Getty Images Serves Up Profit and YouTube Grows Exponentially Group 1 Instructor Dr. Celeste Ng 2011/03/31 Revised Version Yuan Ze University 992 Semester

Getty Images Serves Up Profit and YouTube Grows Exponentially

•Group 1•Instructor Dr. Celeste Ng•2011/03/31 Revised Version

•Yuan Ze University•992 Semester•IM426 Management Information Systems (II)•Group presentation

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971703藍筱彤

971710藍紹綸

971711花馨慧

971716黃郁珊

971717周芝帆 971765蔡博宇

971751林振宇

971737陳柔涵

971726翁逸驊

971725楊明叡

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• Introduction to Getty Image and YouTube.

971711 花馨慧

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Getty Images’ History

• HistoryMark Getty and Jonathan Klein founded Getty Images Founded in 1995In July 2008,GettyImages was purchased by Hellman &

Friedman for 2.4 billion.

Picture from ： http://www.gettyimages.co.uk/

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What is Getty Images?

1. The first company to license imagery online.2. Employ staff photographers to shoot world’s

news , sports events3. They have imagery, video , audio.4. Photographers and other artists under contract

can obtain their imagery.5. Share of revenue to the content owner

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Getty Images’ licensing model

• Three licensing models Subscription Royalty-free Right managed

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• Subscription Customer subscribe through a contract with

Getty Images. Customer can use as many image as often as

they want. Images can used in apply to news , sports ,

entertainment purpose.

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• Royalty-free Customers pay a fee based on the file size of the

image. Customer can use image any way they want and

as many times they want. Customer can’t prevent competitor from using

the same image at the same time.

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• Right managed User pay fee according to the right they wish to

use (size , industry , geography , prominence, frequency).

Provide the largest revenue.

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YouTube’s History

• February 2005Chad Hurley , Steve Chen , and Jawed Karim founded

YouTube• November 2005

YouTube had 200,000 registered users and was showing 2 million video per day

• July 2006users were viewing 100 million videos and uploading

65,000 new video per day.• October 9 2006

Google purchased YouTube’s company

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What’s YouTube?

1. YouTube is a video-sharing website on which users can upload, share, and view videos.

2. Most of the content on YouTube has been uploaded by individuals.

3. Unregistered users may watch videos, and registered users may upload an unlimited number of videos.

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YouTube’s success

• Easy to uploadYouTube allowed users to easily embed any hosted videos

on web pages or blogs.

• It is obviousEveryone understands right away

• User friendlyEveryone can use it right away without signing up or

reading long texts.

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Getty Images and YouTube‘s similarity

• Near zero cost of production Near-free data communication and data storage

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1. Visit www.gettyimages.com and select "Image/Creative/Search royalty-free. "Search for an image of a major city of interest to you. Select a photo and determine its default price. Follow the link on the photographer's name to find other images by that photographer.

2. Explain how Getty Images’ business model takes advantage of the opportunities created by IT as described in Chapter 1.

971751 林振宇

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What’s opportunity that created by IT?

1. IT provides high quality information for Getty Images.

2. High quality information cause customer believe Getty Images.

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Compare to the traditional model

1. The quality of information is very low.2. Customer will not believe you.

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The characteristics of the high quality information

• Accuratecorrect and complete data, and processed correctly.

• Timely produced in time for its intended use.

• Worth its cost compare to traditional mode, IT is very cheap.

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Accurate

1. Customer is expect 100% correct information.2. Traditional mode made a lot of mistakes.


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Timely

1. Produced in time for its intended use.2. Traditional mode is slow.3. Customer doesn’t want to wait.

Less than one second


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Worth its cost

1. The cost of data communication almost equal to zero.2. Traditional mode use a lot of human.3. Human is very expansive.

training 、 food 、 salary…4. More cost, more price.5. Customer like low price.

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3-1 Evaluate the photography market using Porter's five force.

3-2 Do you think Getty Images’ marginal cost is sustainable?

3-3 Are its prices sustainable?3-4 What is the key continued success?

971716 黃郁珊

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Porter’s Five Forces

Bargaining Power of

Customers

Bargaining Power of

CustomersCompetitive

RivalryCompetitive

Rivalry

Threat of New Entrants


Threat of Substitutions


Bargaining Power of Suppliers


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• Bargaining Power of CustomersThey have weak strength in this force.Users can’t decide the price of their right they

wish to use.

