Revenue models outline the sources of income of e-commerce companies. The five major revenue models are sales, transaction fees, subscription fees, advertising fees and affiliate fees.
Google
It is known that approximately 90% of Google’s revenues are derived from the advertising fees received. In January 2009, Google decided to add a new revenue model using resellers to market its Web-based Google Applications to enterprises. Yet, this plan is still under the experimental status. Nevertheless, it portrays potential sales revenue model for Google in future.
For details, please refer to : -
New Revenue Model for Google
Currently, Google’s revenue sources are mainly from advertising fees and affiliate fees. Advertising and affiliate fees revenue models include AdWords, Adsense, Froogle and a new advertising program called Cost-Per-Action program which earns Google a commission every time a customer clicks on an advertisement of a site owner.
Google AdWords is a pay per click advertising program which allows the advertisements to be shown as sponsored links based on the relevant words entered by the users. An advertiser has to pay Google every time his ad receives a click. AdWords generate affiliate fees for Google too.
Google Answers is an internet search and research service offered for a fee by Google. It acts as an agent which helps its customers to find answers by getting the assistance from researchers (not Google employees). Google keeps 25% of the payment from customers when his/her question is successfully answered and sends the rest to the researchers. This portrays an affiliate fee received by Google.
Amazon.com
Amazon.com earns revenue through sales, transaction fees and affiliate fees revenue models. It provides a fixed price online marketplace which allows sellers to offer new or used items to customers. Simultaneously, Amazon is offering a variety of products such as DVD, computer software, books and etc. it charges a commission rate based on the sale price, transaction fee and a variable closing fee.
Besides, Amazon has set up an affiliate partnership marketing program which enables Amazon partners to display Amazon products on their websites. The astore is an affiliate product which website owners can use to create an online store on their site. With the affiliate marketing program, Amazon partners earn referral fees or commissions on the sale of the products purchased by customers. This is a win-win strategy as Amazon gains the sales revenue while its partners earn the referral fees.
eBay
eBay is an online auction and shopping website in which a diversified range of items are traded daily. Its main source of revenue is from a number of fees such as insertion fees (to be listed on eBay), promotional fees (additional listing options to help attract attention), picture service fee (uploading second picture onwards) and final value fees (commission charged when there is a closing bid).
Besides, the acquisition of PayPal, an online paying service system which allows users to buy items online more conveniently, brings additional transaction fees to eBay.
In addition, a portion of Ebay’s revenue also comes from fixed-price sale of goods such as books, CDs, games etc through its subsidiary, Half.com. Direct advertising on the site also brings eBay some advertising fees too.
Apparently, the revenue models of Google, Amazon.com and eBay do not include subscription fee. The major revenue models of each online company are illustrated in the table below:-
The links below provide some interesting facts about how Google and Amazon.com seems to be taking the lead while eBay is falling behind the competition. Do check it out!
How Amazon is beating up eBay
eBay will be permanently marginalized by Google
It is known that approximately 90% of Google’s revenues are derived from the advertising fees received. In January 2009, Google decided to add a new revenue model using resellers to market its Web-based Google Applications to enterprises. Yet, this plan is still under the experimental status. Nevertheless, it portrays potential sales revenue model for Google in future.For details, please refer to : -
New Revenue Model for Google
Currently, Google’s revenue sources are mainly from advertising fees and affiliate fees. Advertising and affiliate fees revenue models include AdWords, Adsense, Froogle and a new advertising program called Cost-Per-Action program which earns Google a commission every time a customer clicks on an advertisement of a site owner.
Google AdWords is a pay per click advertising program which allows the advertisements to be shown as sponsored links based on the relevant words entered by the users. An advertiser has to pay Google every time his ad receives a click. AdWords generate affiliate fees for Google too.
Google Answers is an internet search and research service offered for a fee by Google. It acts as an agent which helps its customers to find answers by getting the assistance from researchers (not Google employees). Google keeps 25% of the payment from customers when his/her question is successfully answered and sends the rest to the researchers. This portrays an affiliate fee received by Google.
Amazon.com
Amazon.com earns revenue through sales, transaction fees and affiliate fees revenue models. It provides a fixed price online marketplace which allows sellers to offer new or used items to customers. Simultaneously, Amazon is offering a variety of products such as DVD, computer software, books and etc. it charges a commission rate based on the sale price, transaction fee and a variable closing fee.Besides, Amazon has set up an affiliate partnership marketing program which enables Amazon partners to display Amazon products on their websites. The astore is an affiliate product which website owners can use to create an online store on their site. With the affiliate marketing program, Amazon partners earn referral fees or commissions on the sale of the products purchased by customers. This is a win-win strategy as Amazon gains the sales revenue while its partners earn the referral fees.
eBay
eBay is an online auction and shopping website in which a diversified range of items are traded daily. Its main source of revenue is from a number of fees such as insertion fees (to be listed on eBay), promotional fees (additional listing options to help attract attention), picture service fee (uploading second picture onwards) and final value fees (commission charged when there is a closing bid).Besides, the acquisition of PayPal, an online paying service system which allows users to buy items online more conveniently, brings additional transaction fees to eBay.
In addition, a portion of Ebay’s revenue also comes from fixed-price sale of goods such as books, CDs, games etc through its subsidiary, Half.com. Direct advertising on the site also brings eBay some advertising fees too.
Apparently, the revenue models of Google, Amazon.com and eBay do not include subscription fee. The major revenue models of each online company are illustrated in the table below:-
The links below provide some interesting facts about how Google and Amazon.com seems to be taking the lead while eBay is falling behind the competition. Do check it out!
How Amazon is beating up eBay
eBay will be permanently marginalized by Google
2 comments:
quite interesting facts about google and e-bay..but i would like to add that e-bay has made a very good achievement by helping optimus prime to find sam witwicky in the pursue of finding the all spark..
P.S. cant wait to watch transformers 2 ^^
hehe thank you for your comment but its not quite related to the revenue models discussed above.
well, perhaps you should pay a visit at the links that we have provided, you'll certainly learn more about how google and Amazon are slowly taking over eBay. =)
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