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Saturday, June 14, 2008

Revenue Model of Google, eBay and Amazon.com

These three online shopping websites are internationally well-known and do earn a lot through the application of several types of business model. What kind o f revenue model they are using in generating their profits? For your information, there are 5 major revenue models in this information technology business environment which are sales, transaction fees, subscription fees, advertising fees, affiliate fees, and some other revenue sources.


Google is an American public corporation, earning revenue from advertising related to its Internet search, web-based email, video sharing and so on. Google is heavily adopting advertising fees revenue model and thus most of its revenue is derived from advertising programs. Its principal advertising services include the Google AdWords, Google Adsense, Google Answers, Froogle and so on. Google Adwords is a per click advertising program which allows web advertisers to display advertisements in the ride side of researchers’ search results. Besides, Google AdSense allows web advertisers to enroll text, image, and video advertisement in Google’s search results and other Google related websites. You may view the following demo on how to generate a Google Ad Code at .An advertiser has to pay every time his advertisement has been clicked by an interested result searcher.




Example of Google Adwords which allow the advertiser to display their advertisement when people are looking for information related to what the advertiser has to offer


eBay.com is owned by eBay Inc and is an online auction and shopping website in which people could sell and buy good and service online internationally. It provides the pathway for people to sell and bid for the item that they wish to posses. In another word, it applying the transaction fees revenue model; acts as broker between and seller and buyer and generate its revenue (commission) for each successful transaction. In addition, eBay also generate its revenue through advertising fees model by provide the advertisement mechanism in their website by charging the advertisers fees of listing an item, banner or advertisement. However, the major source of income of eBay is from its online auction services.



The difference between Amazon.com and eBay is where Amazon.com owned it inventories and constitute sales in its website. While eBay do not poses any inventory for selling purpose. Amazon operates retail websites and also provides programs that enable third party the opportunity to sell their products or services on its web sites internationally. The primary source of its revenue is selling of wide range of products and services to its customer which is primarily based on the sales revenue model. Besides, Amazon.com also applying the transaction revenue model as they receive the commissions when the third party manage to sell their product through the program provided by Amazon.com. You may explore further by clicking the money icon below if you are interested to sell your stuffs at Amazon.com



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