Review 2007: Internet and e-commerce
A look back at the top stories about the web and business from Computing
The web is central to business success
Can you still remember a time when people said, "That internet thing, it's just a passing fad..." ? The web is now as much a part of doing business as the telephone - and a lot more strategic.
The online world is changing the way we live and work every day. We look back at the top stories on internet and e-commerce issues from 2007.
Click on the headlines to read the full story.
January
Personal details are being revealed online
The results of a survey of PC users show that 45 per cent of what we do online requires us to disclose personal or financial data.
The survey, by vendor Kaspersky Lab, shows that despite the increase in backdoor Trojans, keyloggers and internet scams such as targeted phishing attacks, web users have not been put off going online to conduct their banking, shopping and travel bookings.
The top online activities listed by users that require the disclosure of personal information were: banking (20 per cent of online activity); shopping (15 per cent); and travel booking (10 per cent).
Record online Christmas sales confirmed
Figures published today confirm that online sales reached £7.7bn in the 10 weeks leading up to Christmas, marking a 54 per cent rise compared to last year.
IMRG reports that online sales exceeded all expectations, with sales of close to a billion pounds a week during the first three weeks of December.
British consumers spent more than £3bn online in November, and £3.6bn in December.
William Hill bets on next-generation IT
William Hill is to migrate its web site to a recently-installed next-generation IT infrastructure to improve its online betting services and offer new products.
The bookmaker has replaced legacy systems with a new infrastructure operating on HP-UX servers, an Oracle database, BEA Weblogic and Java.
IT director Victor Kemeny says the firm will start a phased migration, to be completed in the next 12 months, to ensure customers are not inconvenienced.
February
Hackers overwhelm internet servers in huge attack
Hackers briefly overwhelmed at least three of the 13 computers that help manage global computer traffic yesterday in one of the most significant hacking attacks since 2002.
Experts said the attack lasted as long as 12 hours but passed largely unnoticed by most computer users. Computer scientists worldwide raced to cope with enormous volumes of data that threatened to saturate some of the Internet's most vital servers.
Online businesses need to build customer confidence
The UK’s online economy is in danger of stagnating if businesses do not build more confidence in their customers, according to research released today by vendor Symantec.
The survey, carried out among 2,500 UK adults, says despite three-quarters of the population shopping and banking online, many are looking for additional reassurances from online retailers before spending more.
The study shows 66 per cent of consumers believe that making transactions online puts them at increased risk of online fraud, and 30 per cent agree that internet security threats prevent them from making more online transactions.
UK online sales continue to soar
Online sales will make up 15 per cent of all UK retail sales by the end of 2007, worth up to £40bn, according to the Centre for Economics and Business Research (CEBR).
The research, conducted on behalf of price comparison web site uSwitch, also predicts that internet sales will make up 40 per cent of all purchases by 2020.
This is a rise from just two per cent of total retail spend in 2002 and has been driven by online sales of products such as music, films and holidays.
March
CBI calls for greater focus on web security
Employers’ body the CBI is calling for a national strategy to clarify where responsibility for internet security lies.
There are few clear regulations governing online retailers’ liability in protecting their
customers from attacks such as phishing and identity theft.How far businesses could or should take responsibility forcustomers’ security problems is still an open question.
But apportioning blame for security issues needs to be done carefully, and an overarching strategy would be more effective than prescriptive regulations, CBI head of e-business Jeremy Beale told the House of Lords Science and Technology Sub-Committee last week.
Online banking fraud rises sharply
Online banking fraud losses have increased 44 per cent from £23.2m in 2005 to £33.5m in 2006 according to figures released by banking body Apacs today.
Total card fraud losses fell by three per cent in the past year to £428m – a decrease of nearly £80m over the past two years. This fall has been driven by a 13 per cent decrease in UK domestic fraud and the combined reduction of more than £45m in mail non-receipt and lost and stolen fraud.
Berners-Lee warns of changes ahead
Businesses must adapt to the rapid evolution of the internet if they are to remain competitive, says Sir Tim Berners-Lee, creator of the world wide web.
