MS&E
235, Internet
Commerce. Spring 2008-09.
Instructor:
Ashish Goel
TuTh
2:15-3:30; Skilling 193. This class is
on SCPD.
There
will be a
few optional televised discussion sections during the quarter; location
and date TBA.
Discussion
Section 1: Thursday, 4/16,
4:15-5:05, in Skilling 191. Problems.
Discussion Section 2: this Thursday, 4/23, toward the end of class
after some lecture. Problems.
Solutions
Final Review Office Hours:
Professor
Goel: Friday 5:30 - 7:30pm
TA Caleb: Monday 10:00 - 12:00noon
FINAL EXAM:
When:
Today
Where:
Terman Auditorium, 7-9 PM
What:
Closed Book, Cumulative
If
you are
auditing the class, please subscribe to msande235-spr0809-guests by
going to http://mailman.stanford.edu.
You
can also see last
year's web-page.
Contact
information:
Instructor:
ashishg at stanford.edu, Cell phone: 650
814 1478,
Office: Terman 311.
Course
assistant: Caleb Tolman. Email: calebj at
stanford.edu, Office: Terman 479.
Unless
you need to very
specifically contact the CA or the instructor, send email to
msande235-spr0809-staff @ lists.stanford.edu (effective Apr 4)
Office hours: Ashish: Th 11-12. Caleb: Tu 4-5.
Text-book: None; we will make lecture notes
available a few days after each lecture.
Class description: The technology, mathematics, and
economics of Internet commerce. Topics include: models of Internet
commerce;
online advertising; product recommendation systems and personalized
marketing;
pricing and delivery of digital media; web tools; piracy, copyright,
and
peer-to-peer networks; rating and reviewing of online businesses; and
co-evolution of Internet technology and commerce. Hands-on exercises; group project.
Grading: Project 35%, Homeworks 25%, Midterm 20%,
Final 25%. If you score more than 100, you get an A+.
Timetable:
Project
groups: Due Apr 14th.
Midterm:
Apr 30th,
in class (except for SCPD students, of course, who can take it at their
work
place).
Interim
project report: Due
any time during the quarter. The sooner the better if you want feedback.
Project
presentations: May 28th
and June 2nd. At least one member of every group must be
able to come to
campus.
Final
project report: Due June 4th.
Final
exam: Tue June 9th, 7-9pm (from the registrar’s
exam schedule)
Topics (subject to
change; some of these will be
covered informally by guest speakers).
1)
Advertising
and marketing
a)
Push vs pull
models; cost-per-click
vs cost-per-action vs cost-per-impression
b)
Technical topic:
auctions
(advertising auctions, truthful auctions, eBay auctions)
c)
Technical topic:
decision making
under uncertainty and the multi armed bandit problem
d)
Technical topic:
long tails
2) Reputation, prediction, and recommendation
a)
Reputation systems
in practice
b)
Technical topic:
Eignevalue methods,
eg. PageRank and HITS
c)
Technical topic:
Prediction markets
d)
Technical topic:
The arbitrage
primitive
e)
Technical topic:
Singular value
decomposition and collaborative filtering
3) Social networks
a)
A survey of social
networks
b)
Social robustness;
privacy vs
functionality; anonymized consensus
c)
Technical topic:
the social cost of
cheap pseudonyms
d)
Technical topic:
spread of influence
in social networks; function follows form; and viral marketing
e)
Monetizing social
networks
4) A brief description of the client-server model
a)
Email and the web
b)
DNS and Akamai
5) Peer-to-peer systems
a)
Piracy vs copyright
b)
Technical topic:
the architectures
of KaZaa, BitTorrent, and Skype
c)
Technical topic:
Pricing of digital
goods
Project descriptions: The
projects must be done in groups of three or four. Each group turns in
an
interim and a final project report and presents the project in class.
For the
Google Online Marketing Challenge the lengths of the reports are
determined by
Google to 2 and 10 pages. For all other projects, the interim report
should be
around 5-7 pages and contain a brief description of your approach to
the
project, a summary of your progress, and a detailed outline of the
final
project report. The final project report has no page restrictions, but
around
15-20 pages is probably sufficient. All
project reports could be on the class web page and hence in the public
domain.
But you must maintain confidentiality of any external data that you are
provided and omit that data from the public part of your report.
