Eighth ACIS International Conference on Software Engineering, Artificial Intelligence, Networking, and Parallel/Distributed Computing

Study and Application of Web-based Data Mining in E-Business

Yanguang Shen Lili Xing Yiting Peng

College of information and
Electronic Engineering
Hebei University of
Engineering
Handan, 056038, China
zhbaizh@163.com
College of information and National Natural Science
Electronic Engineering Foundation of China
Hebei University of Beijing，100085, China
Engineering
Handan, 056038, China
baobao2005lili@yahoo.com.cn

Abstract Internet efficiently, in order to help the data owners

The paper is engaged in a discussion over
applications of Web mining to the intelligent search
engine, customer relationship management,
personalized service and commercial credit evaluation
in e-business. And analysis and reasoning of the mass
of information in e-business are made by the
technology of Web mining, which can dig out potential
modes and predict customers' action, to help
enterprises’ decision-makers adjust their marketing
strategy, reduce the risk, make right decisions and get
competitive advantage.
1. Introduction
Currently, e-business, with its advantages of low-
cost, high efficiency, free from the restrictions of time
and space, gradually prevails in the globe. But
meanwhile it is confronted with many problems. How
to collect the information about the environment inside
and outside of the enterprise comprehensively,
accurately and timely through the Internet, especially
the hidden information that is the key to the success of
the enterprise, so as to adapt to the changes of the
market and enhance the competitiveness? How to
adjust the marketing strategy and optimize the structure
of the website and the way of service according to the
access habit of customers to increase the efficiency of
the website, in order to improve the customer
relationship management and realize the lifetime value
of customers? How can enterprises ingratiate the
customers, realize recommendation on their own
initiative and offer personalized service to them? These
problems are the key to the success of the e-business.
In the new mode of business, how to organize and
make full use of the abundant information on the
discover the valuable information and then make right
decisions in business, becomes the urgent problem that
e-business operators are concerned about. The rapidly
developing technology of Web-based data mining
offers an effective approach to the problems that e-
business is confronted with.
2. Web mining
2.1. Summarization of Web mining
Data mining is an uncommon course to extract the
previously unknown and potentially useful information
and knowledge from massive, incomplete, disturbed,
fuzzy and random data. Web mining tries to extract
interesting, potentially useful and hidden information
from the documents and activities on the Web to help
people abstract knowledge from WWW by way of data
mining to some extent, which is a cross field of
database, data mining, artificial intelligence,
information retrieval, natural language understanding
and so on.
2.2. Data sources of Web mining in e-business
There is a great deal and large variety of data in e-
business which can be used for data mining analysis.
Usually the types of data which can be used for Web
mining to produce different knowledge modes are as
follows [1]:
1. Server data. Customers will leave their respective
log data on Web servers when visiting these sites.
These log data are usually stored in server in the form
of document files, generally including server logs,
error logs, cookies logs and so on.
2. Query data. Query data is a typical kind of data
produced on e-business Web servers. For example,