Berners-Lee told Computing that the internet is no longer just a technolog ical tool and is developing into a social phenomenon that presents new challenges to businesses.
It will require IT directors to develop expertise in such varied fields as economics, sociology and psychology to maximise their success online.
With large volumes of information created daily, global internet retailer Amazon.com needs an infrastructure and systems in place capable of storing and analysing extremely large volumes of data.
Given the company’s growth and increasing analytical sophistication, Amazon anticipated that inherent limitations in its deep analysis clickstream database system could prevent scaling this part of its information warehouse environment.
It decided to replace its Oracle clickstream database with a Netezza Performance Server (NPS) system that now houses more than 25 terabytes of clickstream and other transactional data.
April
National Archives stores history online
The National Archives has developed a digital directory to record details of projects funded by the Local Heritage Initiative (LHI), to preserve England’s history.
The digital directory is a permanent online record of more than 1,400 LHI projects that can be accessed through the National Digital Archive of Datasets.
The completed directory holds 1,000 documents, 8,000 images, 200 video files and 100 audio files from LHI projects over the past seven years.
Barclays to tighten online banking security
Over half a million Barclays bank customers will be the first UK banking customers to be issued with handheld chip-and-PIN readers later this year to improve online security and combat identity theft.
The bank will provide standalone calculator-size two-factor authentication card readers to customers transacting online with third parties.
The bank will supply card readers to half a million of its two million online banking customers.
Public warms to e-voting
With the UK local elections set to take place on 3 May, 46 per cent of citizens say that e-voting would make them more likely to vote, according to a study from ntl:Telewest Business.
The younger generation is more in favour of e-voting with 57 per cent of 18-34 year olds saying it would make them more likely to vote while only a third (36 per cent) of over 55’s agreed with them.
This year, Whitehall has announced that 13 local authorities will trial alternative voting methods including internet voting, telephone voting and central polling stations for the electorate to vote from outside their local polling districts. This builds upon UK e-voting trials which have been happening since 2003.
May
Huge online potential remains, says Google
The business opportunities of the internet are still wide open for companies vying to become top global brands, says Google’s head of European operations.
Online consumer preferences are not yet fixed and the next 10 years will see significant upheaval in traditional business sectors, Nikesh Arora told the Institute of Directors (IoD) annual convention at the Royal Albert Hall in London last week.
Microsoft reaches a turning point online
Recent rumours of a Microsoft takeover approach to internet giant Yahoo may be fading, but the fact that the software supplier would even consider such a deal highlights its desire to reposition itself online.
The fierce competition in the web-based services market, in which Microsoft and Yahoo is merely the latest headline, shows how far the online world is still in flux and how dominance is still up for grabs.
Digital divide is narrowing in the UK
The geographic and age-related digital divide in the UK is disappearing, according to new figures from communications watchdog Ofcom.
The gap between the highest and lowest broadband-using countries has narrowed to just three percentage points from 12 points last year. Adoption of high-speed internet communications is highest in England at 45 per cent, with Scotland, Wales and Northern Ireland all at 42 per cent. Last year Wales and Northern Ireland trailed with 24 and 25 per cent respectively, to England’s 36 per cent, with 31 per cent takeup in Scotland.
Online sales comfort Mothercare
Strong online sales have helped offset what could have been a disappointing year for high street giant Mothercare.
The retailer reported a rise of 17 per cent in online revenue and sales at stores where customers can order via the net grew 21 per cent. But overall growth was just 1.6 per cent.
Sales from the internet and web-enabled stores accounted for £47.8m and has significant potential growth for the company
Google's DoubleClick deal comes under scrutiny
US regulators are scrutinising Google's purchase of internet advertising giant DoubleClick following claims the deal threatens the privacy of internet users.
The Federal Trade Commission (FTC) has opened a preliminary antitrust investigation into the $3.1bn (£1.56bn) takeover, announced in April, amid fears the company would have too much control over the internet advertising market.
Tesco wants to use next-generation internet technology to replicate the community feel of a local supermarket in cyberspace.
By exploiting new capabilities such as social networking, interactive feedback and user-generated content, Tesco.com hopes to retain its position as the second most popular UK retail site and steal a march on traditional rivals.
