When Goolsbee returns,
he starts by asking the students to call out other commodities
besides books that could be sold on-line. He jots their answers
on the board: CDs, computers, software, toys, stocks, magazines,
groceries, pets. “Pets?” Goolsbee asks with a puzzled expression.
“Yeah, you can buy fish on-line,” explains one student to laughter.
“OK, then, maybe fish,” says Goolsbee, adding that particular
pet to the list, along with flowers, movie videos, and clothes.
given all the possibilities, Goolsbee challenges, “Why books?
Let us have it.” A male student suggests that books don’t necessarily
have to be viewed firsthand to be purchased; Goolsbee starts a
list on the chalkboard by writing “experience.” Other students,
most sitting behind official GSB placards with their names printed
on them, throw out “diversity of product” and “repeat purchases.”
But Goolsbee keeps pushing, noting that “a lot of stuff has that
same feature of repeat purchases. None of these things are specific
to books. What are some qualities specific to books?” Finally,
Goolsbee runs with a comment about how the logistics of bookselling
are fairly easy. “What is it about the structure of this industry?”
asks Goolsbee. “What about the distributors? You’ve got one big
distributor and many sellers of books. It’s not like toys, where
there are just a couple of major sellers.”
these considerations in mind, Goolsbee asks those who would sell
books over the Internet to raise their hands, and then for those
who would sell something else to raise their hands. The vote favors
something else. “What else would you rather sell?” he asks. “Stocks,”
call out several students. He gives them a chance to see how stocks
and other products have fared on the Internet by projecting a
transparency showing results of their 1999 on-line retail sales.
Stocks turn out to be one of the top on-line sellers. The why
will come later. “That’s a substantial sector on the Internet,”
says Goolsbee. “We’ll spend a fair amount of time on the financial-services
wraps up with a general outline of the course. After reviewing
e-commerce strategic theories and walking through a number of
case studies of various sectors of the Internet economy, including
retail, finance, and media, he says, students should be able to
evaluate the potential of a company’s e-commerce proposal. Next
week’s homework assignment is to bring in an example of an on-line
merchant who sells equivalent things to different people at different