0-7695-2909-7/07 $25.00 © 2007 IEEE 812

DOI 10.1109/SNPD.2007.117
customers stored on line perhaps search for some
products and some advertisement information, and this
query information is just related to the server log
through cookies or register information.
3. On-line market data. The major part of the data is
about e-business websites, purchases of customers,
merchandises and so on, which is stored in traditional
relational databases.
4. Web pages. Web pages include HTML or XML
pages, which comprise texts, pictures, audio, and video
and so on.
5. Hyperlinks between Web pages. It is an
important resource, which indicates the relation of
hyperlinks between pages.
6. Customer registration information. It is the
information that customers have to input via a Web
page and submit to the server. It is usually about the
demographic characteristics of users. In Web mining,
customer registration information should be integrated
with visiting logs to improve the accuracy of data
mining and produce more knowledge about customers.
2.3. Knowledge schemas that Web mining can
acquire
Web mining techniques can be employed to dig out
some relevant knowledge schemas from various data
sources of websites to guide operators of the sites to
work better and provide better services to customers.
Usually, Web mining can be used in websites to mine
out the following knowledge schemas.
1. Path analysis. It can be used to determine the
most frequently visited path in a Web site. Through
path analysis, we can find important pages and
improve the design of Web pages and the structure of
the Web site.
2. The discovery of association rules. The mutual
relations between the various documents customers
visited on the website can be found with the discovery
of association rules in e-business. The correlation
between pages and the relativity of the purchases can
be found as well. With these relativities in mind, the
sites can be better organized and effective marketing
strategies can be put in practice to increase cross-sales.
Meanwhile, the customers’ burden of filtering
information can be reduced greatly.
3. The discovery of sequential patterns. It is the
finding in time-stamp-orderly sequence transactions of
those internal models of transactions in the way of
“some items following another”. It can facilitate e-
businesses predicting client access mode and help offer
targeted advertising services to clients. The discovery
of a series of models can help the server choose
813
targeted pages so as to meet the specific requirements
of visitors.
4. Classification and prediction. The discovery of
classification gives a description of the public
attributes to a special group, which can be used to
classify new items. The purpose of classification is
mapping the data items in the database to one of the
given types by constructing a classification model or
classifier so that it can be used in prediction. That is to
say, historical data record is used to give the extended
description of the given data automatically, so that
future data can be predicted and some business
activities suitable for a particular clan of customers can
be carried out.
5. Cluster analysis. Customers with similar
characteristics can be gathered from the Web-visiting
information with cluster analysis. Clustering customer
information or data items in Web logs facilitates the
development and implementation of future marketing
strategies, which include sending email for sales
automatically to a specific customer cluster,
recommending specific commodities to customers of a
certain cluster and so on. For e-business, customer
clustering can provide strong theoretical support to
market segmentation. By extracting features from
clustered customers, e-business website can provide
their customers with personalized service.
6. Anomaly detection. Anomaly detection describes
the minority and extreme cases of the analyzed object
revealing the internal causes so as to reduce operation
risks. The application of anomaly detection in e-
business can be reflected in credit card fraud screening,
unusual customer detection, and network intrusion
detection and so on [2].
3. Application of Web mining to e-business
3.1. Intelligentized search engine based on Web
mining
Current search engines have some disadvantages
such as low precision and the great deal of useless
information returned, so that e-business enterprises
can't acquire enough crucial information to enhance
competitiveness. The technology of Web mining and
the search engine can be combined to make the
intelligent search engine to meet the needs of e-
business enterprises.
The follows are some aspects of Web mining
mainly adopted by search engines: automatic document
classification, automatic abstract formation, online
clustering of retrieval results, relevance ranking and
the personalized search engine [3]. We can sort the
retrieval results by document classification to help
users locate the object knowledge fleetly. Most search
engines automatically intercept the first several
sentences of a document and make an abstract with
fixed words, so that it has the fault of reflecting
information incomprehensively. Automatic abstract
formation can resolve this problem and help users get
the retrieved information more accurately, more
conveniently and faster. The clustering of the retrieved
document set can assemble the relevant documents to
keep away from those irrelevant. The processed
information can be offered to users in the visual
hierarchical form of the hyperlink construction. And
users can then choose their favorite clusters to reduce
the number of Web pages to be browsed. The search
engine combined with personalized technology of Web
mining can get the intrinsic characters of data objects
on the basis of numerous training samples and extract