Evaluate the photography market - Porter’s Five Forces(1)

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• Bargaining Power of SuppliersThey have medium strength in this force.The photographers’ they employed can decide

their photos’ price.


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• Threat of SubstitutionsThey have weak strength in this force.There are not existing better format of photos

that can replace their photos which is in digital.


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• Threat of New EntrantsThey have high strength in this force.The new competitor easy to enter the market

because they don’t have something professional.If the new entrant provide the same

products ,they will replace easily by the new entrant.


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• RivalryThey have high strength in this force.There are many servers provide the same function

to upload and download photos.Maybe the competitor use price strategies to

attract customers.


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The photography market

Bargaining Power of Customers

Weak

Bargaining Power of Customers

Weak

CompetitiveRivalry

High

CompetitiveRivalry

High


High


High


Weak


Weak


Medium


Medium

Porter’s Five Forces

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Marginal cost & Price are Sustainable?

• Getty Images' marginal cost is Zero.The cost of photos is nil.Their marginal cost is sustainable.

• Getty Images' price is HIGH.Their photos provide mainly for business.But other competitor have lower price, they may

lost some customers.Maybe their price would not be sustainable.

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The Key to Continued Success

• The cost of producing a photo is nil. (Cost)Photos in digital formatCommerce server database

• Users should pay fees for what they used.Users pay fees according to the right that they

wish to use. (Revenue)• Revenue > Cost

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4. What seems to be Getty Images competitive strategy?

971765 蔡博宇

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Data source : Using MIS P107 Figure 3-12

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• Create a new product or service– Service ：

The first online company with image authorization.Provide a Internet platform for circulating Images with copyright.

• Enhance products or service– Service ：

Classification of photos Cooperation with Flickrs. Direct contact with the authors. Provide assistance over ten languages.

• Different products or service– Product ：

Demand charges. Different size different price. (Using MIS P128 Figure 2)

➔ Figure 1

➔ Figure 2

➔ Figure 3

➔ Next page

➔ Process Implementation

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http://www.flickr.com/groups/tw/

Image hosting and video hosting website.

share and embed personal photographs,

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Images 、 videosCopyright

Images 、 videos

Free download User-pays

• Images has copyright by flickr and gettyimages.

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Figure 1 ： Classification of photos

http://www.gettyimages.com/

38Figure 2 ： Direct contact with the photos author


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Figure 3 ： Provide assistance over ten languages


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• Lock in customers and buyers Customer group of enterprises and commercial companies. Use B2B 、 B2C models.

• Lock in suppliers Photographer flickr website members

• Establish alliances Photographer ➾ flickr➾ flickr members ➾ Getty Images Photographer ➾ Getty Images

• Reduce costs Decrease hardware cost and publicity cost. ➔ Figure 4

➔ Comparison

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Figure 4 ： Getty Images logo


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Getty Images flickr YouTube Picasa

UsingImages

Different size different price Free No support Free

UsingVideos

Different type different price No support Free No support

Free download A few Yes No Yes

Customer group Business All All All

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Conclusion

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5. Explain how Getty Images’ use of information system contributed to the company’s value when it was acquired.

971717 周芝帆

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Kinds of IS on Getty images’ website

ProductProduct

Shopping cartShopping cart

Other servicesOther services

Customer portalCustomer portal

Social networkSocial network

Customer relationship management

Customer relationship management

Languages translationLanguages translation

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Value created by Getty Images’ IS

• Product (IS) image: sell image on the website footage: sell video on the website music: sell music on the website Value1: product diversification Value2: expand the ranges of sales Value3: increase sales

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• Shopping cart (IS) buy image, footage, or music by online shopping

Value1: reduce cost

Value2: save time

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Value created by Getty Images’ IS• Other services (IS)

service:(1)-rights & clearance(2)-special photographer

tools: advance searchcommunity: blog 、 Getty Image gallery

Value1: enhance customers’ satisfaction Value2: enhance customers’ loyalty


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• Customer portal (IS)Value1: take Advantage of customers’ information Value2: enhance customers’ loyalty


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• Social network (Twitter & Facebook)Value1: enhance company’s popularityValue2: extend customer source


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• Customer relationship management (IS)send e-mail

(function: solve questions and get feedback)live chat

Value1: break restriction of location and timeValue2: enhance customers’ satisfaction

Value3: get feedbacks from customers

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• Languages translation (IS)Value1: break restriction of location

Value2: extend customer source


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6-1 How did the availability of near-free data communication and data storage facilitate YouTube’s success?

