Cyber Crime Essay

6034 Words Mar 5th, 2013 25 Pages
Case Studies of Cybercrime and Its Impact on Marketing Activity and Shareholder Value

Katherine T. Smith Department of Marketing Texas A&M University 4112 TAMU College Station, TX 77843-4112 Tel: 979-845-1062 Fax: 979-862-2811 Email: Ksmith@mays.tamu.edu

L. Murphy Smith, CPA* Mays Business School Texas A&M University 4353 TAMU College Station, TX 77843-4353 Phone: 979-845-3108 Fax: 979-845-0028 Email: Lmsmith@tamu.edu

Jacob L. Smith Grace Bible Church College Station, TX 77845 JacobSmith@grace-bible.org

*Corresponding author

Forthcoming in Academy of Marketing Studies Journal

Electronic copy available at: http://ssrn.com/abstract=1724815

CASE STUDIES OF CYBERCRIME AND ITS IMPACT ON MARKETING ACTIVITY AND SHAREHOLDER
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The term „cyberspace‟ refers to the electronic medium of computer networks, principally the Web, in which online communication takes place. A challenge facing e-business or cyber-business is that it is vulnerable to e-crime, also called cybercrime. Cybercrime can totally disrupt a company‟s marketing activities. Cybercrime costs publicly traded companies billions of dollars annually in stolen assets, lost business, and damaged reputations. Cybercrime costs the US economy over $100 billion per year (Kratchman et al. 2008, Mello 2007). Cash can be stolen, literally with the push of a button. If a company website goes down, customers will take their business elsewhere. In addition to the direct losses associated with cybercrime, a company that falls prey to cyber criminals may lose the confidence of customers who worry about the security of their business transactions. As a result, a company can lose future business if it is perceived to be vulnerable to cybercrime. Such vulnerability may even lead to a decrease in the market value of the company, due to legitimate concerns of financial analysts, investors, and creditors. This study examines types of cybercrime and how they affect marketing activity. In addition, the study reviews 10 case studies of publicly traded companies affected by cybercrime, and its impact on shareholder value. The research questions addressed by this study include: (1) What are some ways that cybercrime affects marketing activity? and (2) Do

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