Revenue Model for Google.com, Amazon.com, e-Bay.com

Revenue model describes as using different kinds of technique in generating from the publisher’s websites. Revenue model can be divides into 5 different kinds of techniques, there are:

Sales: Its include sales of goods, services and also merchandise information that provide in the publisher’s website.

Transaction fees: Company will earn commission from every transaction that have been made or based on the volume of transactions that conduct in the website.

Advertising fees: Publishers would allocate advertisements spaces in their website to let other company to place their advertisement and receive the fees from that company.

Subscription fees: This would charge to the customers who would like to subscribe to contents or services that provided by the website on a monthly or yearly basis.

Affiliate fees: Commissions will be received by company for referring customers to others web sites. It includes CPM (cost per thousand impressions), CPC (cost per click) or CPA (cost per acquisition/action).

Next, we would like to introduce the revenue model of the 3 popular websites which provide e-commerce services. There are Google.Com, Amazon.Com, and eBay.com.

Google’s Revenue Model
The main income of Google.com is generated by the advertising revenue model. Google advertising revenue model includes Google AdWords, Google AdSense and Froogle.Google AdWords is a pay per click advertising program of Google designed to allow the advertisers to present advertisement to people are looking for information related to what the advertiser has to offer. When a user searches Google search engine, ads for relevant words would shown on the screen. Google generate most of the revenue from Google AdWords.
Google AdSense is an ad serving program. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. Mostly the revenue is generated on a per-click or per-thousand-ads-displayed basis and the ads administered by Google.
Froogle is a price engine website launched by Google Inc. It is a service from Google that makes it easy to find information about products for sale online. Advertising space is available for purchases to be displayed in Froogle in the form of an AdWords ad.Currently, Google is testing a new advertising program that pays site owners based on a Cost-Per-Click model, called Cost-Per-Action. It was revealed via an invitation e-mail from Google AdSense team to Web site owners.

Amazon.com Revenue Model
Another e-market web site is Amazon.com which was one of the first major companies to sell goods through the Internet. Amazon generates revenue primarily on selling books, videos, electronics, and kitchen equipment on domestic and international Web sites.
Product Ads is an advertising program that puts products in front of millions of Amazon.com customers. Seller can simply upload their product catalog and set the cost-per-click bids and daily budget. Amazon will then display the ads in highly targeted placements throughout the Amazon.com site. When customers are interested in buying such product, they click through to the website and purchase the product directly from the company.Amazon Marketplace is Amazon.com’s fixed price online marketplace that allows sellers to offer their goods alongside Amazon’s offerings. Buyers can buy items which sold directly by third party through Amazon.com Marketplace. Amazon.com would charges on a commission rate based on the selling price of products or services, transaction fees, and also variable closing fees which this sales strategy and program has give profitable income for Amazon.com.
Besides, Amazon.com also generates their revenue by using Affiliate revenue model. AStore is Amazon.com affiliated product which website owners can use to create an online store on their site. The store does not allow website owners to sell their own products directly to customers. Website owners pick products from Amazon’s store and earn referral fees on the products purchased by their readers. The fee structure is currently the same as for the other affiliate links.

Ebay Revenue Model
Ebay is an online auction and shopping website in which people buy and sell goods and services worldwide. Millions of items bought and sold daily through this website and EBay normally generates revenue from a number of fees which are insertion fees, promotional fees, and final value fees.Insertion fees will be charged when an item listed on Ebay.com and this fee is nonrefundable. However promotional fees is the fees that charged for additional listing options that help to attract attention for the item. While final value fees is the commission that charged to the seller at the end of the auction.

Example of an E-Commerce Failure and Its Causes

An example of ecommerce failure is Nike shoe company. Nike's move to switch to flash for its e-commerce site is a break from traditional methods, with most companies relying on the more straightforward HTML, AdWeek writes. R/GA explained that by switching to flash, Nike is able to improve both user experience and the purchase process by adding a persistent shopping cart, which wouldn't be possible with standard html.

The Flash-based NikeStore.com will replace the seven-year-old NikeTown.com and will carry the same 30,000 pieces of apparel and footwear items as its predecessor.

Forrester Research analyst Peter Kim pointed to increased adoption of broadband and 97 percent consumer penetration rate of Flash in rationalizing the move. "If you tried to do this back in 2000, you'd be dead in the water," he noted to AdWeek. However, in recent years, failing to handle the orders flushed into its website, the company totally lost track of thousands of orders or failed to deliver them on time. The federal commission fined Nike $350000.

