The government-funded Computer Emergency Response Team alerted Internet users last week that the global web of computer networks is vulnerable to attack despite tough security measures. That's bad news for marketers planning to sell their products online, since it means hackers may be able to intercept merchandise orders or customer credit card numbers.
Still, the momentum driving commerce onto the Internet is not likely to slow down.
"Consumers are forcing us to change the way we do business with them, and we're happy to do it," said Mary Swenson, managing director of worldwide reservations and marketing distribution for Best Western International, a hotel chain that just two weeks ago launched its own site on the World Wide Web. Best Western plans to add the ability to book reservations and make payments online within six months.
"We're implementing the necessary security measures to accommodate our customers, but it may take some time," Ms. Swenson said.
Since hardware and software defenses, also known as "firewalls," haven't yet been perfected, observers said it's too early to pass judgment on Internet security.
"This Internet scare is a little overblown. It really only involves some routers that were built a few years ago, but routers built today usually have the equipment in place," said Nate Zelnick, editor of the newsletter Information and Interactive Services Report. "Security is never an absolute. But if you own a grocery store are you not going to open because maybe 2% of your stock could be stolen by shoplifters? It's just a matter of taking the proper security precautions to make sure you're not a sitting duck."
Marketers are pouring onto the Internet, but few have offered transactional capabilities at the outset. Agencies said they're eager to do that when it's safe.
"The security systems will definitely come, but I don't think we've seen them yet, so we wouldn't recommend our clients do online transactions," said Judy Black, senior partner/co-director of interactive media development at Bozell Worldwide, New York.
800-FLOWERS, which has online presences through the Internet's Shopping2000, as well as locations on commercial services America Online and CompuServe, hopes to open its own World Wide Web site by Valentine's Day.
"We're designing the site so it can be transactional-separating our internal computer network from the Internet one. As soon as the best encryption software is available, we will be selling flowers via the Internet," said Donna Iucolano, marketing coordinator for the floral marketer's interactive division.
As electronic commerce becomes a reality, the question of liability and responsibility will become more of an issue.
"If manufacturers are serious about doing commerce online, they'll have to be very involved because consumers will ultimately hold them responsible" if something goes wrong, said Rishad Tobaccowala, VP-account director of interactive marketing at Leo Burnett Co., Chicago. "We as their agents will need to be involved .*.*. but when security problems arise on the Internet-be they transactional or intellectual-the brand gets hurt, so those people who manage brands must take care of that brand in every step of the process."
Chaos on the Internet could be a boon for others. "All the hype around the Internet scare might encourage marketers to use commercial online services, even if they do charge by the minute," said Peter Krasilovsky, a senior analyst with Arlen Communications, Bethesda, Md.