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

E-Commerce?!

Hey, do you know what E-Commerce is? I guess some of you might say yes and some might say no, but it is just ok if you know any about e-commerce and also even you do not know any about it. Today I want to share with you all something about what e-commerce is, and also the history and evolution of it. It might be not an interesting story, but, please be patient and follow me to step in depth into e-commerce world and learn more about it!

What is E-Commerce?

E-commerce, a new path of business model superior in terms of efficiency, productivity, profitability and competitiveness which available to all sizes of business and also known as Electronic Commerce in full term. It is generally the “in” thing today which conducts real time business transactions in a “borderless world” 24 hours a day, 7 days a week, for example, Amazon.com, AirAsia.com etc.

It is electronic trading which commonly involved the process of marketing, buying, selling or exchanging products, services and information through the Internet via the computer between parties to transact business. The parties involved in e-commerce can be individuals, organizations or both by using international networked computers to do electronic transactions which involve the transfer of ownership or rights to use a good or service or to create and transform business relationships.

Apart from that, e-commerce also used to transfer and share information within organizations through Intranets in order to improve decision making process without wasting money, time and effort. The new pattern of e-commerce nowadays is not just concerned on transactions but also on building new relationships, sustaining and improving relationships, both existing and potential to the business and also extensions of networks and webs of activities.

The four common categories of e-commerce are Business-To-Business (B2B), Business-To-Consumer (B2C), and Business-To-Government (B2G) and Business-To-Employees (B2E).

The History and Evolution of…

All commerce was carried out face-to-face or via the mails before e-commerce appears to be common. E-commerce began a time before personal computers were common and has grown into a multi-billion dollar industry. Now, just let me give you a brief picture about the history and evolution of e-commerce.

In the early of 1970s, e-commerce applications were first developed with innovation such as EFT, or electronic funds transfer which funds could be routed electronically from one organization to another. However, the extent of the applications was limited to large corporations, financial institutions, and some other daring businesses.

In 1984, electronic data interchange (EDI), a technology used to transfer routine documents electronically which expanded electronic transfers from financial transactions to other types of transaction processing such as ordering. EDI has enlarged the pool of participating companies from financial institutions to manufacturers, services and variety of businesses. At the same time, EDI was standardized through ASC X12 and this guaranteed that companies would be able to complete transactions with one another reliably. Then, more electronic commerce applications followed, ranging from travel reservation systems such as American Airlines to stock trading. Such systems were called interorganisational system (IOS) applications, and their strategic value to businesses has been widely recognized.

In the early 1990s, Internet has been commercialized and users began to participate in the World Wide Web (WWW) and electronic commerce applications start rapidly expanded. In the year of 1992, CompuServe offers online retail products to its customers and this gives people the first chance to buy things off their computer. Netscape arrived at 1994 and providing Internet users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer. Internet users have observed the development of many innovative applications ranging from online direct selling to e-learning since 1995 and two of the biggest names in e-commerce are launched at the year, that are Amazon.com and eBay.com.

In 1998, DSL, or Digital Subscriber Line provides fast and always-on Internet service to subscribers across California, USA. This prompts people to spend more time and money to go online. The emphasis of e-commerce shifted from B2C to B2B in 1999 and from B2B to B2E, collaborative commerce (c-commerce), e-government, e-learning, and mobile commerce (m-commerce) in 2001.

With the more and more competitive global market currently, it is extremely important for businesses to embrace the latest methods and trends to conduct their businesses. With the advancement of technology, especially the Internet, e-commerce has become common and widely spread in business world today and tomorrow in order to generate profits in a more efficient manner. Thus it is not surprised that there will be continuing grow of e-commerce in the future.

Huh, finally… ^^:::

Yup, I has finished my long winded story about e-commerce finally and hope that everyone who reading this gained something new throughout the previous parts. Thank you for spending time with me here, ciao! =D

More about E-Commerce

~SiuLing~

An example of an E-Commerce success and its causes

E-commerce is getting more widely used nowadays. There are many examples of E-Commerce success and Google is one of them. Google was launched in 1998 ago by Sergey Brin and Larry Page. The mission of Google is to organize the world’s information and make it universally accessible and useful. Google is one of the world’s largest search engines that many people choose to search for information needed. It is easy to use and it is free of charge.