information purposively according to them, so that it
expands the search engine’s store of key words users
have searched by according to users’ preferences and
consequently the retrieval results can meet users’ needs
more closely. Or it can set up users’ interest library on
the analysis of the information users have browsed. In
a word, the personalized search engine can enhance the
recall and precision of search.
3.2. Application of Web mining to Customer
Relationship Management (CRM)
The core of CRM, on one hand, is to discover
potential markets and customers by collecting effective
data about customers and their activities; and on the
other hand, is to meet customers’ needs and to realize
customers’ lifetime value by improving the customer
service and a deep analysis of customers. CRM
provides traditional enterprises with management
systems and technical artifices for their survival in the
network economy era. It requires enterprises to transfer
from the "product-oriented" model to "customer-
oriented".
3.2.1. Application of Web mining to CRM. Web
mining can help enterprises identify customers’
features, which enables enterprises to provide targeted
services for customers. Web mining used in CRM of e-
business has several aspects, such as the acquisition
and maintenance of customers, identification of the
value of customers, analysis of customers’ satisfaction,
and improvement of site structure and so on.
With Web mining, we can understand the dynamic
behavior of visitors and optimize the operation mode
of e-business websites. We can put the large number of
customers acquired into different categories and
provide personalized services for customers from
814
different categories to improve the satisfaction of
customers and to maintain old customers consequently.
We can determine which category a new visitor
belongs to and whether he or she is potentially
profitable by analyzing the records of the pages that the
visitor browses, so that we can deal with different
customers accordingly , reduce the cost of sales,
increase the rate of transforming from visitors to
buyers, and hence dig out potential customers;
Customers with similar browsing behaviors are
grouped together and their common features are
extracted, so that customers can be clustered, which
can help e-business enterprises to better understand
customers’ interests, consuming habits and trends,
predict customers’ needs, recommend specific
commodities to them accordingly and realize cross-
selling [4]. The trading volume and the rate of
successful trades will be increased and the efficiency
of distribution will be improved.
In addition, the structure and content of the site is
the key to customers’ interest. With the discovery of
association rules, we can rearrange them dynamically
for different customers, and put together the
commodities with some degree of support and trust to
promote sales; By the means of path analysis we can
identify the paths along which a category of customers
visit the site frequently. These paths reflect the
sequence and habits of such customers visiting pages
of the site. We can hyperlink the related documents
customers have visited in order that they can access
their favored easily. Such a site will leave a good
impression on customers, strengthen their loyalty,
arouse their interest, prolong their time present on the
site and increase their chance of visiting again.
By Web mining, we can acquire reliable market
feedback to evaluate the rate of return on
advertisement investment and decide whether the
online marketing mode is successful or not; According
to the browsing mode of visitors interested in a certain
product, we can determine the location of the
advertisement to increase the pertinence and the rate of
return on advertisement investment and reduce
companies’ operating costs.
3.2.2. Safeguard the privacy of customers.
Safeguarding the privacy of customers is a basic part in
commercial operation that can not be ignored.
Therefore, as an e-business enterprise, mining an
individual customer should be avoided. Customers’
privacy should be protected with both technology and
management. Technologically, we usually adopt the
encrypted identifier, and minimize individual customer
data mining. In management, many enterprises have
added the position of Chief Privacy Officer, who
makes an appropriate balance between the individual
demand for privacy and the right of using private
materials in a reasonable way on the part of the
enterprise [5]. E-business enterprises manage the
protection of customers’ privacy as a sole main body.
In addition, trade self-regulation is an effective way to
protect customers’ privacy. At present, e-business
websites are more and more inclined to establish their
self-images in customers by way of self-regulation, so
that customers can submit data free of worry.
3.3. Application of Web mining to the
personalized service recommendation system
It can help enterprises implement better CRM to
setup the personalized service recommendation system
Data collection module Data preprocess module
in e-business. It is the executor of the “customer-
oriented” ﹑“one-to-one” sales principle.
The personalized service recommendation system
mainly applies the ideas and methods of data mining to
such resources as Web server logs and Web databases
[6]. It mines the regular visiting patterns of users, puts
them into particular categories and recommends Web
pages accordingly. And the system can adjust the
recommendation set timely to provide personalized
access for users by constantly tracing their current
access. It is composed of five modules: data collection,
data preprocess, data storage, offline mining and online
recommendation. The system construction model is as
figure 1 shows.
Data storage module

