Revenue model for Google, Amazon.com and eBay.

A revenue model is used by e-commerce to make money. There are 5 major revenue model includes sales, transaction fees, subscription fees, advertising fees and affiliate fees.

Google

Google is using online advertising space model to generate revenue. Google AdWords is offers PPC advertising program. PPC stand for pay per click determined by people click on the advertisement then only have to pay for one click. It is benefit for control cost and prospects geographically since people looking for information about the products and services online.

Google also have another revenue model which called Google AdSense. It is an advertising serving program. This program able make money through serving AdSense targeted to specific web content and search pages. Website owner enable text and video advertisement. This is same concept as cost per click basis. Advertiser is required to pay Google fees a user click on the advertisement. This is a way that Google AdSense generates revenue. For instance, radio stations gain revenue from advertisement. Google AdSense makes charge from number of viewer whose click on that advertisement. This is counted by number of viewers click on that advertising and taking them to the particular website. This is a way that Google AdSense generates revenue. For instance, radio stations gain revenue from advertisement. Google AdSense makes charge from number of viewer whose click on that advertisement. This is counted by number of viewers click on that advertising and taking them to the particular website.

In addition, Froogle is a price engine website and a service that people easily to search information of the product through sale online.


Amazon.com
Whereas, revenue model for Amazon.com is a direct online sales models. Amazon.com establishes a website as business and directly sells to people entering the store to make a purchase. Customers buy the product through a mail order catalog; therefore, the delivery is always by mail. All products can be delivered to the customers via downloading process.

eBay
One of the revenue models that eBay gain revenue through online commission model. Individual and companies can also be established as affiliates, where they gain commission for sales made through a company using the direct online sales model such as online company- eBay. Google also gain a commission for advertisement placed on others’ websites. eBay is an internet auction site that connects individual buyers and sellers worldwide. eBay also earns transaction fees from payment (PayPal). For fiscal year 2008, eBay generated revenue around $8.5 million which is increased by 11% compare to fiscal year 2007.

Reference:

http://www.school-for-champions.com/ecommerce/business_models.htm

http://www.organicspam.com/google_revenue_model.asp

http://www.google.com/products?q=froogle&aq=f

http://www.wikinvest.com/stock/Amazon.com_(AMZN)

http://www.wikinvest.com/stock/EBay_(EBAY)

An E-Commerce success and its causes

One of the examples of an E-Commerce success is eBay. eBay has been very popular in recent years due to the advancement of technology and IT. According to Pierre Omidyar, a computer programmer who developed eBay, “eBay is the world’s largest online marketplace which offer trade on a worldwide basis at any time.”

eBay is founded in 1995, it has become very well known around the world nowadays and it is a place where visited by hundreds of millions of people every day. It has become very successful because of internet has expanded, people more and more conducted their day to day activities online nowadays.

eBay is tend to have a successful response over the country because it provides a lot of benefits to consumers. We can see that eBay is providing an open trading way to determine the value of items sold. Over the year, people who visiting on eBay website is increasing, one of the reasons is because the website is clearly shown out all the description of the products and providing a view into what objects the consumers want most at any time.

Hence, people tend to visit online store to sell or buy the products they want nowadays. Reason is because it is more convenient and people get to have more variety of choices to choose by just looking at the computer screen. It is save their time where they do not have to walk out from the house and carry all the ways to the physical shops.

Besides that, eBay is using PayPal to process the payment. It allows people to send and receive payments online easily and securely. The process is faster than you go to the bank to do the transferring of money.


Thus, eBay is enable people around the world to enjoy and familiar connected to each other to buy or sell the product they want at a fair price. Consumers will feel comfortable to bargain at the price and they are getting a good price if the bargaining success. Then consumers only have to pay the product and the transportation fees and will receive the product in a short time.

Moreover, the reason they are success is because of eBay community that they set up. The features in eBay community like discussion boards, chat board, forum and feedback leaved back customer allowed the buyer and seller to form a meaningful relationships. Through this, satisfied consumers will always come back to eBay for another trade.

Last but not least, eBay success is also due to their trusted and effective services they provided for their seller and customer. By having trust and favorable feedbacks from the consumers, eBay will do changes and updating according to their needs. Thus, its will eventually getting more and more people visit on eBay to trade.

Reference:

http://news.ebay.com/about.cfm

http://www.ecommercetimes.com/story/2127.html

The History and Evolution of E-Commerce

Electronic Commerce is a type of business model and enables people buying, selling, transferring, or exchanging products, services or information via computer networks such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange business information and do electronic transactions. The ability to use these technologies appeared in the late 1970s and allowed business companies and organizations to send commercial documentation electronically.

However, in 1984 the Accredited Standards Committee (ASC) X12 develops standards for cross-industry electronic exchange of business information. These standards became stable and reliable in transferring large amounts of transactions.

In the early 1990s, when the internet was opened to commercial use and users began participate in the World Wide Web (WWW), e-commerce application rapidly expanded so that a large number of dot-com also appeared.

In year 1992, one of a America website name Compuserve has offers online retail products to its customers. This gives people the first chance to buy things off their computer.

During year 1994, Marc Andreessen began the creation of a browser by the name of Mosaic which was then adapted into the Netscape browser. It providing users a simple browser to surf the internet and a safe online transaction technology called Secure Sockets Layer.

