online are leery of putting their credit

card information out over the Web. The Internet marketing bonanza

has business practices and legal protocols scurrying to catch up to

technological advances.

Richard L. Ravin, a partner with the Roseland law firm of Ravin,

Sarasohn, Cook, Baumgarten, Tisch & Rosen, is the publisher of the

"Internet Business Law Alert." He outlines four hurdles that

must be overcome before E-commerce will match its explosive potential:

Speed and connectivity. Internet transmissions are still

unreliable, cobbled as they are from a snarl of LAN lines, phone

routes,

and tiers of glitch-filled, crash-prone servers. Until the

infrastructure

becomes more direct and foolproof, Ravin says, "people can’t rely

on the Internet as a major delivery route for products."

Digital signatures, which are essential for

business-to-business

transactions. While California and Utah have laws recognizing

electronic

signatures, the business communities in most states still are in a

no-man’s land with digital contracts. The state of the art in digital

signatures is asymmetrical encryption, a software program that

generates

both a public key to send an encrypted message and a private key to

decode it. Says Ravin: "The technology is there, but it needs

to be standardized and universal."

Cyber notaries, or the lack thereof. E-commerce needs

some way of authenticating that messages have been sent and received

— and someone to serve as a depository for electronic documents.

"You can negotiate a contract back and forth, but if there is

no third party with whom the document gets filed, what’s to stop

someone

from tampering with your final draft? Without digital signatures and

cyber notaries, courts will not enforce electronic contracts."

Secure, reliable methods of electronic payments. Banks

and credit card companies are now hammering out Secured Electronic

Transaction (SET) protocols and Electronic Negotiable Instruments

to permit funds to be wired directly.

While these wrinkles are getting ironed out, online merchants must

navigate a brave new world of established laws with startling new

applications. Intellectual property laws, governing trademarks, trade

secrets, patents, and copyrights, are in play; constitutional issues

of privacy and freedom of the press are raised; and commercial and

contract laws concerning enforceability are crucial, as is tort law

on defamation and misappropriation of business assets. Ravin’s

suggestions

for posting an online site:

Execute a written agreement with any outside website

designer

to specifically address issues of site ownership and licensing.

Conduct a federal trademark search and registration; don’t

develop a trademark only to find that you’re infringing on someone

else’s.

Restrict access to any trade secrets to persons having a

"need to know."

Use passwords and key codes, and encrypt any sensitive data.

Require employees and outside consultants to sign

confidentiality

agreements.

And Ravin urges anyone doing business on the Web to think about

the year 2000. "Businesses are expecting the Microsofts of the

world to come up with a magic bullet that can be fired into computer

systems, but experts say that solution isn’t forthcoming." To

receive a copy of "Internet Business Law Alert," call

973-228-9600

or E-mail rravin@ravinpc.attmail.com.

— Phyllis Maguire

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Web Bash

If this issue of U.S. 1 doesn’t quench your thirst for

the Internet and related matters, then head Thursday, June 4, to the

"New Jersey Works the Web" trade show, networking party, and

seminar event from 3 to 9 p.m. at the PNC Bank Arts Center, Holmdel.

Billed as a three-ring circus by its host, New Jersey WebGuide

(http://www.webguide.com),

the event will showcase booths from 35 different New Jersey companies

designing for or providing services on the Internet. Seminars include

"The ABCs of Putting Your Business Online," "Effective

Website Marketing and Building Traffic," "Using the Internet

for Corporate Recruiting and Job Searches," "Legal Issues

on the Internet," and "Internet Commerce."

The Internet Commerce workshop is being conducted by Toon Six,

president of International Customers Solutions Inc. in Danville

(973-366-5355, toonsix@intercs.com). Six says the era of widespread

E-commerce is here, thanks to increased payment security: "Sending

your credit card information over the Web is safer than giving it

to a storekeeper or restaurant." He offers these tips for

successful

commercial sites:

Heighten customer interactivity. Make your customers’

browsing or search experience an interactive one by asking online

questions about product preferences or budget limitations. Not only

will you guide them to specific services, you’ll build your own

database

and provide a sense of personal attention.

Establish customer and technical support. If you’re

selling

any complex product or service, like a software program, you’ll need

a caller center where agents can interface with customers and send

e-mail to them directly. "Immediacy is a requirement," Six

says of E-commerce. "Fifty percent of all calls to a call center

need real time or instant response."

