Monday, June 16, 2008

Revenue Model for Google, Amazon.com and eBay.

Google Inc. is an American Public Corporation, earning revenue from advertising related to its Internet Search, Gmail, Google Maps, Google Messenger, YouTube and Picasa as well as selling advertising-free versions of the same technologies. Google was co-founded by Larry Page and Sergey Brin while they were students at Stanford University and the company was first incorporated as a privately held company on September 7, 1998. Google's initial public offering took place on August 19, 2004, raising US$1.67 billion, making it worth US$23 billion.


The Google’s revenue model are Google Adwords and Google Adsense. Google Adwords is a pay per click advertising program of Google designed. It is to allow the advertisers to present their advertisements to people at the moment the people are looking for information, which related to what the advertiser has offer. When the user searches the Google’s search engine. Pay per click is an online advertising payment model in which the payment is based on the qualifying click-through. An advertiser has to pay when every time his ad receives a click. It is means that the advertiser only pay when the people click on the ad on it, and it is easy to control costs. When a user searches the Google’s search engine, ads for relevant words are shown as ‘’sponsored link” on the right side of the screen



Google Adsense is an ad serving program, which is run by the Google, Google Adsense. The website owners can enroll to the program to enable text, image, and video advertisements on their sites. Revenue is generated on a per-click or the per-thousand-ads-displayed basis. The ads are administered by Google. The Google advertisers are required to pay the Google a fee, on each time a user clicks on one of their ads displayed on the web sites.








Amazon.com, Incorporation is an American electronic commerce (e-commerce) company in Seattle, Washington. It was one of the first major companies to sell goods by Internet. Amazon.com started the business is the on-line bookstore, but later vary to the product lines of DVD, music CDs, MP3 format, computer software, video games, electronics, health and personal-care items, furniture, food, toys, beauty products, musical instruments, groceries, industrial and scientific sip plies, kitchen items, and etc. It also provides global shipping to certain countries for some of the products. Thus, Amazon.com's revenue model is majorly generated from sales of goods and partly from advertisement.




eBay Incorporation is an American Internet company, which is manage by th eBay.com. It is an online auction and shopping website that the people and businesses buy and sell goods and services worldwide. eBay Incorporation also owns Paypal and Skype.

Millions of the comuputers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold everyday. Anything can be sold as long as it is not illegal and does not violate the eBay rules and regulations policy. The services and intangibles items also can be sold. The international companies, such as IBM, will sell their latest products and offer the services on eBay, by using the competitive auctions, and fixed-priced storefronts.

eBay generates revenue from a number of fees. The eBay fee system is quite complex; there are fees to list a product and fees when the product sells, plus several optional fees, all based on various factors and scales. The U.S.-based eBay.com takes $0.20 to $80 per listing and 5.25% or less of the final price (as of 2007). The Mexican eBay "mercado libre" takes 1% (price of the article × number of articles to be sold), and 4.99% of the final price if there is a successful trade. The UK based ebay.co.uk takes from GBP £0.15 to a maximum rate of GBP £3 per £100 for an ordinary listing and from 0.75% to 5.25% of the final price. In addition, eBay now owns the PayPal payment system which has fees of its own.

Hence, the revenue models that used by eBay is Transaction Fees (commissions paid on volume of transactions) ,Subscription Fees(monthly or yearly fixed amount paid to get some services) and Advertisement Fees (payments from advertisers).

Reference:
  1. https://adwords.google.com/select/Login
  2. https://www.google.com/adsense/login/en_US/
  3. http://en.wikipedia.org/wiki/EBay
  4. http://en.wikipedia.org/wiki/Amazon.com

Prepared by Rui

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