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So far, we have concentrated on a linear information value-chain scenario mainly centred on the Internet and on media content. In this chapter we would like to give a broader perspective of what sources of information are available that may be subject to an information value-chain analysis. We also would like to show some of the limitations of the value chain by illustrating a particular type of electronic market, transaction stream markets, that require generalizing the concepts provided above to include situations in which multiple transactions occur simultaneously and in a non-linear form (i.e. in a network).

This chapter analyses two steps of the value chain that have traditionally been considered in isolation; in terms of Figure 1.3 (p. 11), these are: (6) local loop operators (usually local telecommunication companies, ‘Baby Bells’ in the USA), and (5) Internet Access Providers (IAPs). As we will see in the chapter, these two steps are intimately related, not only because IAPs must use a local loop to reach their customers, but also because technological advances in the latter will completely restructure the IAP industry in the next few years

Only someone recently roused from a 25-year sleep can be unaware of the ways that information and communication technologies (ICTs) have reshaped our daily routines. To be sure, in the early 1980s there were telephones, television, newspapers, facsimile machines and even computers capable of calculating pi to hundreds of digits past the decimal point. But local and wide area networks did not exist, there were no online research libraries like Nexus or Lexus from which you could retrieve a magazine article or a law opinion, dot.coms had yet to arrive (and depart), and a global computer network called the World Wide Web hadn’t been devised – or even considered possible. One could not buy or sell anything from anywhere anytime.

Although stages (1) and (2) in Figure 1.3 share much in common, it will be useful to distinguish their different approaches to serving customers by treating each separately. In section 7.1 we will look at content providers (1) and in section 7.2 we will focus on portals (2).

Bandwidth is an expression of the speed at which digitized data can travel over a conductor such as a telephone wire (relatively slow) or a fibre optic cable (relatively fast). We shall define ‘bandwidth’ simply as the maximum amount of data in megabits per second (mbps) that can be sent from computer A to computer B, thereby expressing the capacity of a networked connection. In essence, the more bandwidth there is, the more data that can travel along that connection within a certain period of time. As Table 4.1 shows, some applications require very little bandwidth, others quite a lot.

Strategic management tries to explain how value is created by the firm’s activities and how this value reflects in the firm’s performance. Strategic management as a discipline developed in the 1960s and 1970s. From there, in its short life, the strategic management field has developed many different frameworks to incorporate our additional understanding of firms and markets, as well as the changes in the competitive environment faced by firms.