Revenue model for Google
Google's revenue for the year ended 31 March 2009 is $ 5.5 billion. Advertising fees is the main sources for Google generate profit because it was made up 97% of revenue. Google has provided a few advertising model for advertiser to choose it, for example:
Google AdWord offers pay-per-click (PPC) advertising. The advertisers are paid Google for clicks to their site when their advertisements are shown in Google searches or on sites that display Google advertisements relevant to their content. The AdWords program includes local, national, and international distribution.
Google AdSense was another advertising model. This advertising model is similar to Google Adword. However, it is advertisement serving program run by Google and website owner display advertiser’s Google AdWord advertisements on their site and share in the revenue when AdWord advertisement was click by visitors and an Adwords customer pays Google. Furthermore, website owners can enroll in the program to enable text and video advertisements on their website.
Google Answer is an Internet search and research service offered for a fee by Google. Researchers are answer customer question and Google keeps 25% of the payment, sends the rest to the Researchers. However, Google Answer will offer a price for an answer before the answer is provide by researcher.
Froogle, also known as Google product search which 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. Furthermore, Google also sells advertising through AdWord to be displayed in Froogle.
The following table presents Google revenue for the year ended 31 March 2009:
Revenue model $(in thousands) Percentage
Advertising revenue:
Google web sites 3692,8 67
Google Network web sites 1638,1 30
Total advertising revenues 5330,9 97
Licensing and other revenues 178,1 3
Revenue 5509,0 100
Revenue model for eBay
eBay is an online aution and shopping website in which people and businesses buy and sell a broad variety goods and services worldwide. In year 2009’s first quarter, net revenue of eBay is $2.02 billion. In addition, eBay generates revenue from a number of fees such as transaction fees, subscription fees and so on. For example:
Transaction fees
Insertion fee- amount of money eBay charges to the seller for listing an item for sale. It is vary depending on the starting price of the item and the category the seller chooses to list. Furthermore, it is nonrefundable.
Final Value Fee (FVF) - amount of money eBay charges the seller when an item sells. FVF based on the final selling price of an item at the close of the listing whereas there is no charged when an item does not sell.
Subscription fees
As an eBay Store owner, they can to list their items at a set price, so buyers can purchase items immediately without bidding. However, it was include monthly subscription fees and the amount of fees payment is base on store level (basic, premium and anchor).
Beside that, eBay now owns the PalPay payment system which has fees of its own. PayPal is how individuals and businesses send and receive money online. To sell on eBay, Personal Paypal accounts cannot receive credit card payments except sellers have Premier or Business Account upon receipt of a credit-card-funded payment because eBay is accept many form of payment such as credit card or debit card. PayPal will charge seller’s Premier and Business accounts fees to receive buyer payments. Furthermore, Paypal charged on receive payment is depend on monthly sale volume and total payment volume via PayPal increased 61 percent in year 2008 in eBay auction site.
On the other hand, eBay generate the revenue from getting the commission for every complete sale made by subsidiary company, Half .com. eBay purchased Half.com in 2000 for roughly $350 million and sellers offer items at fixed prices in Half.com. The ratios of commission depend to different selling price.
The following table presents eBay revenue for the year ended 31 March 2009:
Revenue model
$(In thousands)Percentage
Marketplaces 1,033,827 51
Payments 604,833 30
Communication 143,238 8
Total marketing services and 238,688 11
other revenue
Total Revenue 2,020,588 100
Revenue model for Amazon.com
Amazon is a first major company selling goods through internet, also known as e-commerce. It was generate US $177 million as net profit for year 2009' s first quarter. Amazon is using various ways to generate profit. For example:
Sales
Amazon.com getting a revenue from sales of goods such as selling music CDs, videotapes and DVDs, kitchen items, lawn and garden items, toys & games, baby products, sporting goods, jewelry and so on.
Transaction fees
In year 2001, Amazon.com was launched Amazon Marketplace where is fixed-price online marketplace that allows sellers or third party to offer their goods alongside Amazon's offerings. Therefore, Amazon can receive commission via Amazon Marketplace by charges commission rate based on different category of items, per-transaction fee and variable closing fee.
However, the charged only allow after the item sold. The items from Amazon Marketplace can be more satisfy customer need than item sell directly from Amazon. For example, book has author signature that sell via Amazon Marketplace but it do not has selling via Amazon. Therefore, Amazon Marketplace is one of the sales strategies and program has been very profitable for Amazon.com.
Affiliate fees
aStore is an Amazon.com affiliate product which website owners can use to create a professional online store, in minutes and without the need for programming skills, that can be embedded within or linked to from website owner website. