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Stanford Report, January 5, 2000

With $20 million, new center to focus on e-commerce

The Graduate School of Business, which aims to be the world leader in research on e-commerce, announced last month it is creating the Center for Electronic Business and Commerce with initial funding of $20 million.

The school's dean, Robert Joss, said the center will develop new research and education initiatives needed to understand the impact of information and communication technologies on firms, industries and markets. The center will encourage industry leaders to become involved in the school and its programs and will disseminate research to the business community through seminars and educational programs for executives.

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"The impact of electronic commerce on all aspects of business will be profound," Joss said. "Given our proximity to Silicon Valley -- the heart and origin of these changes -- the top priority for me is that we remain the leading school in the research and teaching of electronic commerce issues. These partnerships with corporate leaders will provide us with the financial resources as well as leadership in ideas to enable us to stay at the forefront."

Joss announced Dec. 13 that the center's three founding partners are e-commerce pioneers Charles Schwab & Co., General Atlantic Partners LLC and eBay. Charles Schwab & Co. provides investor services, including the world's largest online trading operation. General Atlantic Partners LLC, with more than $5 billion in capital under management, focuses exclusively on global information-technology and Internet-enabled businesses, such as and The online auction company eBay, founded in 1995, is the world's largest personal online trading community, currently providing some two million new auctions every day.

Other funders of the center include BP Amoco p.l.c., General Motors, Jeffrey S. Skoll, and Carl and Marilynn Thoma. The school anticipates it will secure further support in a subsequent round of funding.

The codirectors of the center are Garth Saloner, the Robert A. Magowan Professor of Strategic Management and Economics, and Haim Mendelson, the Theodore J. Kreps Professor of Information Systems and Management. Saloner is known for his pioneering work on network effects, which underlie much of the economics of electronic commerce and business. Mendelson is known for his work on the links between electronic business, organizational practices and market structure. He is also coauthor of the recently released book Survival of the Smartest (Wiley, 1999).

"Electronic commerce will affect virtually every company and pervade almost every area of management," Saloner said. "There are opportunities for research in all of our existing disciplines. These funds will enable us to engage in the research that is so necessary for managers to fully understand the breadth and impact of the phenomenon and to quickly diffuse the ideas throughout the curriculum and back out to corporations."

The center will emphasize developing new research and courses in all phases of the curriculum rather than establishing a separate degree in electronic commerce. "We believe that within five years the effects of electronic commerce and electronic business-to-business transactions will be ingrained into all aspects of our curriculum," Saloner said.

The business school is among a small number with a required course on electronic business in the MBA core. The course, "Management in an Information Age," was developed by Mendelson and his colleagues. The school currently has 10 other elective courses that examine electronic business and commerce issues from different perspectives. It is developing a new course, "Electronic Commerce," offered for the first time in winter quarter, that was developed by Saloner and Dean Emeritus Michael Spence. In addition, the course "Evaluating E-Business Opportunities" will be offered for the first time next academic year.

A new executive program focused on electronic commerce will be offered for the first time next fall. New course development already has required researching and writing 15 new cases that will be revised frequently to reflect the rapid changes in the industry.

"To stay at the forefront of this fast-moving, information-rich area, we will focus our research and accelerate the creation and dissemination of knowledge," Mendelson said. "The Internet captures data from customers, users and website visitors in a volume and at a speed never before experienced. The center will provide opportunities for groundbreaking research through the acquisition of unique data sets in this area."

The center will act as a clearinghouse and library for faculty research and e-commerce case studies. In addition, the center will provide support for curriculum development and student activities related to e-commerce. The center will be managed by Executive Director Margot Sutherland. Staff will include case writers, researchers and administrative personnel.

Visit the center's website at SR