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