Revenue Model for Google, Amazon.com and eBay

A revenue model is a way to generate revenues, like charging your customers or advertising. The revenue model has little to do with the reasons why a business will eventually succeed or fail. This is the time to introduce the revenue models for Google, Amazon.com and eBay to everyone.

Revenue Model for Google

Actually, Google has various types of revenue model, such as and Pay per Click Advertising to as well as AdSense, AdWords, which are helping Google to make profit through the advertisement fees and allow those advertisers to promote their latest products or services in the google web page.

AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of one title line and two content text lines. Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes.

Pay per Click Advertising is the best way to send immediate, targeted traffic to your website. It is an online advertising payment model in which payment is based on qualifying click-throughs. An advertiser has to pay every time his ad receives a click. The Advertisers decide the keywords relevant to their offer that should display their ad and the maximum amount they are willing to pay per click for that keyword. This function is a very useful function and will continue to bring about an increase in income especially if the number of people clicking on these ads increase. However, Google should take care that this function is not misused. There might be and increase in click frauds when manipulation of search results are not dealt with properly.

AdSense is an advertisement application run by Google. Website owners can enroll in this program to enable text, image, and more recently, video advertisements on their websites.

Revenue model for Amazon.com

Amazon. Com is one of the most successful e-commerce providers in which its income are mostly generated from transaction fees, affiliate fees and subscription fees. Amazon started as an online bookstore, but soon diversified its product lines from DVD to food..Moreover, Amazon.com also generates revenue by Affiliate revenue model. Amazon was one of the first online businesses to set up an affiliate marketing program. AStore is an Amazon.com affiliate 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. 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 and ranges from 4% to 10% of the product price.



Revenue model for ebay

eBay does not have inventory like Amazon.com. It only provides technology platforms and tools for e-commerce. ebay has various revenue model, it earns transaction fee from owning paypal, an online paying service system for users to buy items online more conveniently. ebay also gains sales from the service of listing customer’s product to be sold to other users as well as some advertisement fee. ebay generated overall revenue around $6 billion from its three primary business: auctions, payments (PayPal) and communication (Skype).

History and evolution of e-commerce

First and foremost, e-commerce also called as electronic-commerce which is the process of buying, selling, transferring, or exchanging products, services and/or information via computer network

Actually, e-commerce arises because of the development of the Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange business information and do transactions electronically. Furthermore, As the World-Wide-Web(WWW) was also existed has made the e-commerce growth up among the global.

In the 1960s, the businessmen commenced realizing that many documents they exchange related to the shipping of goods – for instance bills of lading purchase order and all the daily transactions. The traditional boundaries will soon replaced with a whole new technology as well as a mechanism and media for purchasing goods and services

During the year 1994, Netscape arrived which is providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layers. The different types of e-commerce that we are used until today, for example, Amazon.com and eBay.com has started in 1995. E-commerce also quite useful and popular in different industries, for instance, banks have been using electronic funds transfer (EFT, also called wire transfer), which are electronic transmissions of account exchange information over private communication network

In 1999, during the first generation of E-commerce boom, B2C (Business to Consumer) models have been tried and tested but the newer trends are toward B2B (Business to Business) and Click-and-Mortar models. According to all available data, ecommerce sales continued to grow in the next few years and, by the third quarter of 2008, ecommerce sales accounted for 3.4 percent of total sales. According to the this website:

http://www.census.gov/mrts/www/data/html/08Q3.html

An example of an E-Commerce success and its causes

A successful implementation of e-commerce company we have chosen is CrazedPaintball from United States. The company business is to sell paintball sports utilities to the sport enthusiasts either amateurs or professionals. The shop was operated in 2004 by Ryan Caberra who was a 22 year old entrepreneur. Ryan had always wanted a website that is easy to navigate and understand. To make the purchasing easy and time saving, Ryan added a shopping cart which is also user-friendly to customers who intend to purchase the goods online. CrazedPaintball’s shopping cart is advanced from other business’s because it has many tools that others do not have.

Other than that, to make the business more exposed to public through online Ryan added link advertising in his website. This method has generated more traffic through important sites like search engines. CrazedPaintball also know their target audiences right by targeting those who love shooting games such as Counter Strikes and Medal of Honour. Ryan post the advertise on some hot shooting game forum to attract customers to have a view on CrazedPaintball website.

Other tools Crazed Paintball involved in are Monster business forum and Monster marketplaces. The forum is a tool their company can use to learn about many typical mistakes that are overlooked much of the time, but are easily fixed with simple instructions from technical specialists. With the use of marketplace, the company has reached new height in profit with more business reputation gained through online. There are also discussion of the paintball game on the forum and a form of customer services are provided to solve customers’ questions.

Ryan is now the owner of the successful e-commerce business with the implementation of those methods, not only from financial prospective but also from the feedback gained from customers.

