Saturday, January 31, 2009

Revenue model for Google, Amazon.com and eBay

Revenue model is a description of how the organization will earn revenue, produce profits, and produce a superior return on invested capital. There are five basic portal revenue models: 1) Sales revenues, 2) advertising revenues, 3) subscription revenues, 4) transaction fee revenues, and 5) micro-transaction revenues.

I'm going to identify and compare the revenue model for Google, Amazon.com and eBay here.

Revenue model of GOOGLE

  • Advertising revenue
1. AdWords - a pay per click advertising program which allows advertisers to present advertisements to people at the instant the people are looking for information related to what the advertiser has to offer. It reaches people when they are actively looking for information about your products and services online, and send targeted visitors directly to what you are offering.




2. AdSense – another pay per click advertising program where advertisers are required to pay every time a user clicks on their advertisement. Website owners can enroll in this program to enable text, image and video advertisements on their sites.


3. Google is currently testing a new advertising program that pays site owners based on a Cost-Per-Click or Cost-Per-Action program. This is different from AdSense ads because a site owner only gets paid whenever a visitor clicks on an ad and performs a specific action, such as purchasing a product from the advertiser. On the other hand, an AdSense text ad, generates revenue for the site owner if a user simply clicks on the ad.

Source from organicspam


Revenue models of AMAZON

  • Sales revenue

Amazon offer a marketplace that allows sellers to offer their goods to be sold online. They generate revenue from commissions from suppliers when there is a sale of product. For example, they sell books, videos, electronics, and kitchen equipment on domestic and international Web sites.

  • Transaction fee revenue

Amazon also charges a transaction fee when a seller successfully sold his goods to buyer through Amazon.

  • Advertising revenue

In their main websites, there are few advertisement displays in the page where users browsing through some items.

  • Affiliate revenue

A company can earn affiliate revenue when it receives commissions for referring customers to others web sites. AStore is an Amazon.com affiliate product which website owners can create an online store on their site. The store does not allow website owners to sell their own products directly. Website owners pick products from Amazon’s store and Amazon will earn referral fees on the products purchased. The fee structure is similar to other affiliate links and ranges from 4% to 10% of the product price.

Source from milkmom.blogspot.com


Revenue models of EBAY

  • Sales revenue
eBay generate revenue by sales revenue model through its subsidiary, Half.com, offers fixed price, person-to-person selling of goods, including books, CDs, videos and games, charging a 15% commission on completed sales.
  • Transaction fee revenue
The acquisition of PayPal, an online paying service system for users to buy items online more conveniently allows the exchange of money over the Internet
  • Advertising revenue
eBay also earn revenue when providing direct advertising on the site and end to end service providers whose services increase the speed of transactions.


Source from milkmom.blogspot.com

• An example of an E-Commerce success and its causes

Dell.Inc is one of the world’s top providers of computer products and services such as servers, storage, workstations, notebook and notebooks computers, to businesses and consumers. Dell was an early and enthusiastic convert to the Internet, creating its first web site in 1994 and moving many of its business activities to the Internet ahead of its competitors. The company saw that its direct model gave it an advantage in selling online. The company's strategy of selling over the Internet is with no retail outlets and no middleman. Dell’s online sales channel has proven so successful and an Aberdeen Group analyst Kent Allen has asked “Does the consumer need to go to the store to buy a PC anymore?”.

History of Dell.Inc
Dell was founded in 1984 by Michael Dell on a simple concept: by selling computer systems directly to customers, they could best understand customer needs and efficiently provide the most effective computing solutions to meet those needs. Dell.Inc evolves business strategy by combines their revolution direct customer model with new distribution channels to reach commercial customers and individual consumers around the world.

1. Dell Delivery
Due to its efficient supply chain management, Dell is capable of shipping a PC within 24 hours of receiving an order. This introduction of the internet and e-commerce has helped Dell improve this efficiency and profitability.