The causes of the e-commerce failure-I think part of the problem is when the big company jump into the e-commerce system, they forget some common factors that will affect their company during the holidays. Shipping product takes man power and during the holiday season, it tends to slow the process down simply by the sheer volume of orders of the mail service industry receives in that short period of time. Frankly, not all the companies have the capitol to invest in such a large expansion, if they are going into the e-commerce industry, they can't afford not to put in that investment.

Another failure causes is delivery the stock to customer is not on time. As we should know that, getting customer to the site is one thing, while delivering is another thing. Bricks and mortar retailers have no such problems. Failure to deliver the ordered stock on time to customers and displeased the consumer

Example of an E-Commerce Success and its Causes

Example of an eCommerce success and its causes

E-commerce describes the process of buying, selling, transferring, or exchanging products, services, or information via computer networks. Nowadays, e commerce became more and more crucial in organization, society or even customers. Everyone owns at least one computer at home and online transaction become a popular activity that bring our lives toward e-world. eBay is the example.



Almost everyone who has made a transaction on the Internet has used this global online marketplace that trades just about everything, either for the sale itself or to compare prices. Anything may be offered for sale as long as it is not illegal and does not violate the eBay Prohibited and Restricted Items policy. It had successful it business by enrolled it in this field with good strategic planning. Hence, it leads to this business to a long term growth.


There are several factors cause the successful of eBay as below:-



Variety of goods and services

First of all, eBay offers variety of goods and services. Since eBay is the world’s largest online trading community, it provides a wide range, different category of sales items which consist of collectibles, decor, appliances, computers, furnishings, equipment, vehicles, and other miscellaneous items Besides, it also allows people to connect and share very early childhood memories such as collecting stamps, coins, toy and etc. Moreover, the services provided by eBay include education, e-payment, restaurant and auctions.


Security and trustworthiness

Trust and confidence is one of the most important elements contributing to e-commerce success in eBay. eBay creates an environment of trust and safety that will allow the users to come back after sales. eBay have a strong security to protect the seller and buyer confidential private about their account and password by the federal government such as paypal security key, OnGuard Online and etc. It is make customer more confidence and rely to their product and service. Therefore, all sellers who might start the business in eBay website should have the license follow with the law in their country. It will be make buyer more comfortable and trusty about the seller product during the auction bid started.



Easy and convenient navigation
Last but not least, to creation of eBay homepage make life simply as it provide easy navigation. eBay designs homepage that ease the customers by providing different categories of products as well as new products recommendation. Users just need to select their items purchases, simply clicking on the product, the design of the webpage will bring customer to other sites of the products. Users’ friendly webpage allows customers to view on details and explanation on the products before making purchases.

History and Evolution of E-Commerce

HISTORY OF E-COMMERCE

E-commerce can be defined as the action of selling, buying, transferring or exchanging goods, visuals and services using the Internet. The history of ecommerce dates back to the invention of the very old notion of “sell and buy”, electricity, cables, computers, modems, and the Internet. Originally, electronic commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) which both introduced in 1970s, its allowed businesses to send commercial document like purchase order or invoices electronically. Thousands of businesses have taken up residence at web sites since the e-commerce existed.

EVOLUTION OF E-COMMERCE

E-commerce had been grown to be multi billion industry through out the year.

1984
Electronic data interchange (EDI) was standardized through ASC X12. This guaranteed that companies would able to complete transactions with one another reliably. For example, it allowed business companies and organization send commercial documentation electronically.

1992
In this year, many online retail products were introduced to customer by Compuserve This gives people the first chance to buy things off their computer. Customer can choose and buy based on their preference in Compuserve website: http://webcenters.netscape.compuserve.com/menu/default.jsp

1994
Netscape browser arrived. Netscape allowed users a to surf the Internet and a safe online transaction technology called Secure Sockets Layer. As the time goes on, the browser is upgrading until Nescape Navigator 9 which provide more function to users.

1995
When we talk about e-commerce, we can’t miss up Amazon.com and also eBay.com. The founding father of e-commerce was launched Amazon.com and eBay.com in this year. This two website provides us a lot of thing such as books, cloth, glossary and so on. Besides that, it allows users to bid for the product they need.

1998
DSL, or Digital Subscriber Line, provides fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money, online.

1999
From the research according to Business.com, retail spending over the Internet reaches $20 billion..

2000
The extended of moratorium on Internet taxes by the U.S government until at least 2005.


Here the video of the evolution of ecommerce:



http://www.youtube.com/watch?v=LW4X3b_j0eE