Suggested
projects (you are free to devise your own):
1)
Google Online
Marketing Challenge (teams must be of size 4)
Student
groups
will receive US$200 of free online advertising and then work with local
businesses to devise effective online marketing campaigns. They will
outline a
strategy, run their campaign for 21 consecutive days, assess their
results and
provide the business with recommendations to further develop their
online marketing.
Each student group will choose a business that (a) has a website, (b)
is not
already advertising using Google AdWords, and (c) agrees to have a
campaign
devised and run for the purposes of the Competition.
Projects
will be evaluated by Google on three criteria, two short written
reports and
the most effective Google AdWords campaign for their business. We will
use the
same criteria.
There is a special timeline for this
project. You must submit a two page proposal by April 21st. The best
four proposals will get a surprise prize on the 23rd that will help you
with the challenge (subject to the proposals meeting a quality
threshold). You must start on May 1st, and be finished in three weeks.
The midterm is on Apr 30th to allow
you to focus on the online challenge. You have to provide a
pre-competition report to Google and also a post-competition report.
(see
acknowledgments)
2)
Build an
Internet-based business (same as last two years: here is an article
about this project from the Stanford Daily) (An example from
previous years)
Each
group must
invest no more than $225 (suggested but not mandatory breakdown: $200
in
advertising, $25 in operational costs) to build an Internet-based
business. The
projects will be evaluated on (a) Strategy and execution [20 pts] (b)
Whether
the group generated revenues [7] (c) How much revenue the group
generated [4]
(d) Whether the group turned a profit [2], and (e) How much profit [2].
We
would suggest investing $100 each towards advertising on Yahoo and
Google (or
MSN or any other combination of two venues that you prefer) to attract
customers into an Amazon associates site that you create for selling
products
of your choosing, but feel free to use any other legal, socially
responsible,
and ethical business model. You can reinvest your revenues into
advertising/operations, but if your net out of pocket expenses hit
$225, you
MUST stop. Submit an interim progress reports and a detailed final
report
including accounting and receipts. Don’t panic if you go bankrupt – as
you can
see from the relative weights, it is more important to have a
convincing
strategy and good execution than to be too narrowly focused on turning
a
profit, which is hard in so short a time. Try to invest gradually so
that if
one business idea is not going anywhere, you can try another to at
least
generate some revenue (for example, a blog that attracts ad-sense
revenue).
Start early. Discuss your project with us early and often. And
remember,
content rules! You should have no direct
inventory. You have to submit an expense summary and an honor code
statement by
all group members that you did not exceed the prescribed maximum.
3)
Think of an innovative new social primitive, auction, or
interaction mechanism. Design and conduct simple experiements to
test your idea on either Facebook or Twitter. You do not have
to code an application, but in that case, your experiments
must be all the more innovative and concrete
The
instructor
has some ideas, which he will be happy to share.
4) Write a paper on mobile commerce. Specifically, address the issue of whether mobile service providers will be able to monetize the mobile Internet, or whether they will become dumb-pipe providers. This may seem like less work than the other projects, but please be forewarned that we will use a very tough standard to judge this project -- it should be of publishable quality and something that would be valuable to an industry expert, not just to a casual reader.
iStorez
Dumb Pipes
Debate
Click it, Sell
it, Buy it
Twitter
Topic Spread
Rotten Pakoras
Adrockers
SFMOMA
AnswerBunch
GoodMeals
for Life
Liar's Dice
Check
out
blinds.com, which is an example of a business which has succeeded in
monetizing
the long tail.
Listen
to this clip (http://www.thebusinessmakers.com/2006/09/02/episode-65-jay-steinfeld)
and
read this
article (http://www.internetretailer.com/dailyNews.asp?id=16816)
for more details.
The
Interactive Advertising Bureau has an interesting article on the rapid
growth of internet advertising: Internet Advertising Revenues Surpass $23 Billion in
’08
(http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-033009)
An
article by
Chris Anderson explaining long tails:
http://www.wired.com/wired/archive/12.10/tail.html
Please note that guest lectures are fair game for exam questions. Also, we will take attendance. Any on-campus students who do not attend the FULL lecture will have to turn in a 500 word report (individually written) summarizing the lecture.
Thursday 14 May: Richard Chatwin from Adchemy. We are glad to have Richard come speak to us.