2. The front end
A key part of Dell's success is that the site offers consumers "choice and control." Consumers can click through Dell and assemble computer system piece by piece, choosing components like hard drive size and processor speed based on their budgets and needs. This ability allows people to custom design and a lot of people are catch up now. Instant, this direct contact with consumers gives Dell a competitive advantage, which they know what their customers are orders and get feedback on how their site is working.

3. The back end
“Now that many e-tailers have built a customer-friendly front end, their back end supply chain is a greater focus”, says Aberdeen's Allen. The progress on making sure [e-tailers] weren't just capturing the order but was fulfilling the order. That's where Dell is continuing to succeed.

By using a direct-sales model via the internet and the telephone-network, dell has maintains a negative cash conversion cycle (CCC) through use of this model. Dell has no central warehouse facility, so Dell.Inc receives payment for the products before it has to pay for the materials. Dell also practices just-in-time (JIT) inventory-management, profiting from its attendant benefits. Dell's JIT approach utilizes the "pull" system by building computers only after customers place orders and by requesting materials from suppliers as needed.

4. Dell Ventures
Another piece of Dell’s e-commerce strategy has been Dell Ventures, which has invested $700 million in about 50 Internet companies (as of July 2000), in areas including broadband and wireless communications, business-to-business and business-to-consumer e-commerce, ASPs, server and storage infrastructure, Internet content, and e-consulting. These investments give Dell access to new technologies without expanding its own R&D activities, and may pay off financially if the companies go public.

Dell - Purely You

The history and evolution of E-Commerce

The history and evolution of E-Commerce

What is E-Commerce?
E-commerce describes as the Electronic Commerces (EC), which known as the useful buzzword of the online business revolution. It captures the excitement and more focus through the fast emrging market. As well as history of e-commerce is an important component that helps people more understanding about the History and online with different websites via the Internet. Furthermore, E-commerce also means as a online business transaction such as nowadays a lots of people buying and selling of goods, services and information via Internet.

The concept of e-commerce is all about using the Internet to do business better and faster. For customers, e-commerces is about giving customers controlled access to their computer systems and allow people to serve themselves. While e-commerce not only for transaction of buying and selling, it is also a part of electronically communicating, collaborating and discovering information. This is sometimes named as e-business.

History of E-Commerce
EC applications firstly developed in the early 1970s with innovations such as Electronic Funds Transfer (EFT), which these funds could be routed electronically from one organization to another. However this application has limited to large corporations, financial institutions, and a few other personal businesses. Firstly, development Electronic Funds Transfer (EFT) refers to the computer-based systems used to perform financial transactions electronically. For example of the term of EFT such as electronic bill payment in online banking, which may delivered by EFT or paper check, payment card, direct deposit via a payroll services company and direct debit payments from customer to business.

Next, Electronic Data interchange (EDI) typically as a technology used to electronically transfer routine documents. This technology referred as expanded electronic transfers from financial transactions to other types of transaction processing. Electronic Data Interchange (EDI) develop to the structured transmission of data between organisations by electronic. Electronic Data Interchange include such as e-mail, electronic bulletin boards, fax transmissions, and electronic funds transfer.

Thirdly, other systems known as Interorganizational system (IOS) applications which this strategic value has been widely recognized.

Evolution of E-Commerce
*In 1984*
In the 1980s when ATMs and telephone banking started to become popular they were also thought of as electronic commerce. It means something almost entirely different today. But in 1984, one EDI, the ASC X12, became the standard for transferring large amounts of transactions, and was adapted quickly by those institutions who wanted to do business electronically.

*In 1992*
The first records of a company letting people buy things off the computer is present as early as 1992 in the form of Compuserve, which may not have offered a great boost to international trade, import or export or global sourcing but it did provide a humble basis for future development in the arena.

