Sunday, June 14, 2009

Revenue Model for Google, EBay & Amazon.com

The 5 Revenue Models

Sales : Revenue from sales od goods or services.

Transaction fees : Commssions paid on volume of transactions.

Subcription fees : Monthly or yearly fixed amount paid to get some services.

Advertising fees : Payment from advertisers.

Affiliate fees : Commisions for referring customers.


Revenue model of Google

Google is a search engine which focuses on the internet search solution and advertising solution. Google’s main revenue engine is online advertising. It generated itas revenue more than 90% from advertising fees. According to the research, Google reported that the revenue increased from USD 5.2 million to USD 5.51 billion in year 2009’s first quarter if compare with the first quarter of year 2008. In year 2009, Google’s net income is $1.42 billion. It has increased 8.4% if compare with the net income in year 2008 which was $1.31 billion.



Basically its main products or services included Google AdWords and Google Adsense. Google AdWords is a “pay per click advertising program” which will show the sponsored links of a particular product on the right hand side of screen if a user searches Google search engine. Google recognize the amount charge on the advertisers as revenues when their advertisements are published in the magazines. Besides that, Google Adsense is an advertising serving program which implement by the Google. It allows the owner of website to post the text, image, and video advertisement on their websites. Revenue is counted base on a per click per-thousand-ads-displayed basis. This program consists of Adsense for search and Adsense for content. Google advertisers have to pay Google each time once the advertisement is clicked by users which is displayed on the Google Network member’s site. Another service is Froogle which is easier to search information of the products for sales online. It is a price engine website launched by Google.


Related links:
http://www.pcworld.com/article/163306/google_profit_and_revenue_up_in_q1.html
http://organicspam.com/google_revenue_model.asp




Revenue model of Ebay EBay’s revenue model is transaction fees. It is an online auction which allows the businessman or individual buy and sells products or services in the whole world. EBay has more than 2 million items for auctions daily. EBay generates revenue based on transaction fees such as insertion fees, promotional fees, and final value fees. When individual post an item on the EBay, he or she will be charged a fee from EBay as insertion fee. If that item is sold, the individual will be charged by an additional fee which is final value fee. Promotional fees are charged for additional listing option in order to attract the buyers.

In addition, half.com which is a subsidiary of EBay offers items at a fixed price. The items include books, music, movie, video games, and video games consoles. EBay is generated revenue through sales revenue model because it charges 15% commission of the completed sales. Furthermore, EBay is also generated revenue from advertising fees. It draws user’s attention by posting advertisement on the website.


Related links:
http://pages.ebay.com/help/sell/fees.htmly.com/help/sell/fees.html
http://en.wikipedia.org/wiki/Ebay#Profit_and_transactions


Revenue model of Amazon

Amazon.com is a well known online shopping. The Chief Executive of Amazon, Jeffrey P. Bezos said that Amazon contains 16 million items for sales. The items included books, movies, music, computer, electronic, toys, sports, and so on. Amazon.com is generated revenues through sales revenue models because it can make the sales of products or services from users. Moreover, it also is using transaction fees because it allows individual sell products directly by using Amazon.com. Amazon.com will charge a fee on the sales price as commission.

Furthermore, Amazon.com earns affiliates fees because it is pioneer affiliate partnership marketing. A website owner can create an online store to sell the products of Amazon.com. The website owner is not allowed to sell their own products. Website owner will sell the products from Amazon.com’s store and earn referral fees on the products purchased by the website visitors. That fee normally is in the range from 4% to 10% of the product price.


Related link:
http://en.wikipedia.org/wiki/Amazon.com

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