Discuss how E-commerce can reduce cycle time, improve employee’s empowerment and facilitate customer support?

• REDUCE CYCLE TIME

World changing rapidly and everyone strive to minimum the total time spend for every transaction. Supply chain management show a list of importance and significance of reducing cycle time needed in business field. Cycle time in others form means the amount of time taken to complete a business transaction. For example a process of purchase order, delivery goods, reach customer. E-commerce able to reduce cycle time by eliminates the few steps in traditional business process and it takes shorter time to complete a business transaction. E-commerce also able to reduce cycle time by eliminates the time taken to process in between supplier, intermediaries and customer. It shorten order cycle time to increase competitive advantage, decrease carrying costs, decrease shrinkage costs and improve cash flow. It decreases the amount of time necessary for a customer to receive an order after it placed. For example Dell Company is using Just In Time (JIT) strategy.

• IMPROVE EMPLOYEES’ EMPOWERMENT

E-commerce able to improve employee’s empowerment by electronic-data-interchange (EDI) which enables the employees to have freedom and authority to access in transaction system, transparency barrier between employee and customer is clear cut. Employee in charge can have more understanding on the business and the transaction and provide relevant feedback to customer. Employee can do their job independently without supervision. Employees who work in these circumstances are more productivity rather than those who work under tight supervise. And freedom at workplace can increase their motivation to perform better.

• FACILITATE CUSTOMER SUPPORT

Customer demands are increase from day to day. They require more efficiency ways of dealing with their daily demand. Ordinary customer required more than what the web page provide, they required immediate response for their request. So, quality of services is much more emphasize nowadays compare with the physical product. Share database in between the employee is crucial for further follow up process where they can obtain customer profile and information in order to solve their problem.

Firms are encouraged to provide Graphic-user-interface (GUI) enables the user to view and to order the product. Firm can provide some information and brief summary of their product through picture or video to clarify to customers about the product. Firms need a better prospect to recognize the customer changing trends and demands. Hence, a well define feedback of the services and products are essential for company long term improvement.

An example of an E-Commerce failure and its causes

There are many failure examples of e-commerce. One of the example is eToys. eToys was overextending with development of market share before they considered profits. eToys’ business model did not utilize the specific advantages the Internet offered and ultimately ran up a debt that was huge in amount. Furthermore, eToys believed the popular philosophy of the time that Internet companies were not susceptible to traditional business metrics of profit and loss that they could devote every resource towards “getting big fast”.

eToys had taken a series of risks and made some unsuited decisions in terms of capital resources and the amount of debt that would be able to make good on in the future. The company rushed to expand and shout about themselves at every opportunity. Huge and expensive advertising campaigns and expansion were the core activities of company to be the first visible company in the market. For example, eToys decided to enter the new market of baby-oriented products in 1999 and acquired BabyCenter, Inc., a web-based community offering baby products and information content for parents. It required the integration of distribution and customer service operations and required funds that eToys had to take out of its borrowings. It does not make logical sense that eToys was still trying to improve its website and distribution system and still trying to promote its brand name and build market awareness although eToys was still operating at a loss at this time.

In February 1999, eToys immensely increased the inventory, logistics, costly brand promotion, and establishment of international facilities with the purpose of expanding business into European market with the inception of etoys.co.uk and purchase of a subsidiary in the Netherlands, as well as added service to Canada.

Another mistake that eToys made which lead to its failure is that they failed to realize the highly seasonal and fluctuating nature of demand in their industry and how this would affect their rate of growth. In overestimating their demand, they failed to account for the fact that to get lots of people buying online, it would take time because it required a systems innovation in the way people thought about their lifestyles and modes of business. The fact is that “more people today are buying online, but most aren’t,” and eToys’ success was predicated on the fact that eventually holiday shoppers would go online instead of going to the stores but it never happened quick enough to keep up with their costs.

introduction- Bong Ying Jie

Hi my name is Bong Ying Jie and everyone can call me Ah Jie. Jack is my English name but not many people know this yet. I am now 21 years old and currently having last year study Accounting at Sg. Long UTAR campus. Kuching, Sarawak is where I come from. I enjoy watching movie and listening hits songs. I also love eating and I get bad mood when seriously hungry.

My favourite pet will be cats and I cannot keep my eyes off them everytime I see any stray cats around me. I enjoy playing with them too but of course I will wash my hands after that. I consider myself a person who is quite hygienic since I got a habit that’s washing hand whenever I feel greasy. I am also a quiet person who seldom talks and always remain silence except there is need for me to talk. However, I enjoy the time hanging out with friends especially playing Dota with my classmates.^^ Even though my skills at playing DOTA sucks but our team will always be the winner because of my “pro” teammates. Thanks to them a lot in spending time in Dota with me. That makes my life in UTAR meaningful a bit. LoLs.