Web
database Data cleaning
User identification User
Session identification transaction
Transaction identification library
Usage log Site files Path complement
library

Offline mining module

Useful
mode Mode analysis Mode rule set Mode discovery Data mining engine
set

Online recommendation module

User session User session
Recommendation Web
engine Personalized service
Recommendation server
rule set Improvement of the Network
structure of site centre

Figure 1. Construction model of personalized service recommendation system based on Web

mining.
The data collection module can collect such data as preprocessed data into the transaction library. The
Web databases and usage logs to prepare for later mining engine of the offline mining module uses the
mining. The data preprocess module preprocesses the data mining technology in the algorithms library, such
collected data, its process including data cleaning, user as statistical analysis, association rules, cluster analysis
identification, session identification, transaction and sequence patterns. It serves to discover the
identification and so on. The quality of the data browsing modes of users, and analyze and translate
preprocess is greatly correlated to the efficiency and them through mode analysis. Based on practical
result of mining. Data storage module stores the application it can change the statistic results,

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discovered rules and modes into knowledge through
observation and selection. The useful mode that has
been chosen out can guide the practice of e-business.
The online recommendation module sets a
recommendation engine in the front of the Web server.
It generates the corresponding recommendation set,
combining the users’ current browsing and the Web
page recommendation set the users have browsed. And
then recommendation set pages are added to the newly
requested pages, which are transmitted to users’
browsers through the Web server, realizing real-time
personalized services. At the same time, the
recommendation results are transmitted to the site
management centre for it to adjust the site design,
optimize its structure and enhance its efficiency.
In a word, the personalized service recommendation
system with the data mining technology has two stages.
The first stage is studying offline. The second is the
online using of the mode. The feature capture of
mining and online recommendation and the generation
of rules are processed offline. But online services are
provided through the online recommendation engine
when users access the site. The online and offline
modules are interrelated to each other. The online
module offers recommendation based on the rule
models provided by the offline module; and the offline
module generates correspondent rules with the data
accumulated online and by recommendation
algorithms. The mining algorithm and recommendation
strategy can be chosen according to the need of sites of
different styles. The mining results and
recommendation set are fed back to users by the
recommendation engine. The access information will
be recorded in the server after users login the site. And
after being preprocessed these data will be processed
using mode identification and mode analysis with
concrete mining algorithm and recommendation
strategy in the exclusive data mining module. Users’
access information is also transmitted to the
recommendation engine, which extract the
correspondent user’s mining results and
recommendation set from the mining module and feed
them back to users visually to realize personalized
services.
3.4. Application of Web-based data mining to
commercial credit evaluation
Developed social credit is the important foundation
for the development of e-business. It can prevent the
risks of investment and operation effectively with the
statistics of the differences between the data of website
and the historical record, the deviation between the
results and expectations and full analysis of the
816
abnormal examples by Web mining. In addition, we
can track the operation of enterprises by data mining
technology to evaluate the enterprise assets, analyze its
profitability, predict developing potential, form perfect
security assurance system, implement monitor and
control of the whole course online, supervise of free
presses online, stick up for enterprise credibility,
strengthen the security management of Internet
transactions and online payment. With the credit
evaluation model of data mining, we can find the data
features of customers’ transactions and set up customer
credit level, in order to prevent and reduce the credit
risks effectively and enhance the level of enterprise
credit discrimination and risk management through
mining the amount data of history transactions [7].
4. Conclusions
Hidden knowledge behind massive data can be
found by e-business-oriented Web mining, which can
guide e-business enterprise to increase sales, improve
the enterprise-customer relationship and increase the
operating efficiency of the website. The development
and application of e-business-oriented Web mining has
a good prospect and will be paid more and more
attention to.
5. References
[1] Zhong Xie, “Recommendation System of Commercial
Site Research Based on Web Data Mining”, Master’s Degree
Thesis of Southwest Normal University, 2002(05), pp. 8-10.
[2] Fengzhao Yang, and Hui Bai, “Application of Anomaly
Detection in E-business”, Information Magazine, Xi’an,
2005(12), pp.51-53.
[3] Yan Li, Xinzhong Chen, and Bingru Yang, “Research on
Web Mining-based Intelligent Search Engine”, Computer
Engineering and Applications, Beijing, 2002(04), pp.34-36.
[4] Xiang Su, Weiling Jiao, and Pei Wu, “Application and
Study of Web Mining”, Infotmation science ， Theory &
Application, Beijing, 2005, 28(06), pp.651-655.
[5] Jing Hao. “Application of Data Mining in the CRM of E-
business”, Master’s Degree Thesis of Wuhan University.
2005(05), pp.47-53.
[6] Fenghui Li, “On Ec-oriented Web Data Mining”,
Master’s Degree Thesis of Shandong Science and
Technology University,2004(06), pp.35-79.
[7] Chuiwei Lu, “Study and Application of Data Mining
Technology in E-business”, Market Modernization, Beijing,
2006(04), pp. 87.