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.

So, 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.”

Keeping 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 sector.”

Goolsbee 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 prices.