* In 1994*
In 1994, the first point and click web browser was developed, called Mosaic. Then the first downloadable browser, Netscape, was developed based on Mosaic, and this gave people with Internet access the ability to participate in electronic commerce. This was really the first step in the history of e commerce that lead to the widespread e-commerce usage we see today.

*In 1995*
The year of 1995 cannot be forgotten as it marked the beginning of two giants of Amazon.com and eBay.com which do not need any introduction these days have certainly contributed in their own ways to international trade, import or export and global sourcing.




*In 1998*
In 1998, DSL, or Digital Subscriber Line, provides fast, always-on Internet service to subscribers across California. This prompts people to spend more time, money and online.

*In 1999*
Infact as early as 1999 the retail sales on the internet had reached as high as twenty billion dollars according to Business.com. Napster was founded in 1999, and even though it started out as a way for users to share music files for free, its development was an important step in the history of e commerce. As it became more and more popular, consumers had a say in what they hoped to get from such a site, and e commerce and the entire industry, in general.

*In 2000*
In 2000, The U.S government extended the moratorium on Internet taxes until at least 2005. AOL and Time Warner merged, combining a completely online company with an old and established traditional company. By then, Yahoo, eBay and Amazon.com were popular sites, their names synonymous with Internet use and e commerce.

Mainly this started the push for secure ordering and more secure browser interfaces. Nowadays a lots of activities are more precisely to the termed of “Web commerce” known as the purchase of goods and services over the World Wide Web via secure servers (HTTPS , as a special server protocol which encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic pay services, like credit card pay authorizations.

During the infamous “dot com” era, Ecommerce was known as “web commerce” and referred to the buying and selling of services and products over the internet via secure connections and they were made using electronic shopping carts that were made with built in electronic payment services, like credit card authorization.

As the conclusion, history and evolution of e-commerce is a history of a new, virtual world which is evolving according to the customer advantage. The most important is E-commerce allows people to buy or sell anything in anytime of the day.












Thursday, January 29, 2009

An example of an E-Commerce failure and its causes

There are many companies that proved successful in e-commerce especially companies like Amazon.com, AOL, eBay and Dell just to name a few. However there are also those that did not quite get it right and sunk badly. A shining example of a dot-com company that failed is Webvan.com.

Webvan was an online 'credit and deliver' grocery business that was founded by Louis Borders, the same man that established Borders book store. Borders saw opportunity in harnessing the power of the internet to deliver goods to customer's homes in a simple, inexpensive manner, targetting the entire American retail market. There were many companies that invested in the venture including Yahoo!, CBS, and Benchmark Capital. Webvan began its operation on 2 June, 1999, went bankrupt and closed down by 2001. In June 2008, CNET hailed Webvan as one of the greatest dotcom disasters in history.

There were several reasons for its failure:

1) Webvan's e-tailing model
Webvan used the funds obtained from its venture capitalist to build a high tech infrastructure with the logic that huge investments in technology would result in high productivity hence allowing them to be far superior compared to other online supermarkets and brick-and-mortar stores. This was not the case however as Webvan's investment on infrastructure far exceeded sales growth and the company eventually ran out of money.

2) Logistical problems
Despite investments in high-tech machinery, Webvan began to face logistical problems by 2001. For example, there were malfuntions of the conveyor belts caused by the warehouses' cold temperature to preserve fresh food products, there was an overflow of cartons because many items were placed in the carts and so on. Because of these problems, Webvan had to invest more money to handle them.

3) Overambitious
Webvan entered into a market it was unfamiliar with and quickly proceeded to committed almost $1 billion to build expensive warehouses and other infrastructures. In addition, the grocery business generally has low-margins and was never able to attract enough customers to justify its huge spendings.

4) Overall impractical business idea
Webvan, although gave online selling a good try, showed that selling groceries on the web turned out to be an unworkable business idea. "Webvan has proved that right now, the online grocery market is niche at best, and this won't change until there is far greater Internet adoption", says Jasjit Mangal of Swander Pce & Co., a retail industry consultancy.