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The Scam What Am

Promoters of bogus business opportunities are using

the cachet of the Internet to lure unsuspecting consumers. According

to the Federal Trade Commission, the same types of fraud that have

floated through the mail and over phone lines have turned high-tech.

Beware of pitches promising big bucks selling Internet-related

products

or services; when compensation is based on recruitment, instead of

product sales, the deal could be a pyramid scheme, not a marketing

plan. Avoid any sales offers for kiosks that provide Internet access

for a fee. The "profitable locations" you are promised tend

to be pizza parlors rather than shopping malls or upscale hotels.

And don’t believe claims that money can be made on the Web by people

with no Internet experience. Scams particularly target those who

aren’t

technologically savvy. Check out any business opportunity with the

New Jersey Division of Consumer Affairs, 973-504-6200 or 800-242-5846.

Another online opportunity to approach cautiously is the cyber

auction.

Like live auctions, the highest online bidder wins, but that’s where

the similarity ends. Online auction houses don’t actually have the

merchandise being sold, so the buyer must deal directly with the

seller

to complete the deal. Beware of sellers who want payment by certified

check or money order; try to pay by credit card or COD instead.

For a copy of the FTC’s "Net-Based Business Opportunities: Are

Some Flop-portunities?" or "Online Auctions: Going, Going,

Gone," call 202-326-2222. Or check out the website:

http://www.ftc.gov.

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High-Tech Higher Ed

Those conning the computer illiterate will steer clear

of the more than 8,000 undergraduate and graduate students at the

New Jersey Institute of Technology in Newark’s University Heights.

One of the state’s three public research universities — along

with Rutgers and the University of Medicine and Dentistry of New

Jersey

— NJIT recently placed second in the annual ranking of "Yahoo!

Internet Life" magazine of America’s 100 most wired colleges,

beating out M.I.T. and bested only by Dartmouth.

NJIT president Saul K. Fenster speaks at the Princeton Chamber

of Commerce lunch Thursday, June 4, at noon at the Forrestal. For

$28 reservations call 609-520-1776.

Prior to joining NJIT in 1978, Fenster served in various faculty and

administrative capacities at Fairleigh Dickinson University. A

mechanical

engineer, he earned an undergraduate degree from City College of New

York, a masters’ from Columbia University, and a Ph.D. from the

University

of Michigan.

Fenster’s June 4 topic will be "New Jersey Higher Education —

Leading the Way in High Technology." He sees the same changes

that have transformed business affecting higher education.

"Information

technology is changing the very nature of the educational

process,"

he says. "The lexicon of higher education already embraces such

concepts as marketing, price competition, benchmarking, outcomes

measurements,

and economic development. With a cultural convergence taking place

between higher education and business, the question becomes: will

we be reluctant or willing participants in shaping change?"

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New Jersey CAMA

The New Jersey Communications Advertising Marketing

Association (NJ CAMA) presents its annual New Technology Day on

Tuesday,

June 9, starting with an 8:15 a.m. breakfast buffet and ending at

noon at the Forrestal, College Road East. Cost: $50. Call

609-890-9207.

Featuring new media guest speakers and selected exhibitors, the

conference

will address Internet commerce and security, online media buying and

development, and E-marketing and website design. Stephanie Ardito

of Ardito Information & Research Inc. will speak on finding

information

on the Web; Gary Wien

of the Early Edition/FindNJ.com will

discuss

using the Internet for visibility and cost effective advertising,

and Bonnie Schwartz

of BizTravel.com will discuss E-commerce,

with strategies of how to build brands online.

"The most important elements to building a brand online are

establishing

a product relevancy and a target audience," says Schwartz, senior

vice president of the firm. "You must be able to speak to that

audience in both online and offline ways, using a variety of media

— direct marketing, traditional advertising, and new media —

to build familiarity."

This organization also solicits advertisers for its membership

directory.

Costs range from $50 for a business card or quarter page ad to a full

page at $100. Camera-ready ads must be mailed no later than May 29.

Call Susan Tibbetts at the Red Flannel Design Group at Princeton

Meadows Office Center, 609-275-4501, for information.

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Computer-Phobic?

