E-BUSINESS SPECIAL REPORT
E-Commerce in the Shadow of the Hackers

In the wake of massive denial-of-service attacks on the Internet's DNS root servers, that scenario seems far more likely than it once did. Although computer users barely noticed the attacks, hackers briefly took out seven of the 13 root servers that manage the Web’s traffic and disrupted the performance of two others.

While the incident showcased the strength of the Net's backbone -- even a massive attack did not bring it down -- others saw it as a frightening reminder of how fragile the Internet truly is.

Million-Dollar Minute

If the Internet ever did crash, time would truly be money. With Forrester Research estimating that US$17 billion worth of e-commerce occurred during the second quarter, every 24 hours of Internet downtime theoretically could mean more than $175 million lost from the U.S. economy.

Still, analysts pointed out that if an outage were brief, almost every dollar likely would be recouped later, helping cushion the blow to the e-commerce sector.

"The Internet is clearly a fixture in the middle- and upper-class home," Columbia University professor and marketing consultant Ruth Stevens told the E-Commerce Times. "It's become like the phone or electricity -- the idea of its unavailability is just incomprehensible."

Repairs Made

But long-term damage stemming from an Internet attack could be immense. Because shopping, unlike other online activities like e-mail, can easily take place offline, shoppers might be the last to return after an extended outage, especially since buying online means disclosing credit card and personal information.

"I don't think anyone really knows what would happen in that scenario," said Stevens. "It's like nuclear war; no one really wants to think about it. But my sense is that e-commerce has matured to a point where most people would come back over time."

Back at the Ranch

Some analysts say the scene at any major e-commerce company would likely be one of chaos and countless thousands of dollars lost per hour, as employees in the shipping and receiving department stood idle and customer service phone lines were overwhelmed with incoming calls.

"There are security threats you can guard against and some that are out of your hands, but [that] you still have to imagine and plan for," IDC chief research officer John Gantz told the E-Commerce Times. "Smart companies have figured out how they'd react, what they would do in response."

Lessons Learned

Businesses clearly are doing whatever they can to control their own corners of the Web universe. Those that have endured outages in the past have reacted by beefing up their infrastructure -- a nod to the importance of staying open 24 hours a day, every day.

For example, eBay split up its servers and outsourced some of its Web traffic management after a series of nasty outages two years ago. One analyst estimated that one of the outages cost eBay several million dollars. Probably as a result of its efforts, the auction site has seen only minor glitches since.

Having a site that is always available is becoming even more important as e-commerce moves overseas, with e-commerce giants like Amazon and eBay now seeing much of their growth outside the United States. "We do everything we can, everything that's within our power, to ensure continuous access for our users," eBay spokesperson Kevin Pursglove told the E-Commerce Times.