Revenue model for Google, Amazon.com and eBay

Google's revenue model

The major source of Google's yearly revenue is from its online advertising services. Google's advertising revenues model includes Google AdWords, Google AdSense and Froogle. Google AdWords generates more than 90% of Google's revenue.


is a pay per click advertising program. Pay per click is an online advertising payment model in which payment is based on qualifying click-throughs. An advertiser has to pay every time when his ad receives a click. Google Adwords allows advertisers to present advertisements at the same time the people are looking for information related to what the advertiser has to offer. When a user searches Google's search engine, ads for the relevant words are shown as ''sponsored link'' on the right side of the screen or above the main search results.

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.

Amazon.com's revenue model
is one of the largest online retailers of physical goods. Amazon.com is famous in selling variety types of books via internet. Besides that, it also generates revenue from selling other goods which categories by electronics, home and garden, computer and office, sports and outdoors and etc. Amazon.com is establishing sales revenue model and transaction fee revenue model.

For example, Amazon Marketplace is a fixed price online market place that allows sellers to sell their goods alongside those carried by Amazon.com. There are no fees unless the transaction success. This sales strategy has generate profit to Amazon.com when they charge a commission rate and transaction fee on each transaction deal.

Besides that, Amazon.com also establishing affiliate revenue model. Astore is a affiliate marketing program set-up by amazon.com. Astore gives user powers to create a professional online store in minutes and without the needs for programming skills. However, Astore don't allow sellers to sell their products directly. Sellers need to pick products from amazon's store and earn referral fees on products purchase by buyers. The rates currently is range from 4% - 10% of product price.

eBay's revenue model
offers a online marletplace to buyers and sellers to buy and sell goods and services. Ebay generates revenue by charging different fees such as insertion fees, promotional fees and final value fees. Each of these fees is charge on different stages of transaction make through ebay.


Besides that, ebay also generates revenue by sales revenue model from its subsidiary- Half.com. Half.com selling different types of goods which includes books, musics, movies, games and etc.


Furthermore, ebay also generates profits by provide advertising service.

An example of an E-Commerce failure and its causes

Electronic commerce is commonly known as E-commerce. It describes the process of buying, selling, transferring, or exchanging products, services and information via computer network. Nowadays, most of the companies choose to convert their business nature into e-commerce system so called online retailer. However, through e-commerce, some of the online businesses succeed while some are failing due to a number of different factors.


The increasing use of internet by consumers gave rise to an information boom to health-care consumers. For example, DrKoop.net an online provider of medical information for doctors and consumers. DrKoop.net was launched in July 1998 by Donald W.Hackett and John F.Zaccaro. The vision of DrKoop.net is assisting people and their doctors to access personal records, prescriptions history, medical exam results and general health-care information. In order to generate revenue, DrKoop.net started sold advertising rights that would increase sales and to promote their products to the communities. DrKoop.net started off strong, generated revenue of $43000 during the year 1998, however, they didn’t last longer after the year of 1999, and they failed to achieve success and went into bankruptcy eventually.


There are several causes that DrKoop.net fail:

• Lack of organizational structure of cost control due to the founders lack of business experiences.

• The company lack of financing planning. This make them incurred in a big loss when compete with others competitors. The corporation continued to spend their free-spending practices such as employees’ in-house and free lunches, even though the advertising revenue alone could not support the huge amount of operating expenses.

• It is very important in achieving company’s goals. However, the company has an unrealized goals and deviate from their original vision and mission. They were getting focus on the internal growth without adequate planning for future.

• They trying to sell the wrong product online. Since their products are related to health, consumers will have higher expectation and need more confident and demand for approval from some medical institutions. However, it is very difficult to build the trust and brand value to the consumers via internets.

• DrKoop.net is the target of lawsuits. In July 2000, two class-action lawsuits were brought against DrKoop.net due to the withholding financial information in order to increase the stock price and selling of shares before the end of a six months holding period.

• The company has a poor designed of website. Due to the huge amount of losses incurred by the company, they sank into a financial crisis for their trademarks and websites.

Due to the factors above, DrKoop.net fail to do well in their E-commerce system and had displeased their consumers

An example of an E-Commerce success and its causes

In the 21st century, electronic retailing is taking an important role in the business world. We are living through enormous changes from the days when retailing meant as visiting a store or shopping from a printed catalog, until today’s customer can buy their goods and services by just sitting at the home and surfing the web.

Nowadays, there are several company doing online retailing business, the Amazon.com is one of the success and famous pure web retailer in the world. Amazon.com is founded by Jeff Bezos in year 1994, and was launched online in the June 1995 and began service in the following month. The company was originally incorporated in 1994 with principal corporate offices in Seattle, Washington and reincorporated in 1996 in Delaware.


How Amazon.com success?

