Revenue Models for Google, Amazon.com & eBay

Hello there again readers. Did you miss me much? Today, i am going to talk about the various revenue growth models for the 3 most famous online sites which are Google, Amazon.com and eBay. I will try my absolutely best to make it as entertaining and as enlightening as possible.

Google's revenue model aims at increasing the visibility and traffic of its small business partners, streamlining their marketing costs, qualifying their leads and helping track returns on investment. Google's revenue model includes Google AdWords, Pay per Click Advertising, Google AdSense, Froogle, GoogleAnswers and their latest advertising program which is Cost per Click model. It earns most of its revenue by allowing other website owners to advertise on their search result pages or by placing these same text ads (AdSense) on other sites based on relevance.

90% of Google's revenue is generated by Google AdWords. Google AdWords is a pay per click advertising program that is designed to allow the advertisers to present advertisements to people at the instant the people are looking for information related to what the advertiser has to offer. As such, the role of AdWords in Google’s growth is very important.

Pay per Click Advertising (PPC) is the best way to send immediate, targeted traffic to your website. It is an online advertising payment model in which payment is based on qualifying click-throughs. An advertiser has to pay every time his ad receives a click. The Advertisers decide the keywords relevant to their offer that should display their ad and the maximum amount they are willing to pay per click for that keyword. This function is a very useful function and will continue to bring about an increase in income especially if the number of people clicking on these ads increase. However, Google should take care that this function is not misused. there might be and increase in click frauds when manipulation of search results are not dealt with properly.

AdSense is an ad serving program run by Google. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. Revenue is generated on a per-click or per-thousand-ads-displayed basis and the ads are administered by Google. AdSense program includes AdSense for search and AdSense for content. Google advertisers are required to pay Google a fee each time a user clicks on one of their ads displayed on Google Network members’ web sites. Here is a picture of AdSense screenshots

Froogle is a service from Google that makes it easy to find information about products for sale online. Froogle is a price engine website launched by Google Inc. It differs from most normal price engines in the sense that it neither charges any fees for listings, accepts payment for products to show up first nor make any commission on sales. Any company can submit product information (via a “data feed”) to be included in the Froogle engine. Advertising space is available for purchase to be displayed in Froogle in the form of an AdWords ad.

Amazon.com provides a wide range of advertising channels to reach the most demographic availability.

EBay's revenue increases with seller surplus. It's liquidity promotes a lock in, which is keeps current customers happy and acquires new customers. It also have a diversified market. It reaches out to people of all ages and walks of life providing nearly everything that can be sold. Their main sources of revenue is from fees charged to list items up, picture service fees, listing upgrade fees, final value fees and reservation fees. They charge fees to list an item. For example, for listing of regular items, eBay charges a fee which serves as a starting price. EBay also obtains it's revenue by charging a picture service fee. The first picture uploaded in its site is free but te subsequent pictures incurs fees. Other than that, eBay obtains its revenue from listing and updating fees. It provides various services to help its users to enhance their advertising or promotion of products but for a fee of course. They also charge final value fees. It is charged when there is a closing bid. Reservation fees is only charged if the item listed is not sold.

Here are links to several links to other sites which I think provides interesting facts about E-Commerce, check it out!
1) eBay vs Amazon.com
2) Amazon Finally Clicks

Monday, June 9, 2008

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