Getting Wired

If you can’t quite stomach the prospect of E-commerce,

try "Eliminating Your Fear of Your Computer" at next month’s

Business Over Breakfast meeting, sponsored by the Middlesex County

Regional Chamber of Commerce at the Ramada Inn in East Brunswick,

Wednesday, June 10, at 8 a.m. For $25 reservations call 732-821-1700.

Four panelists will each take one facet of the computer’s domain —

hardware, software, consulting, and the Internet — and make it

more palatable.

Jeff Clark, a partner with NetCounty Communications, a website

designer and host in East Brunswick, will discuss the Internet.

"There

still aren’t many small to medium-sized companies that use the

Internet

for commerce," Clark says. "But they need Internet presence

just for credibility. Customers use the Web for informational

purposes,

checking out what services a company offers without having to deal

with a salesperson. Companies without a site are being screened out

by prospective customers."

Nancy Ostin, Chamber of Commerce executive director, says 44

percent of businesses in Middlesex County have fewer than 50

employees,

and that small businesses in particular struggle to secure a site.

"They don’t have MIS departments to manage Internet access,"

says Ostin. "Small businessowners are so busy running a company

they can’t research different providers or shop around for the best

price."

Too often, she says, small businesses adopt an `all or nothing’

attitude

to the Internet; if they can’t create a monster site, they’ll forego

one entirely. "We’re hoping the Business for Breakfast

presentation"

— which draws up to 50 attendees — "will convince them

some presence is better for their business than none at all."

The Middlesex Chamber of Commerce is itself getting wired, its site

at http://www.mcrcc.org is scheduled to launch July 1. The

homepage

will offer business information, like classifieds and a members’

bulletin

board, as well as a solution to the small businessperson’s Internet

dilemma: homepage space available to members and hot links to their

business sites.

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The Year 2000

Year 2000 issues will be centerstage at the "New

Jersey & Year 2000: Perfect Together?" conference being held at

the Hilton in East Brunswick, June 11, starting at 8 a.m. Hosted by

Carnegie Center-based Technology New Jersey Inc., the conference will

bring together business and government heavyhitters from around the

state. Irene Dec, vice president of Prudential Insurance, will

kick off the conference with a keynote address entitled "Year

2000 Global Business Impacts," the first of 10 presentations held

throughout the day.

Topics will focus on the economic and legal implications of the

impending

date change, and will include "Year 2000…Are We Already Too

Late?" and "Year 2000 + Small Business = Big Losses?"

Speakers include representatives from the governor’s office and the

state Office of Telecommunications and Information Systems, PSE&G,

Bellcore, IBM, Merrill Lynch, and the NJ Small Business Development

Center. For more information, visit http://www.technologynj.org.

For registration at $100, call 609-419-4444.

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Seeking an Angel

Learn how to find your "angel" at the New Jersey

Entrepreneurial Network on Wednesday, June 3, at noon at the

Forrestal.

Call 609-279-0010 for $30 reservations.

John May of New Century Partners, based in Vienna, Virginia,

and Lennart Haggard of Philadelphia-based American Maple Leaf

Financial Corporation share a panel entitled "Touched by an Angel

— finding the Right Private Investor."

The "guest angels" will answer these questions:

Why seek private investment?

How does a company find private investors? What role is

played by groups like the Pennsylvania Private Investment Group and

the Private Investors Network in Washington, D.C.?

What are the basic screening criteria for private

investors.

They will present case studies of a successful private

investment,

and each will be joined by an entrepreneur who has received an angel

investment.

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Amazing Minds

Universities are giving out more than diplomas in the

coming week. Two upcoming seminars offer top-notch speakers and are

absolutely free: the "Amazing Human Mind" conference on

Friday,

May 29, at 4:30 p.m. at Princeton University’s Richardson Auditorium,

and a New Jersey/Israel biotechnology conference on Wednesday and

Thursday, June 3 and 4, at 9 a.m., at a Rutgers center at 679 Hoes

Lane, Piscataway.

"Biotechnology Prospects: a New Jersey/Israel Meeting," is

sponsored by the New Jersey Commission on Science and Technology along

with the Rutgers Center for Advanced Biotechnology and Medicine, the

New Jersey Center for Biomaterials and Medical Devices, and the

Biotechnology

Center for Agriculture and the Environment. For free registration,

call 732-235-5310.