Retailers set growing store by the online customer
Tesco.com’s decision to invest in next-generation Web 2.0 technology underlines the growing importance of online sales to traditional retailers.
Web shopping is now growing at its fastest rate since the dot com bubble burst. Growth is almost 13 times faster than in the overall retail sector. UK sales were up 33 per cent to £11bn last year, and are expected to triple again to £28bn in the next five years, according to the latest study by retail analyst Verdict Research.
June
Lack of commitment from local authorities is slowing the progress of electronic government, despite citizens' appetite for online services, according to council IT user group Socitm.
Organisations that are leading the way in electronic service delivery are seeing significant take-up from local residents, says the report, Better marketed: achieving success with take-up of online services, published last week.
Online sales drive growth at Argos
Retailer Argos has seen its online sales grow almost six times more than shop-based transactions in the first quarter of 2007, and such business now representing 18 per cent of overall business.
Home Retail Group, which owns both Argos and Homebase, says total sales increased by 4.5 per cent for the quarter while internet orders grew 29 per cent, half of which were reserved for in-store collection.
Online retailers fail customer service needs
Online retailers must improve their customer service if they are to reap the rewards of the growing e-commerce market which is set to reach more than £60bn by 2012.
An independent survey found that 45 per cent of retailers failed to reply to customer emails and only 47 per cent of those that did provided accurate information.
Online retailers must keep evolving
Fears that online shopping may have peaked in the US will not be replicated in the UK, say industry experts, but they are warning that businesses may have to adapt to the next generation of internet retailing.
The growth rate of e-commerce in the US is rapidly diminishing, according to figures from analyst Forrester Research, down from 25 per cent last year to 18 per cent this year.
July
Investment in web startups increases
European internet startup companies have attracted twice the level of investment across the second financial quarter of 2007, compared with the equivalent period last year.
According to data from equity research firm Library House, €150m was invested in new European web-based firms, a steep increase from the €51m spent in the first quarter of the year, and the €64m of venture capital supplied in the second quarter of 2006.
Online channel helps HSBC grow
The internet continues to make a major impact on HSBC's business, according to the banking giants' financial results released today.
In the UK, 12 per cent of personal loan applications are now being made online, using an automated system enabling approved loans to be paid into customers’ accounts within minutes.
Internet leads to rise in fraud
Fraud levels in the UK are at record high, with the internet involved in almost all instances of fraud, according to the latest KPMG Fraud Barometer report.
In the first half of 2007, the government and businesses lost £594m to fraud, almost three times the figure recorded for the previous six months.
So-called carousel fraud has been the biggest contributor over the last six months, with four cases alone totalling £440m.
August
Patients book GPs on digital TV
Patients at more than 1,000 GP surgeries across the country can now book doctors’ appointments using digital interactive television or mobile phones.
DigiTV, which is owned and run by Kirklees Council in Yorkshire, was set up to help bridge the digital divide by offering local authority services electronically through any of the major digital TV access channels, including Sky, cable and Freeview.
The internet is the new wild west, say Lords
The internet is a 'wild west' where criminals operate outside the the law and users fear e-crime more than mugging, according to a House of Lords select committee.
And the government's laissez-faire attitude is 'inefficient and unrealistic', says the committee's report on personal internet security, published this morning.
New media technology drives investment in UK IT
Venture capital (VC) investment in UK IT companies saw dramatic growth last year driven by rising adoption of new media technologies.
A 42 per cent growth in investment between 2005 and 2006 was the second largest increase across all sectors, according to a survey by researcher Library House.
The fastest growing sector, with investment up 91 per cent in value from 2005 to 2006, was services and retail.
September
The government is considering creating individual online accounts for citizens accessing public services over the internet.
The proposal is being evaluated as part of wider plans to move Whitehall-wide technology services to major delivery departments, from their current home in the Cabinet Office.
Two-tier internet could damage future growth
A ‘two-tier’ internet where content providers pay a premium to guarantee a speedy web site will damage the future growth of the web, according to search giant Google.
The net neutrality principle - which argues that everyone should have equal access to data on the internet - is the key to ensuring fair competition online, Google director of research Peter Norvig told Computing.