6-2 Would YouTube have been possible without them?

971703 藍筱彤

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• High raking• Worldwide market• Free video• Free video format• Copyright’s video

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YouTube’s success

• YouTube’s ranking of websiteTop 3 in TaiwanTop 3 all over the world

• ARO (Access Rating Online) What’s ARO YouTube’s is 74%

56http://www.bnext.com.tw/magazine/view/cid/147/id/17371

57http://www.alexa.com/topsites

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• Worldwide market17 kinds of languageautomatic detect and transform to user’s languageLocal ranking

YouTube’s success

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• Watching video without having accountFree videoCopyright videoMusic video

• Upload with accountFree accountCombine with Google accountDon’t have any limit

YouTube’s feature

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• Support all kinds of formatFor upload

(1)- Free format(2)- .avi, .mkv, .mov, .mp4, .flv … etc.(3)- Support 3gp format for mobile user(4)- Transform to flash format

For watch(1)- Without buying software

Data storage facilitate

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• Why use flash?FreeEasy to get itAll most ever user already install itFlash plug-in commonly used Can be add to blog Easy to put in websitesupport more than 75% of videos

Data storage facilitate

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• Upload ruleUpload with website

(1)- 2GB limit(2)- 15 minute(3)- Without any software

Upload with software(1)- Limit up to 20GB(2)- Still 15 minute(3)- Support resume(4)- Free software

Near-free data communication

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• Deal with copy rightCooperate with entertainment companies

(1)- Warner Music(2)- SonyBMG(3)- CBS(4)- Sanlih E-Television Inc.(5)- CommonWealth Magazine Co., Ltd.(6)- Public Television Service

Blocking specific website

Near-free data communication

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Compare with other video website

• Nico Nico Douga Free but can pay for higher quality. Have to loginQuality limit

http://tw.nicovideo.jp/

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Economy mode for free userUser’s comment

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Can YouTube success without them?

• NoIf watching video have to payHave to install softwareHave to buy software

→ user reject to use it

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7. How did YouTube fund these expenses

971737 陳柔涵

YouTube Fund Source • Begin Found (2005.02):

– Angel investor • Then Found (2005.11 ～ 2006):

– Venture capital • Now Found (2007 ～ now):

– Advertisement

Data source: http://zh.wikipedia.org/wiki/YouTube

Angel investor

• Angel investor is people not company– Angel investors are often retired entrepreneurs or executives,

who may be interested in angel investing for reasons that go beyond pure monetary return

• Purpose– These include wanting to keep abreast of current

developments in a particular business arena, mentoring another generation of entrepreneurs, and making use of their experience and networks on a less-than-full-time basis

Data source :http://en.wikipedia.org/wiki/Angel_investor

Venture capital• Definition

– Venture capital is financial capital provided to early-stage, high-potential, growth startup companies

• Structure

Data source :http://en.wikipedia.org/wiki/Venture_capital

Advertisement

• YouTube every week surpasses 3,000,000,000 piece of advertisements

• Have two type advertisementGoogle keyword advertisementInVideo advertisement

Expenses

• Sever maintain• YouTube partner basic conditions

Video views ： 1000 views per videoSubscribers ： 2000 subscribersChannel views ： 50,000 channel views

http://www.hkreporter.com/talks/thread-973875-1-1.html

8. How does YouTube earn revenue ?

Revenue Source

• Advertisement A customized solution for your Flash video playerAds are non-intrusive and sit in the bottom portion of the

viewing area• Donate

some people probably want to thank the people who made that website for helping them to out videos on there or for helping them to be able to express their on the internet

What’s PPS

• Need download software before use PPS first• Free video website• Founds China

What’s Tudou.com

• Free video website• Founds China

Advertisement Compare

PPS YouTube Tudou.com

Perform Time 15sec unlimited 15sec

Advertisement Size Full screen 1/5 screen Full screen

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• Using the cases of Getty Images and YouTube as a guide, answer the following questions.

9. Choose a corporation located in the geographic vicinity of your college of university. In what ways is it already taking advantage of the low cost of data communication and data storage?

971710 藍紹綸

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Yuan Ze University

• Low cost of data communicationUse the Portal post the online message, and send the e-mail

to notice students. It can save more time and human resource than use the normal mail by using Portal and e-mail.

