Thursday, June 18, 2009

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

A revenue model reveal how an organization or the Electronic Commerce project will generate revenue. They generated revenue by sales, transaction fees, subscription fees, advertising fees, affiliate fees, and from other revenue sources.

Google has made its fortune by using advertising revenue and global internet search solutions like companies charge others for allowing them to place a banner on their sites. Its principal products and services include Google Adwords and Google Adsense. Google AdWords is a pay per click advertising program which allowed the advertisers to present advertisements to people at the instant the people are looking for information related to what the advertiser has to offer.Google AdSense is an ad serving program run by Google. Revenue is generated on a per-click or per-thousand-ads-displayed basis and the ads are administered by Google. On each time a user clicks on one of their ads displayed on the web sites, the Google advertisers are required to pay the Google fees.

Amazon.com is the first major company sells goods by internet which the Amazon is completely e-commerce company. Buyers can buy new and used items sold directly by a third party through Amazon.com using amazon marketplace. Amazon.com charges a commission rate based on the sale price, a transaction fee, and a variable closing fee. Amazon.com is using online sales as their revenue from selling merchandise or service over their web sites.

eBay is the world’s largest online auction site. With eBay, all revenue roads lead to seller fees. eBay is an online auction and shopping web site that the people and businesses buy and sell goods and services worldwide. eBay's revenue increases with seller surplus. eBay is using transaction fees which is commissions paid on volume of transactions. The higher the volume, the higher the transaction fees will be.

We can say that Google, Amazon and eBay are the most successful e-commerce companies in the world. As for comparison, the revenue models for Google mainly is advertising, transaction fees which is commissions is for eBay and gaining revenue from sales of goods or services is for Amazon.com.

1 comment:

  1. wow,quite interesting,and it helps me more understanding about this topic.^^ add oil lolz

    ReplyDelete