Electronic ticketing is gradually reaching new heights in the airline industry ¬ according to the International Air Transport Association (Iata), as much as 80 per cent of the world’s airline tickets are now electronic.
In 2004, the association set a deadline to achieve 100 per cent global penetration of e-ticketing by the end of 2007.
But the goalposts have recently changed, and at Iata’s annual conference in early June, the deadline was extended by five months to the end of May 2008.
October
Business faces up to social networks
Some of the world’s biggest internet companies are bidding for stakes in social networking site Facebook.
Microsoft is said to be in talks to buy a five per cent share for up to $500m (£250m); Google is expected to join the race; and Yahoo made an unsuccessful $1bn (£500m) proposal last year.
The rush to acquire a piece of the online collaboration site is partly explained by its current success.
Tesco wants to link web and high street
Tesco.com sales increased 35 per cent to £748m in the first half of the year.
Profits were also up by 62 per cent to £55m, confirming the site’s position as the UK’s second most popular online retail destination.
A key element of the firm’s strategy is to create strong links between its internet and store services, according to head of marketing Kendra Banks.
STA Travel uses Web 2.0 for less corporate feel
STA Travel is using Web 2.0 and social networking technology to attract more customers to its web site and sell more products online.
More than 80 per cent of customers begin their dealings with the travel agency on the internet, so the firm’s web site is a crucial component of its marketing strategy.
The company wanted to create a community feel to the site by offering interactive content, said Craig Hepburn, head of e-commerce strategy.
November
First online health accounts go live
NHS patients will this month have electronic access to their medical data for the first time through the HealthSpace project developed as part of the £12bn health service IT programme.
Using an online account, patients will be able to track details such as blood pressure, manage appointments and access their summary care record, from the national database.
EMI tunes up digital strategy
Global recording company EMI is talking to financial services’ IT departments about how to deal with a tenfold increase in online transactions.
The internet has revolutionised the music industry. CD sales have been dropping steadily for a decade, and digital downloads have shot up by 71 per cent this year alone and are expected to account for more than a third of all European music sales by 2011.
Standard introduced for best practice web sites
The British Standards Institute (BSI) is to develop a benchmark for company web sites.
The standard – known as a publicly-available specification (PAS) - will govern the appearance, usability, and technical standards of web sites, as well as search engine optimisation, the process of trying to influence how high up a search page a web site appears.
Web 2.0 gives power to the people
Next-generation collaboration and social networking tools are helping to break down barriers within businesses, according to Web 2.0 pioneer Jimmy Wales, the creator of online encyclopaedia Wikipedia.
The loosely-defined label of Web 2.0 is most frequently used with reference to web sites that have found success among consumers. Yet many of these technologies are already being used in the corporate sector, said Wales, in an exclusive interview with Computing.
Euro 2008 scores on the net
The 2008 European Football Championship in Austria and Switzerland next summer will be the first major international tournament to be broadcast in its entirety over the internet.
The European Football Association (Uefa) has developed the platform to produce, encrypt and deliver the content to broadcasters and to individual pay-per-view customers across the world.
UK wants spectrum for mobile internet
Two-thirds of UK consumers want spectrum freed up by the digital switchover to be used for mobile broadband and better phone coverage, according to an Ofcom survey.
December
Online sales rise to an all-time high of £130bn
UK web sales rose by 29 per cent to £130bn last year, according to the latest figures from the Office for National Statistics.
The report, published last week, shows significant increases in all kinds of online transactions, including business to consumer and business to business:
Digital inclusion such as ubiquitous broadband access and better web sites could be worth up to €85bn (£60bn) to the European economy over the next five years, according to Brussels.
Ministers from member state governments met in Lisbon this week to check progress towards the target to halve the estimated 200 million people without access to IT-enabled services by 2010.
UK advertisers are spending £33 per head of population on online ads annually, more than twice the combined figure for Italy, France and Germany.
UK web advertising now represents 14 per cent of revenue for the sector, having risen above magazine activity for the first time. More is spent on internet adverts than the combined market for outdoor, cinema and radio advertising.