When Amazon.com first entered into the market, they started out as an online books retailing with wide range of books. When the major book sellers realized this new way of selling books, Amazon was miles ahead. Jeff Bezos surveyed the Internet horizon and embraced the best technology on sight. After that , Amazon changed the way it does business through the year. Amazon not only sell its own items but also helps others businesses sell their own product and services as well. It diversified by adding more product item to different categories, such as VHS tapes and DVDs, music CDs, pet suppliers, computer software, e-cards, video games, electronics, MP3s, clothing, furniture, toys and even food items. A wide range of purchasing choices is one of the reasons for Amazon’s success. Customers can get almost everything by only viewing a website. It is convenient and save their time.

We are generally have to pay sales tax on whatever we buy in the bookstore , clothes store or even the shopping mall. However, Amazon shoppers do not have to pay sales taxes on their purchases in Amazon.com. As a result, Amazon.com can always offer a lower price to its customers and compete with its competitors. Despite of the low price offered, it also makes sure that their products are high quality and provide good services. This is the way Amazon.com can maintain their customers royalty and attract more new buyers.

Beside that, Amazon has had a decade to build up trust and confident between their customer. Others than provide high quality product and service, it also provide more safety and reliable payment system to its customers. Nevertheless, Amazon.com provide guarantee to its product and customer can return their item if they are not satisfy. Amazon.com will make sure their customers product orders are always deliver on time and cheaply enough to keep the customers coming back. In order to building customer royalty and trustworthy are another main key of success of Amazon.com in e-commerce world.

In addition, Amazon.com allow their customer to give their own comment and rating to each product. Those comments will use as a way to improve their weaknesses. The customer experience is one reason for Amazon.com's success. Amazon has been the first online company to provide customers with reminders and tracking of their orders through e-mail alerts. Amazon will also alerts their customers when a price drops or rises, that's been one of the indirect way asking their customer for making a purchase.


Amazon.com becomes rapid growing by continuously making innovation to their business strategies. Today’s, there is approximate tens of millions of customers purchasing goods and services from Amazon.com over the world and its company revenues exceeding to $8 million each of the year. As we can see today, Amazon.com is the most successful e-retailer in the E-commerce world.

References:

http://www.amazon.com/

http://www.truthout.org/article/the-success-amazon-welfare-we-should-know-it

http://www.readwriteweb.com/archives/amazon_web_services_success_stories.php

The history and evolution of E-commerce

WHAT IS E-COMMERCE
Electronic commerce (EC) is the process of electronically buying and selling goods, product, services and information over the Internet. Such as buying and selling stocks and clothes on the internet.

Other than buying and selling, e-commerce also including electronically communicating, collaborating, and discovering information .For instances, e-learning, e-government, social networks, and much more. It brings big effect on a significant portion of the world, affecting businesses, professions, and people.

HISTORY OF E-COMMERCE
The development of EC applications started in the early 1970s with electronic funds transfer (EFT), which refers to the computer-based systems used to perform financial transactions electronically, funds can be routed electronically from one organization to another. However, the use of these applications was limited to financial institutes, large corporations, and some daring businesses.

Electronic data interchange (EDI) was then developed in the late 1970s to ameliorate the limitation of EFT. EDI used to electronically transfer routine documents that expanded electronic transfers from financial transactions to other types of transaction processing.EDI enlarged the pool of participating company from manufacturers, retailers, services, and others.

An Interorganizational System (IOS) which allows the flow of information to be automated between the organizations .It make better manage buyer-supplier relationships by encompassing the full depths of tasks associated with business processes company-wide, reach a desired supply-chain management system. Besides, it reduce the risk instead increase the competitiveness of the organization.

Since the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.

The term ‘electronic commerce’ was coined in the early 1990s when Internet became commercialized and users began participate in the World Wide Web. EC applications were then rapidly expanded.

EVOLUTION OF E-COMMERCE
A good deal of innovative applications since 1995, ranging from direct online sales to e-learning experiences had been developed. Almost every organization in the world has their web site.

In 1999, the emphasis of e-commerce shifted from Business to consumer (B2C) to Business to business (B2B).

In 2001, from B2B to B2E, e-government and e-learning

In 2005, social networks started to rise and so did l-commerce and wireless applications.

Year	Event
1984	EDI, or electronic data interchange, was standardized through ASC X12.It make it became stable and reliable in transferring large amounts of transactions.
1992	Mosaic web-browser was made available; it was the first ‘point and click’ browser. The Mosaic browser was quickly adapted into a downloadable browser CompuServe offers online retail products to its customers. This gives people the first chance to buy things off their computer.
1994	Netscape arrived. Providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer, allowed easier access to electronic commerce.
1995	Two of the biggest names in e-commerce are launched: Amazon.com and eBay.com.
1998	DSL, or Digital Subscriber Line,provides fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money, online.
1999	Retail spending over the Internet reaches $20 billion, according to Business.com.
2000	The U.S government extended the moratorium on Internet taxes until at least 2005.

