Thursday, June 12, 2008

Revenue Model for Google, Amazon, and eBay

Revenue model description of how the company or an e-commerce project will earn revenue. The major revenue models are sales, transaction fees, subscription fees, advertising fees, affiliate fees, and other revenue sources.


Google, is an American public corporation, earning revenue from advertising related to its Internet search, web-based e-mail, online mapping, office productivity, social networking, and video sharing as well as selling advertising-free versions of the same technologies.

Google.com usually generate most of the revenue from Google Adwards(pay per click advertising), Google Publication Ads, AdSense (ad serving program), and per-click or per-thousand-advertisement.

Google, a new revenue model, is currently testing a new advertising program that pays site owners based on a Cost-Per-Click model. The program, called Cost-Per-Action, was revealed via an invitation e-mail from the Google AdSense team to Web site owners.

For the 2006 fiscal year, the company reported US$10.492 billion in total advertising revenues and only US$112 million in licensing and other revenues. Google AdWords allows Web advertisers to display advertisements in Google's search results and the Google Content Network, through either a cost-per-click or cost-per-view scheme. Google AdSense website owners can also display adverts on their own site, and earn money every time ads are clicked.


Amazon.com was one of the major online shop to sell goods through internet. Amazon primary product lines is come from VHS, DVD, music CDs, MP3 format, computer software, video games, electronics, apparel, furniture, food, toys, etc. it would helping amazon.com to earn money everydays. Besides selling product, they also provide web services such as Amazon Simple Storage Services, Amazon Elastic Compute Cloud, and etc.

Ebay most common revenues come from online auction and shopping website in which people and businesses buy and sell goods and services worldwide.
Another interesting aspect of eBay's revenue model is that it is somewhat evenly spread out among a number of categories, with one glaring standout. Among the categories delivering more than $1 billion in gross market value are:

  • Clothing and accessories -- $3.3 billion
  • Consumer electronics -- $3.2 billion
  • Computers -- $2.9 billion
  • Home and garden -- $2.5 billion
  • Books/Movies/Music -- $2.4 billion
  • Sports -- $2.1 billion
  • Collectibles -- $2.0 million
  • Toys -- $1.6 billion
  • Jewelry and watches -- $1.5 billion
  • Business and industrial -- $1.5 billion
  • Cameras and photos -- $1.3 billion

eBay offers several types of auctions like auction-style listings, fixed price format, and dutch auctions.
eBay generates revenue from a number of fees. The eBay fee system is quite complex, and different across the country. The eBay’s fees may include insertion fees, promotional fees and final value fees. Insertion fees are charged for any item that is listed on eBay, the fees is nonrefundable, promotional fees are charged for extra listed options that attract attention for an item, while for final value fees are a commission at the end of the auction that is charged to seller.

These three companies, Google, Amazon, and eBay, are few of the most successful e-commerce nowadays that adopting different kinds of revenue model. As we can see that google has charge advertising fee towards their advertiser, eBay has apply transaction fee for those products listed on their website as well as comission on the any complete auction transaction. As for amazon’s revenue has come from sales of product lines throughout their website and charged an affiliate fee for referring customers.

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