• Low cost of data storageIt can save more saving cost by using Portal and e-mail than

using the paper record.

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Portal

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10.Using the corporation you identified in question 9, identify three innovation ways that the corporation could take advantage of the low cost of data communication and storage.

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Innovation ways

1. Enhance Portal system and combine with the SMS 2. Enhance the rental system3. Student card combine with RFID4. Example

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Enhance Portal system and combine with the SMS

• Enhance Portal systemIncrease more information about school and provide more

function about searching and record.• SMS

Increase the capacity of e-mail box. When the e-mail box received the important message, sent the SMS to notify students.

• Low cost of data communicationReduce the cost of time. Using auto SMS to notify people can not

be affect by time or place.• Low cost of data storage

Enhance Portal system to lower more cost of data storage.

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Enhance the rental system

• Rental systemIncrease the rental range, like rent bikes, helmets, carts,

keys, etc.Electronic record the situation of the goods.

• Low cost of data storageElectronic record replaced the paper record. Saving the

storage cost and the time of searching.

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Student card combine with RFID

• Student card combine with RFIDIdentify the student data, get the all information by swipe the

student card.Enhance the student card. For example, rent by swiping or

combine other RFID cards.

• Low cost of data communicationSaving the entering and registering time.

• Low cost of data storageElectronic saving personal data. By using the student card to

identify students and get all the information from data base.

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Example

1. Use student card to take the bus or train, go to the doctor by using the student card to identify.

2. Online record before renting and swipe the student card to borrow or return.

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971725 楊明叡

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National Theater and Concert Hall

• Completed in 1987.• Primary national performing arts venues.

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Advantage

• Arts TicketOnline service of selling tickets.E-commerce

http://www.artsticket.com.tw/CKSCC2005/Home/Home00/index.aspx

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Advantage

• Buy the ticket step by stephttp://www.artsticket.com.tw/upload/en/ButTicket.htm

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Advantage

• For people to buy the ticketsThe low cost of timeThe low cost of getting tickets

• Provide information (other performing arts)The low cost of advertisement

The low cost of data communication.

Choose the site which is near from where you want

http://www.artsticket.com.tw/CKSCC2005/buyinfo/buyinfo00/SiteList.aspx

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3 new ideas

• Broadcast on-line / on TV (real time)

• Trailer (preview)

• Video on-line (Record)

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Thousands gather outside National Concert Hall to watch the broadcast of a performance inside.

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Broadcast on-line / on TV (real time)

1. On-site VS on TV / on-line2. Spectators

Higher ability of appreciate performing arts3. Audiences of on-line or TV

No time, no money, no seats…4. The low cost of rising people’s ability to appreciate performing

arts5. The low cost of data communication

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Trailer (commercial)

1. On-line (Arts Ticket or YouTube, etc.)2. Used to movies or games…3. The low cost of advertisement4. The low cost of data storage5. The low cost of data communication

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Video on-line (Record)

1. Youtube, etc.2. The low cost of art education3. The low cost of data storage4. The low cost of data communication

102http://www.youtube.com/watch?v=IrezpUWIY98

The Post-production is allowed to add some comment or subtitle to the video

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971726 翁逸驊

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WAYI

1. Wayi International Digital Entertainment Co., Ltd. 2. Called Wayi, it’s a game company in Taiwan.3. Funded in 1993.84. Made from the agent in Japan’s game and

then branched out into Taiwan’s game and online games

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Advantage

• low cost of data communication Free space some space on the internet that can

allow people upload and download files for free• low cost of data storage

Free space Concession

1) Provide some concessions on the physical product such as virtual treasure.

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• Orange’s beanfun

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• low cost of data communicationP2P(Official and player)

• provide another way to share the burden to server.Grid Computing

• a technique can share the CPU.

• low cost of data storageE-commerce

• a new way to reduce the cost.

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P2P(Official and player)

• Internalmake the date communication more faster

• Externalprovide a variety of download way

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Grid Computing• Data storage

some big program can run on one computer

• Data communicationcan fast up the time of server maintenance

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E-commerce

• Reduce the cost of physical CD

• Share the burden with download server

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Documents

Getty Images Serves Up Profit and YouTube Grows Exponentially Group 1 Instructor Dr. Celeste Ng 2011/03/31 Revised Version Yuan Ze University 992 Semester