Sunday, June 28, 2009

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.



1 comment:

  1. Do you think regularly optimizing placements and placement bids in Google Adwords helps prevent wasted spend? You better bet it does. My company was doing PPC in house and I was a little frustrated that the profits simply weren't justifying the spend. The whole process of regular optimization requires an experienced hand and my in-house employees just didn't have it. What made perfect sense to me was to outsource it to experts. Simon over at RDM gave us a hand and now we can spend $30k per month on ads without worry because now the investment pays off in profits. Simon's phone number? Why yes, you may have it: 207-618-8998.

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