Friday, June 19, 2009

Identify and Compare The Revenue Model for Google, Amazon.com and eBay

Google are making profits from its multi services such as function of AdWords that allow advertiser to present advertisement to the people, advertising fees, Google Adsense where it allows users to earn money quick and easy by placing ads on their web sites. The solution is based on the pay per click procedure because it automatically transfers a certain amount of money into the owner's account every time a user clicks on the advertisement. Google's revenue jumps to $5.70 Billion in the forth quarter of 2008.


Google is among the essential tools or equipment we use when we surf the Internet. Google acquire some of the major player in the online industry like YouTube the leader of online video server and Google are making profit out of it. Google keeps on expanding their services like providing Google Maps, Google News and several other services like Blogger where it is the blog service developed to help users post and comment articles wrote by numerous authors.

Meanwhile, eBay Inc. is the world’s largest online marketplace where people can actually sell anything that they can think of. One of the principle sources of eBay’s revenue is the fees it charges to sellers for listing their items on the site for auction and it is called the insertion fee where it is based on the starting price of the item and its category. Besides that, eBay also charges for upgraded listing features, such as additional picture and higher ranking in search results.

But that is not the end of the story, the largest chunk of eBay’s revenue comes from taking a percentage of the final value of each successfully auctioned item. In other word, the higher the closing price of a sold item the more eBay will get from the percentage of the value sold. Other than that, eBay acquired Skype, the world’s fastest-growing internet communication company, where it generates revenue through its premium offering such as call that uses its own software from landline to mobile phones, voicemail, call forwarding, ringtones and other offerings.

On the other hand, it is different kind of revenue model for Amazon.com. It transformed itself from a specialty retailer of selling books into an online shopping portal which set itself up as a mediator between buyer and seller. It started selling products from companies such as Toys “R” Us, Target and many other companies on its web site. Besides that, Amazon.com continues to offer discounts on merchandise, offering consumers personalised daily deals on everything from kitchenware to computer hardware and also for customers who spend more than $25 on Amazon.com qualify for free shipping and this attracts people to buy from Amazon.com.

In 2003, Amazon unveils a new technology called “Search Inside the Book” that allows consumers to preview text of 120 000 books before deciding wanted to buy or not. Amazon lets customers submit their feedback of the books and other product so that they can share their thoughts with other users. Moreover, Amazon launched zShops services where it charges merchant a monthly fee to sell their products or item on the web site. A merchant who sell their products through zShops pay Amazon a monthly fee of $39.99 and a closing fee of 5% on items sold for $25 or less.

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