Today, the largest electronic commerce is Business-to-Business (B2B). Businesses involved in B2B sell their goods to other businesses. Other varieties growing today include Consumer-to-Consumer (C2C) where consumers sell to each other, for example through auction sites. Peer-to-Peer (P2P) is another form of e-commerce that allows users to share resources and files directly.

About Poh Ling

Hi, everybody, nice to meet you all.
My name is Poh Ling , you can just call me Pauline.
I am from Cheras, Kuala Lumpur.
Now, studying Year 3 of the Bachelor of Commerce of Accounting in Sungai Long.
This is the last year of my study life, hope I can enjoy it and successfully graduate next year.
When I leisure , I will always use the internet to online shopping because the items sold on internet are actually cheaper and delivered instantly after my pay.
Sometimes, I even have much more merchandise choices when I am dealing with an international seller like in www.ebay.com.my.

www.catladyfashion.net

www.niceshop.com.my

www.haiyo.com.my

These are few online website that I always browse through to check up good quality term.
This shopping experience actually makes my life fuller when I can get my desired things at a cheaper price instantly and effectively.

Furthermore, I am a gastronome.
Do not matter Chinese food, Malay food, India food, Japanese food, Korea food, Vietnam and so on. My father is a chef; maybe I am genetic from my father, because of him, I always have the opportunity to enjoy the best food.

Lastly, I would like to share to you all my family photo.

From left: my 2 younger sisters , my dad and me.

About Fu Ling

I'm Teo Fu Ling and 20 years old now.
I come from Batu Bahat, Johor.
I studied in SMK Convent which is a government secondary school that located in my hometown.
Now, I am taking Bachelor of Commerce (Hons) Accounting in UTAR, Sungai Long.
There is alot of things I like to spend during my leisure time.
I like listen to music, watch movie, surfing internet and shopping.
I love acoustic drum.
My first ambition was to be a talented drummer since I was young.
Through playing drum, I able to express my feeling and stress during my down time and even sometimes encourage me.
This is a drum set that I wish to have.

Other than music, I am also a movie goer and invited to premier screening of any movie few days before of the actal screening date. Not only I get to watch before hand, I do collect the premier passes which come with professional design printed on a quality card as a movie ticket collector.

I love dogs and puppies. It is because they are always loyalties to their owner. I have a lovely puppy called Doggy. It brings a lot of joys and fun to us and vivid our daily life.

The websites that I always explore are http://www.google.com/ , http://www.hotmail.com/ and our university home page http://www.utar.edu.my/. Other than the previous websites , I could find some fun through internet. For example searching some interesting and funny video clips from http://www.youtube.com/. Besides that, I will also go to http://www.facebook.com/ and http://www.friendster.com/ to get the latest news of my friends. Lastly, I also like online shopping. Through internet I'm able to compare the price and quality from different suppliers and end up with my best decisions.
Finally, I'm just a simple girl who looking for the love of friendship from around the world.

About Siow Ling

Hi, I'm Siow Ling.
This is my first time writting my own blog,
feel that all are very fresh and fun for me.
First, I want to introduce myself,
I'm a normal girl, but sometimes I may very blur and careless.
I come from JB and now studying in UTAR.

I love to listen music, especially Jason Mraz and Mariah Carey's song.
''Lucky'' sing by Jason Mraz and Colbie Cailat is one of my favorite song.



We are very lucky becauce we have a healthy body and a lovely family,
and we are very lucky can stay in this peaceful country.
Please appreciate what you have,
especially your family and your friends.
It is because fate that bring us to link together and know each others.
~'' I LOVE YOU''~ my family and my dear friends.

I have a simple family,
I have a elder sister and a brother,
I am the youngest daughther
Here is my happy family picture

The father's day is coming soon,
~Wish all the fathers ''Happy Father's Day "~

About Yong Ting

Hi everyone,
I am Yong Ting from BAC group13.
I entered UTAR since May of 2008,
before that I was studied in Ktar (Setapak)
for my Diploma in Accounting.
I feel very glad because all my classmate in group 13 was very friendly and helpful person.

The top 3 websites which I was visited the most in my life are:

1) www.facebook.com
I like to visit this website is because there is alot application which is very fun.
These are some of the application that I play everyday.

Pet society
Restaurant City

Happy Farm

2) chinese.cari.com.my
3) www.friendster.com

When I free, I like to shopping, watch movie and sing k.
The restaurant that I like most is a japanese restaurant- Zanmaiwhich located at The Gardens.
It is because it provides variety types of sushi which is very fresh and price was very cheap.
http://supersushi.com.my/

Besides that, I like to go Green Box with my best friends when i feel stress.