Google has become so successful because of some reasons. Google focuses on user satisfaction. It provides services that are easy to use and benefits the users. Google’s AdWords and AdSense are two of the Google Advertising Programs. AdWords is for advertisers to advertise their business on Google. Thousands of advertisers use it to promote their products and services on the web with targeted advertising. AdWords enables an advertiser to reach new customers by having his ads appear when people search Google and its advertising network. It reaches people when they are looking for information about products and services offered online by the advertisers, and the advertisers will only pay when people click on their ads.

AdSense is for web publishers to enhance their websites. Web publishers can earn more revenue with minimal effort and no additional cost from their websites by using Google AdSense which delivers text and image ads that are precisely targeted to their sites and matches ads to their sites’ content. Web publishers earn money whenever visitors click on them. With the acquisition of YouTube by Google, selected video clips will be shown across the AdSense network, along with advertising that helps to earn revenue.

Google Toolbar adds a search box to the browser. It helps to search faster and smarter with instant suggestions when you type anything you want to search in the search box. You can add buttons for your favourite sites to the Toolbar, bookmark pages that frequently visit, and share web pages with friends through email, blog or SMS. Google Toolbar also helps to block pop-ups, translate pages into English instantly, and correct spelling mistakes in your webmail.

Google also provides mail service which is known as Gmail. It is free service from Google. Google Apps help business to communicate better with Google Mail and more. Google Apps gives everyone in a company a custom email address, tools for word processing, spreadsheets and presentations, a shared calendaring system and access to a flexible intranet system.

Other than these, Google provides many other services for the users such as Book Search, University Search, News Search, Image Search, and others. We can also search for journal articles using Google for the purpose of education.

Besides, users love the simplicity of Google and the results provided. The design of Google’s homepage is very simple to enable the pages to be loaded faster. Users can get the information they need easier and faster, and it saves time.

Google’s success also depends on its focus on a product designed for real users and a strong vision about information access. Moreover, Google took hiring of employees seriously. They hire the right people to work for them. Google also has flat organizational structure which contributes to its success. These features of Google are the reasons why it succeeds in E-Commerce and preferably be used widely over the world.

How E-commerce reduce cycle time, facilitate customer support and improve employee's empowerment?

Due to the advancement of technology in today’s 21 century, the traditional form of trading has been replaced by the growth of internet.

Most of the companies are using internet to carry out their business activities which is E-commerce. With the use of E-commerce, the manufacturers may be able to reduce time cycle. How to reduce time cycle? Basically the manufacturers sell their product directly to the buyer through the use of the internet, products are display in the webpage with the description and the price of the products, the buyer can easily click the website and see the products they desire to buy, they do not need a middleman to help them to distribute their products to the retailer and thus, the manufacturers can buy or sell their products directly, and avoiding the cost of middleman. Besides, the manufacturers can also reduce the cost of distribution costs for information.

Moreover, E-commerce can also help to facilitate customer support. Most company provides a 24 hour online customer service such as FAQ section to enable the customer to obtain any information about the company’s product and about the company’s information; the company will reply their enquiry through the internet. Besides, some company may also provide their telephone number to enable the customer to enquire for more details about the information. Through this online customer service, the customer does not need to go to the company and get the information they want, they just need to click on the web page and post the question to the company’s website and the company will reply their question. This service not only save the customer’s time but it also can help the company to retain its customer.

Other than that, E-commerce can also help to improve employees’ empowerment. Employee empowerment basically means that the non-managerial staff can make decision without the consulting of a boss. The customer can directly place an order through the internet, thus it does not need approval from higher manager. This enables the employee to improve their empowerment as they are the one who manage the ordering. Thus, this will increase the productivity of the employee because the employees involve in decision making.