History of ecommerce is unthinkable without Amazon and Ebay which were among the first Internet companies to allow electronic transactions in the year 1995. Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and Hewlett Packard. One more company which has contributed much to the process of ecommerce development is Dell. The company’s unique strategy of selling goods over the World Wide Web with no retail outlets and no middlemen has been admired by a lot of customers and imitated by a great number of ecommerce businesses. The key factor of Dell’s success is that Dell.com enables customers to choose and to control.

In year 1998, development of security protocols such as HTTP and Digital Subsciber Line (DSL) which allowed rapid access and a persistent connection to the internet. In fact, people will spend more time online. In year 1999, the e-commerce shifted from business-to-consumer to business-to-business. According to Business.com, Retail spending over the Internet reaches $20 billion.

In year 2000, there is a dot-com burst and make numbers of e-commerce companies shut down. Not only that, it created a stock market bubble (in financial markets term applied to arise or boom in the share prices of stocks of a particular industry). The bubble caused an overvaluation of the company.

In year 2001, the e-commerce shifted from business-to-business to business-to-exchange. After the dot-com collapse in the end of 2001, people learn from failure and make the largest from e-commerce, B2B model had around $700 billion in transaction.

Links:

http://newmedia.medill.northwestern.edu/courses/nmpspring01/brown/Revstream/history.htm

http://wiki.media-culture.org.au/index.php/E-Commerce

http://iml.jou.ufl.edu/projects/fall01/hanson/

An E-commerce failure and its causes

Egghead.com was an example of the e-commerce failure. It was a computer software retail company which founded by Victor Alhadeff in 1984. However, due to competition from mass merchandisers had forced the company to re-evaluate its strategy. In 1998, the company focuses online business, closing its retail shop and selling through Egghead.com website. After re-strategy the business, the company decides to sell its products via Internet, phone and catalogue. In 2000, the Egghead merged with online auctioneer OnSale.com. However, the company was hurt by December 2000 exposure that hackers had accessed its systems and potentially concession customer credit card data. The company gets into bankruptcy in August 2001. After a deal to sell the company to Fry’s Electronics for $10 million and its assets were purchased by Amazon.com for $6.1 million.

The main cause the company got into bankruptcy was the credit card heist. In December 2000, that a cyber-criminal had broken into its systems and customers’ information might be disclosed to public. However, the CEO of the company declared that private information wasn’t stolen during the infiltrated. In truth, the hacker might steal the credit card detail of 3.6 million customers from the Egghead.com network. Moreover, near the Christmas season, the handling of the breach by publicly refuse that there was a problem, then notify by Visa Company, who in turn notified banks and customers that the credit, caused the breach to rise into a full blown scandal. There Creditcard.com confirmed that its security was compromise when credit card numbers were posted on the web. There were processes credit transactions for online companies and posted some credit card numbers after a failed blackmail attempt. The FBI has been investigation the incident and found that was mysterious charges of US$10 to US$18 have been made on some of the cards by a Moscow based firm.

Secondly, Egghead was suffered a deep decline in sales and forced the bankruptcy filing and assets sales. Although Egghead had PC software sales experience than others retailers, they were nevertheless out-resourced and taken over by the publicly traded giant Amozon.com. Egghead lost $4.7 million on $59 million in revenue. Although the net loss was improvement from the $17.7 million the company loss in the second quarter of 2000, Egghead’s revenue was down 53% from previous year and decrease 29% from the first quarter of 2001. Sales were not enough to cover up the loss, sustain the business from the competitors and the company went into bankruptcy.

In my opinion, the Egghead had give some guidance the company which wish to launch e-commerce. The main concern when a company launch e-commerce website is the website should be design well. So the user can do not worry during shop online especially how safe is their personal information.

Related Link:

http://en.wikipedia.org/wiki/Egghead.com

http://www.internetnews.com/dev-news/article.php/10_543591

http://news.zdnet.com/2100-9595_22-112935.html

http://www.theregister.co.uk/2001/04/27/egghead_credit_card_hack_serious/

http://www.emergency.com/2000/cc-stolen.htm

http://news.cnet.com/Egghead-to-file-for-bankruptcy/2100-1017_3-271685.html?tag=mncol

http://www.ecommercetimes.com/story/6286.html

Soy Foong Wan

My name is Soy Foong Wan. I am currently pursuing accounting degree in Universiti Tunku Abdul Rahman. The main objective for setting up this blog is for the e-commerce assignment. I love to spend my spare time on swimming, playing badminton and readings.

One of the top 5 websites I used to visit is www.wble.utar.edu.my where I get to download all the study materials and get to know the latest announcement made from the lecturer. Secondly, I often visit www.facebook.com where I get to keep in touch and get the latest information of my friends. Moreover, I used to visit www.youtube.com to watch and listen to the latest movie and music to spend my free time. Furthermore, I will access to www.pps.tv.com where I can enjoy watching dramas and movies. Besides from going online for entertainment, I also visited www.chinapress.com.my to update myself with the latest news in the world and in our country.

Hence, I also quite aggressively to go online for online shopping which I feels it is very convenient and there is much more variety of product for me to choose by looking only at the monitor screen. Lastly, I also have a habit to visit Golden Screen Cinema website to watch the trailer of the latest movie before I go into the cinema.