Thursday, June 12, 2008

Revenue models of Google, Amazon and eBay~


















The prime source of revenue generated by Google is from the Advertising Revenue Model. Google AdWords, it is a pay per click advertising program[Pay-Per-Click (PPC) 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. Furthermore, Google Adsense is an advertising serving program run by Google, and the revenue is generated on a per-click or per-thousand-ads-displayed basis and the advertisements are administered by Google. Moreover, Google Answer is an internet search and research service offered for a fee by Google. Google will keeps 25% of the payment and the rest will be sent to the Researchers (Researchers are not Google employees) whose will answered the customers whom ask questions by offering a price for answer. Besides that, Google is currently testing a new advertising program that pays site owners based on a Cost-Per-Click model. The program, called Cost-Per-Action, was revealed via an invitation e-mail from the Google AdSense team to web site owners. It addition, Google is also using Affiliate Revenue Model to generate income and it provides a highlighted web address or images that link to another website.

Amazon.com is a virtual merchant or e-tailer which is a retail merchant that operates solely over the web and it is also known as one of the first major companies to sell goods by internet. Amazon.com was an online bookstore at the begining. Now, Amazon has expended its business by selling and buying music CDs, videotapes, DVDs, software, consumer electronics, kitchen items, tools, lawn and garden items, toys and games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, industrial and scientific supplies, groceries, and many more. It is therefore the major sources income of Amazon.com Therefore Sales Revenue Model is the major sources of income for Amazon.com. Affiliate Revenue Model which places links or ads on their sites, and is awarded a referral fee if a customer clicks on their link and purchases goods at the transaction site, registers for the site, or some other targeted behavior for which a commission is paid. This is a pay-per-performance revenue model. If an affiliate does not generate sales (or other targeted behaviors), there is no cost to the merchant.


eBay, a popular online auction and shopping web in which people perform businesses such as buying and selling goods and services worldwide. eBay generates revenue from a number of fees such as fees to list a product and fees when the product sells, plus several optional fees. All theseare based on various factors and scales.The auctions vary widely in terms of the offering and bidding rules. Thus, the major revenue of eBay is through Transaction Revenue Model from sellers and buyers. Similar to Amazon.com, eBay targets different types of consumer behavior in its affiliate program to earn affiliate fees of Affiliate Revenue Model but rather than pay a commission on sale of goods.

In the conclusion, the revenue models adopted by Google, Amazon and eBay are slightly different in terms of their natures of businesses. However, there is a common ground among themselves which they are using the Affiliate Revenue Model to generate income.





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