As the importance of services in our society increases, so does the importance of systematic approaches to develop these services – commonly termed New Service Development (NSD). An increasing proportion of services are now electronic services delivered over the Internet. The purpose of this article is to derive a set of key attributes that distinguish electronic from non-electronic services and their potential influence on NSD. These key attributes are then used as a framework for analyzing NSD literature with regards to their applicability to the development of electronic services. This analysis revealed several gaps in NSD research. In particular current NSD methods are not well equipped to address the rapidly changing nature and specific cost structure found in electronic services. Moreover, current NSD methods are not well suited to fully exploit the various advantages electronic services offer over non-electronic counterparts, in particular, the transparent feedback generated by service usage and potentials for continuous improvement and rapid deployment of service changes.