A core lesson to be learned from Webvan's fall is that even if you have a good idea, it's best not too grow too fast too soon.
Related links:

Thursday, January 22, 2009

Shaun's Profile

First of all, HAPPY 2009! Year of the Ox! Moo...
Now on with the introductions. Hey everyone my name is Shaun Tan, age 21. As with the rest of my team mates, I'm currently studying in UTAR doing my 3rd and final year of my degree in Entrepreneurship aka 'Usahawan'. My hometown is in Petaling Jaya but I'm currently residing in Sg Long where my campus is located to cut the crazy travelling time

My hobbies are playing the guitar, gaming, and reading (especially ghost stories. Yup.)

Below are the top 5 websites that I visit the most:

No.1:

Video streaming goodness! My favorite place to go to satisfy my entertainment needs or to simply kill time. There are all sorts of videos featured on this site neatly organized into several categories such as education, arts, music, comedy etc.

No.2:

This site is most probably on the 'Top 5 Websites' list of others as well. This is probably the best networking website on the web since Friendster. It allows you to 'connect and share with the people in your life' as said in its entrance page. It really does allow you to keep in touch with literally an army of friends with just a click of your mouse. With tonnes of interesting applications, it's no surprise that one can spend hours on Facebook alone.

No.3:

When I wanna learn a new song on the guitar, this is the site I go to. Since I can't read music notes, I resort to reading guitar tabs and this site has a huge library of it. Almost every tab/chords for every song from every artist of every genre is available within the confines of this site.

No.4:

The online encyclopedia I go to for all of life's answers! (well, most of it anyway) It has tonnes of articles about practically everything! All one needs to do is type their topic in the search bar and voila, instant revelation.

No.5:

THE search engine to go to when trying to pinpoint the relevant information on the world wide web. I especially find this site useful when I'm doing research for my subjects.

Next up, my top 5 internet activities:
  1. Chatting with buddies using Windows Live Messenger
  2. Performing online transactions
  3. Checking my e-mails
  4. Doing research
  5. Entertainment through Youtube

With Chinese New Year approaching, allow me to end this entry by wishing everyone a very Happy Chinese New Year! Gong Xi Fa Cai!

Wednesday, January 21, 2009

Elynn's Profile

HeLLo!! welcome to visit our blog. First, i would like to introduce myself. My name is Chua Lee Hwa aka Elynn or wawa or dai ka jie. I came from Batu Pahat, Johor and currently i staying at Flora Green (opposite UTAR). My age?? You can't believable when you see me. I look young but my age not as young as you think. hehe... I not greedy, so my hobbies just have 2 only. Dancing, and swimming are my top hobbies. Other hobbies like shopping, watch movie and etc i still ok lo, because those hobbies are all girls like to do. And i like go out eat or play with my friends but the problem is i have no money how to go!! lol...

The top 5 websites that I visited most are as follows:

1. http://www.google.com.my/

4. http://www.facebook.com/





The top 5 internet activities that i do are :
No.1 --> chatting --> using Windows Live Messenger and Skype
No.2 --> check mail --> using hotmail
No.3 --> playgames --> using gamesgogogo.com
No.4 --> search information --> using Google and Wikipedia
No.5 --> online purchase --> using fashionhomez

Vilin's Profile

Hi everyone!!...Welcoming to our blog!..Now I'm coming in to write down my own blog...Firstly, let me introduce myself ..my full name is Liew Ying Ying..You can also call me "Vilin" or "huhu". My lovely hometown at Batu Pahat..Currently, i am staying at Flora Green( Sungai Long) and studying at UTAR(Sungai Long Campus). I am taking the Bachelor of Business Administration (Hons) Entrepreneurship course..This course is very challenging and i like it very much.

Now, I am going to list down my hobbies here..Actually i dun't have any specific hobbies..just during free time..my first thing will do is downloading song..i'm very like to listen song..the singer which i like it i will download their whole album..^^Other hobbies are playing piano, playing squash, surfing net, shopping, watching drama and movie.