Lastly, the five websites I visited the most recently are as below:

a) http://www.hotmail.com/ to check my mails

b) http://www.haoting.com/ to get me updated with the latest songs in markets

c) http://www.utar.edu.my/ to search to articles for assignment purposes

d) http://www.google.com/ whenever I need to find out something I do not know I will google

e) http://www.friendster.com/ to make friends from different places and keep in touch with friends who seldom meet.

ehong is available in e-commerce now!

I am LEE YIK HONG, nick name is e-hong. My birth place is full of flowers and siew pau. ya, you are right, it is seremban. I am a short guy but strong enough. Hehe! Dating beautiful girls are my routine life, and rejecting cute guys is also a routine job for me. I like to do something whatever that I have not tried before. For example, emm… cannot tell you la, you guess yourself. Furthermore, my favourite is to tell grandma story to those new meet friends. They usually stay away from me because they like to listen grandpa’s story more than grandma. I am 23 years old this year, my grandma is 70 something. I love my grandparents very much because they love me very much also. I was the best athlete in Negeri Sembilan in year 1998, a long time ago la. Now I am busy with my study. Due to stress reason, my weight is increasing every month, each month 2kg. I think I will become 137kg(before enter UTAR is 65kg)when I graduate. My favourite 5 websites that I visit the most are http://www.google.com/, http://www.utar.edu.my/, http://www.friendster.com/. http://www.4d2u.com/, http://www.dotastrategy.com/. The reason I visit http://www.google.com/ most is because I need to search a lot of things during my life especially in UTAR life. The next is http://www.utar.edu.my/ because I need to check my results, timetable and any announcements. The website which I can meet a lot of friends and know their current life is http://www.friendster.com/. The fourth one is actually not my favourite website but my mother. She always asks me visit http://www.4d2u.com/ to see her results, LOTTERY results!!! Last but not least, http://www.dotastrategy.com/ is a fun place where provides many games here. I will visit this website whenever I feel bored and have nothing to do. I used to utilize internet for the purpose of chatting with friends, seeing the news from all over the world, playing games online, downloading music and video and searching some funny stuff from web.

The Vermillion Bird of the South (Wong Wai Jun)

Hello, everybody! Thank you for giving me this opportunity to introduce myself. My name is Wong Wai Jun or called me as Thomas who is a year 3 semesters 1 student from accounting course in Utar. I shall be working with Yik Hong, Wei Lun as well as Ying Jie to complete this e-commerce assignment for around these few weeks. We are just like the 4 symbols of Chinese constellations, Yik hong is The Azure Dragon of the East, Wei Lun is The White Tiger of the West, Ying Jie is The White Tiger of the West as well as me is The Vermillion Bird of the South who are performed our own task perfectly

That is a quite challenge semester for me as I want to try my best to do every assignments, tasks and duties perfectly as possible in order to achieve my target, dreams and everything. So that, everybody, do not give up easily in any difficulty situations.

My internet activities are find the information for doing the assignments, read the news, listen music, discuss the assignments through the MSN messenger as well as to check the economic condition currently

It is time to let me share my top 5 most visited website with you guys

http://www.investorguide.com/

To understand and clear about the economic condition, especially the financial crisis which is happened currently.

http://www.youtube.com/

To know more about innovative and creative ideas to complete a task, such as the ways of egg-drop project, how to create an attractive advertisements.

http://www.google.com/

To search the information for my assignments, final year projects

http://www.merdekareview.com/

To know the latest news about the social, politics’ problem

http://www.thestar.com.my/

To know the news and improve my English language, especially: mind our language

introduction- Yip Wei Lun

My name is Yip Wei Lun and everybody call me Allen. I’m 22 years old this year and of course I’m male. I’m from Batu Gajah, Perak but I already move to Mahkota Cheras since form 2.

My hobby is listening to music especially for that R&B bombastic music, because I like the bass heart attack feeling. Recently I was poison by my classmate in photography, I very admire those they have DSLR for themselves. Well… I was saving money to get myself a unit.

I trust that everyone have their own style and own way. As well as for me, I always dream to have rich life for my future day. So after form 5, my daily lives are busy with study, working life to support my own daily expenses. And I hope to have my own business in the future and get myself a luxury car instead of proton car that I driving right now. ^^

The few web sites tat I visit the most:-

a) forum.lowyat.net
(http://forum.lowyat.net/index.php?showtopic=340593&hl= ) – one of the way that I try to earn some extra income. And able to get more information about software and check latest price in garage sales.

b) www.zerotohundred.com – just to read some latest information about automotive.

c) www.friendster.com – always check message for making new friend. But too bad, no one message me one. T.T

d) www.photokaki.com – to update some photography knowledge and I was very tempting about the DSLR camera shot picture quality.

e) www.cari.com.my – to update some knowledge in every section in forum talk.