risks and revenues virtual business copyright © texas education agency, 2012. all rights reserved

Risks and RevenuesVirtual Business

Copyright © Texas Education Agency, 2012. All rights reserved

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Copyright © Texas Education Agency, 2012. All rights reserved2

What are the Risks of a Virtual Business?

• Business will lose money• Debt• Have to start over• Damage to reputation

3Copyright © Texas Education Agency, 2012. All rights reserved

Risk Analysis – External Threats

Malware Denial of service attack

Malicious hackers Online fraud


Malware• Viruses – A program that attaches itself to other

programs and reproduces.• Worms – Replicate themselves and spreads to

other computers on a network.• Trojans – Performs unwanted activities on your

computer but does not replicate itself.• Adware – Unwanted ads.• Spyware – Tracks your personal information and

sends it to the originator of the program.


Denial of Service Attack

• Designed to overload a server• Deliberate action that can result in a computer

or a network being shut down• Web sites can also be temporarily shut down


Malicious Hacker

• Someone who bypasses security to gain access to a computer or network

• Can access secure information


Online Fraud• Phishing– Emails recommending that you update

information for certain accounts– Personal information is captured

• Pharming–When an email directs you to a link which is

actually bogus – Links to a site that looks just like a legitimate

site• Scams designed to obtain your credit card

information8


Risk Analysis – Internal Threats

Human error• Accidentally

deleting information

System failures

Malicious intent• Dishonest

employees


Safeguards

• Change passwords regularly• Back up information often and regularly• Perform system maintenance• Conduct software updates–Automatic update feature

• Block traffic from suspicious IP addresses• Shut down your computers daily


Combating Crime

• Electronic forensics– Tracks computer

criminals• Secured Sockets Layer

(SSL)– Signals you are

entering a secure area of a site

• Require a card code (on the back of a card)

• Computer security software

• Limiting use of a site’s documents

• Firewall– Protects your

network


Rewards of a Virtual Business

• Revenue• Self satisfaction• Customer satisfaction• Good reputation in the business community


Business Models that Generate Revenue

• Broker– Brings buyers and sellers together – Airline and travel sites

• Advertising– Classifieds– Portals, such as search engines

• Merchant– E-tailers strictly selling on Internet– Mail order with catalogs, online and in print


More Revenue Models• Manufacturer– Direct selling from the product manufacturer– Certain computer brands

• Affiliate– Do not sell directly but are included on other sites– Sponsorship– “Hits” to the site– Ad results– Click to Pay– Banner ads


More Revenue Models (continued)• Community– Social networking sites

• Subscription– Internet Service Providers– Free content in addition to “subscription” content

such as video rentals or family and friends search tool• Complementary sites– Sites that sell complementary products and services

• Trade and industry organizations– Links from organization’s site, to which

you belong, to your site15


Independent Practice Assignments• Risk/Reward Diagram Assignment #1 – Create a diagram analyzing

the risks and rewards for a number of different situations. For example, the risks/rewards for taking a certain job, getting accepted to a certain college, or lowering the price you charge for a product. Students should show five situations and list a risk and reward for each. They will put them in order from least risky to most risky. The risks and rewards should not be duplicated for any of the situations.

• Gift Shop Web Site Proposal Assignment #2 – Students have been approached to create a web site for a local gift shop that also sells gift baskets for special occasions. They would like to increase revenues for their gift baskets. You are not the only one who has been approached so you must write a proposal that explains the type of revenue model you would use for the site. You must also include recommendations for security measures that should be included on the site.


Independent Practice Assignments(continued)• Web Site Cost Research Document Assignment #3 – Because

rewards are usually associated with some type of cost, it is important to understand that businesses pay a cost for advertising which generates revenue for the business. Students will prepare a document of their choosing that details at least five different costs associated with having a business web site. These can include prices for different types and sizes of ads, hosting fees for your web site, registering your domain name, intangible costs of creating your site, or any other costs that students can think of.


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