Speakers include professors from Rutgers, Hebrew University, Tel Aviv

University, Ben-Gurion University, Weizmann Institute, and Technion.

Among the topics to be discussed are combinatorial approaches beyond

pharmaceuticals, value of point-of-care rapid diagnosis, using living

cells as biosensors, tailoring biomedical polymer surfaces, and use

of plant roots for environmental remediation and biochemical

manufacturing.

One of the series of Reunions weekend lectures, the May 29 event at

Princeton University features seven presentations of cutting-edge

information exploring principal aspects of the human mind. It will

be followed by open audience comment and discussion.

Thomas W. Lanfitt, neuroscientist, senior fellow at Wharton,

and author will be moderator. Presenters include Lee M. Silver,

Princeton professor of molecular biology and author; Jonathan D.

Cohen, Princeton psychology professor; Clarence E. Schutt,

Princeton chemistry professor; Patricia S. Churchland,

philosophy

professor, University of California at San Diego and author; and

John

J. Hopfiled, Princeton molecular biology professor.

Also Leslie A. Brothers, psychiatry professor, University of

California at Los Angeles School of Medicine; and Dennis J.

Selkoe,

neurology and neuroscience professor, Harvard Medical School. The

Princeton University seminar is sponsored by the Class of 1943 and

is free. Call 609-258-5748 for information.

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In the Running:

ALK & Caliper

Two entrepreneurial businesses in Princeton — ALK

Associates and Caliper Human Strategies — are represented among

the finalists for the Entrepreneur of the Year awards, to be announced

at a dinner on Thursday, June 25, at 5:30 p.m., at the Brunswick

Hilton.

For $110 tickets call 201-836-2485.

Alain and Katherine Kornhauser of ALK Associates on Herrontown

Road and Herbert M. Greenberg of Caliper on Mount Lucas are

among the two dozen statewide finalists. Founded in 1961 the

125-person

Caliper Inc. does employment and management tests and team building

training. Founded in 1979, the 100-employee ALK Associates develops

decision support systems for the transportation and logistics

industries

and also develops computer mapping and navigation software for

consumer

and commercial applications.

The contest program’s independent panel of judges bases its selection

on innovation, creativity, leadership, and a strong corporate culture

that motivates and supports employees. The judges include one of last

year’s winners, Martin Levine, president and CEO of MarketSource

Corporation. Other judges from this area were Caren Franzini,

executive

director, NJEDA, and James Millar, partner of Early Stage

Enterprises.

The Ernst & Young Entrepreneur of the Year Award has been recognizing

success stories for 12 years and is considered to be the highest honor

an American entrepreneur can receive. Area sponsors of the award

program

are Building America Television, Chase Manhattan Bank, and Lowenstein

Sandler while national sponsors are USA Today, the Ewing Marion

Kauffman

Foundation, and NASDAQ.

Greenberg is an original founder of Caliper, which has offices in

eight countries. It has assessed the personality qualities of more

than one million individuals and has consulted with more than 23,000

companies on hiring and firing decisions. Among its clients are Avis,

Borg-Warner, Canada Life, City of Stockholm, Holland Chemical, the

Los Angeles Lakers, the New York Mets, Waste Management, and Yale

Europe.

Greenberg is expanding into three entrepreneurial areas: individual

career coaching, training and development for team performance, and

organizational development to help groups align their people with

their visions. He recently bought a Continental Basketball Association

team for New Jersey, to play in the arena being constructed in

Trenton.

Alain and Katherine Kornhauser co-founded their firm;

Alain is also a professor of civil engineering at Princeton University

and director of the university’s transportation program.

The first of ALK Associates’ three divisions, the TravRoute division,

creates mapping and GPS-linked in-car navigation systems for consumers

and "mobile professionals" such as outside salespersons,

repair

personnel, and delivery staff. Its products received "Best of

Showcase" in the Mobile Electronics/Mobile Office category at

the 1998 International Consumer Electronics Show.

The PC*MILER division provides a wide range of routing, mileage, and

mapping software including customized routing preferences, fuel tax

programs, and other fleet optimization software tools for the trucking

and rail industries. It was recently chosen as the U.S. Department

of Defense’s official worldwide distance guide and is being used by

more than 10,000 global companies.


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