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Friday 13 June 2008

Revenue Model of Google, Amazon.com, and eBay

How they make money?

Most of us must have heard of or visited these 3 websites as they are quite famous among internet users. Especially Google the search engine which every internet user would use it to search information.

Google's founders are
Larry Page and Sergey Brin and they became millionaires as soon as the company listed in the market. Google provides various services ranging from mobile search engine to blog search. Well, let's look at how does Google generate revenue.
Google's revenue model is largely based on advertising. Many businesses that want to put their advertisement online would go to Google AdWords. Google AdWords is a pay per click advertising program of Google 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. When a user searches Google's search engine, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results. It is an online advertising payment model in which payment is based onqualifying click-throughs. An advertiser has to pay every time his ad receives a click.



On the other hand, Amazon.com is one of the most successful e-commerce providers in which its income are mostly generated from transaction fees, affiliate fees and subscription fees. Amazon started as an online bookstore, but soon diversified its product lines from DVD to food.


Last year, my friend bought a second hand projector from an online auction marketplace--eBay. It is very convenient to my friend as he does not have to go to shop and buy it. e-Bay is an online auction and shopping Web site in which people and businesses buy and sell goods and services worldwide. It also owns PayPal, Skype, StubHub, and other business. Thus, it has various types of revenue models included advertising fees, affiliate fees and other revenue sources.

Comparing these 3 businesses revenue model, each business unit is focused on different revenue model and excel in their own field.
Facing challenges from globalization, they continuously pursues improvement in providing services to maintain their competitive advantage. Therefore, they are able to beat their competitors and survived after dot-com bubble.

1 comments:

Vomail said...

Google makes good revenue through its advertising program, but it also gives websites a chance to get organic traffic without having to pay anything. Those who are well versed in SEO techniques can optimize their website without any expense, otherwise one can also choose to spend on external agencies like seo company Los Angeles.