Sunday, February 15, 2009

Identify and compare the revenue model for Google, Amazon.com and eBay.

Revenue model is describing on how a firm earns revenue, generates profit and produce a superior return on invested capital.

Google is practicing an advertising revenue model. where it serves as a Web site that offers its users content, services and products, or provides a forum for advertisements and receives fees from the advertisers. Google website is able to attract the greatest viewership or that have a higher specialized, differentiated viewership and are able to retain user attention, in other word, to provide "stickiness". Thus, it is able to charge higher advertising rates. Google derives significant amount of revenue from selling advertising such as banner ads. For instances, The principal products and services provided is Google AdWords, which is a pay-per-click advertising program. Google designed it to allow the advertisers to present advertisements to people at the instant the people are looking for information related to what the advertiser has to offer.

Amazon.com is using the sales revenue model. the company derive revenue by selling goods, information, or services to customers. Amazon.com sells books, music and other products such as toys, wireless phones, cameras, and video games to consumers. Typically, Amazon.com is a B2C (Business to Consumer) e-commerce in which business sells already manufactured products to the consumers directly on the Internet. Books are listed under different sections for ease of searching. Besides, a search facility is available for searching books according to user input. Besides, Amazon.com also make use of data mining techniques to promote the selling of books. Later, books are sent by mail or courier, whichever the customer prefers.

eBay is a company practicing the transaction fee revenue model. eBay receive a fee for enabling or executing a transaction. eBay provides the world's largest online trading service by means of online auction. It creates an online auction marketplace and receive a small transaction fee from seller if the seller is successful in selling the item.







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