The spread of e-business dates back late 1990s (the term itself was first coined in one of the IBM's accounts in 1997) has marked a new era in trade and service. Most often e-commerce is defined as a buying or selling process supported by electronic means in the electronic marketplace most conventionally via the Internet. For example, Tassabehji (2003) defines e-business as 'the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners' (p.5); Choi (1997) proposes the following definition: "the ability to perform transactions involving the exchange of goods or services between two or more parties using electronic tools and techniques" (p. 11). However, despite certain variations these and other available definitions emphasise the opportunities the commercial usage the Internet offers to the businesses in dealing with their external environment.
Nowadays, large transnational businesses, major domestic enterprises, and increasing numbers of small companies highlight development of electronic business and transactions opportunities as their key priority (Chaffey et al. 2006). The impact of recent Internet developments on businesses is huge and mostly positive. Given the steady ongoing development of e-commerce and electronic transactions one may reasonably conclude that electronic methods of doing business have no drawbacks or that the advantages far overweigh the drawbacks. However, there are several factors that make many experts express much less enthusiasm about the statement that the Internet has created the perfect flawless market. The below overview of the advantages and challenges involved in electronic commerce represents an attempt to understand the range of issues related to using the Internet for business.
The Internet offers a wide range of opportunities for marketing products and services across the purchase cycle:
An advertising medium: use of large-format displays or advertisements on media sites to create awareness of various brands and products.
A direct response medium: use of sponsored links to generate sales.
A platform for sales transactions: selling products and services online.
A powerful distribution channel.
A customer service mechanism: the Internet allows the customers easily find the response to almost any question even without participation of the customer service.
A relationship building medium: an instrument of interaction with the customers which enables the company to better understand the needs and requirements of their target audience (Chaffey et al. 2006, p.5).
These opportunities translate to several essential advantages the Internet has over traditional forms of doing business being almost free from many limitations associated with the traditional forms of commerce. The benefits provided by e-commerce can be grouped into several classes according to the following criteria: easiness and comfort for the customer (1); possibility of extra savings (2); existent friendly customer service (3); special business solutions and commercial