The top five websites tat i have visited as the following:

1)--->http://www.fashionhomez.com/


- This is my favourite website i like to visit. I always go to this website to search new clothes and bags. This websites have a lots of nice clothes and bags.


- This is the website usually use to download new song..That is also can download the singer whole album through this website.



-The most useful search engine website where can find a lots of useful information needed for different types of subject assignments.





-This two websites that i visited most and long time ago. No matter how far you and your friends, this websites usually allows us to keep in touch and communicate with our friends especially old (secondary) and new friends. Uploading new photo and profile through this websites.
-Usually use to check and reply my e-mails.


*How useful is Internet to me? Well, the top 5 internet activities that i do are :

1. --->Check email--->using Hotmail and Gmail.

2.--->Searching information--->using Google, Yahoo and Wikipedia.

3.--->Downloading song and drama--->using Youtube, 71mp3.com and xunlei.com.

4.--->Chatting--->using Windows Live Messenger and Skype

5.--->Playing online games--->using viwawa.com and bigfishgames.com.


:-)That's all of my profile. Thanks for viewing our blog. Welcome to leave any comments to our blog.^^HaPpY CHiNeSE "COW" YeAR!!^^

Tuesday, January 20, 2009

L's Profile




Hi, the one who is reading the my blog post now. My name is Law Jia Qi, you can also call me as 'L', 'Ryuuzaki', or 'Mr.Yes', perhaps you can also call me 'God' (this is how my classmates call me, but i actually don't get use to this name. I prefer people call me 'L'.) My hometown is at Petaling Jaya but i am curently staying at Cypress Condo.

If i am going to list down all of my hobbies here, i'm sure the one who reading this blog will definitely fell asleep. SO, i use the easiest method to write it down, which is directly copy from my friendster and HERE IT IS--> Ping Pong, Table-tennis, Tennis, Taekwondo ,Football, Soccer, Futsal, Basketball, Volleyball, Floor Ball, Captain ball, Pool, Squash, Badminton, Chinese chess, International chess, Frisbee, Bowling, Rock-climbing/Wall-climbing, Music, Dance, Piano, Magic, Traveling, Joking, Playing, Chatting, Sleeping, Laughing, BreakDance, BeatBox... Too many to mention...

The top 5 websites that I visited most are as follows:
No.1 --> http://www.google.com.my/ --> This is my favourite search engine because it is very easy to use and the most important part, it is advertisement-free. It is a very useful website especially when searching information for my assignment. I also visit this website regularly because it has a link to my gmail account where i can check my incoming email there.


No.2 --> http://www.manga.com/ --> This is one of the websites i visited most. There are many interesting manga inside it. The one i like most is of course DEATH NOTE. Sometimes i read it during exam period to release my stress ^^



No.3 --> http://www.facebook.com/ --> Needless to talk much about this, this is a website which allows us to keep in touch with our friends, no matter how far you and your friends are. In this website, you can also share your feelings, pictures, videos and many many more with the community. You can also play games with your friends and compete with them to see who is greater in playing the games.


No.4 --> http://www.youtube.com/ --> Also needless to say much, this is a well-known website which has been bought over by Google. Inside this website, you can watch a lot of videos. You can watch for football goals, songs that you like, movies, funny clips and so on. It is a great entertainment website that can save you out from boredom.



No.5 --> http://www.wikipedia.org/ --> This is a good website where you can find a lot of useful information needed when you are doing your assignment. It is very easy to use as well.




The top 5 internet activities that i do are :

No.1 --> chatting --> using Windows Live Messenger

No.2 --> check mail --> using Gmail

No.3 --> search for songs --> using Youtube

No.4 --> check for football fixtures and results --> using espnstar.com

No.5 --> search for information --> using Google and Wikipedia


Feel free to post your comment. Thanks.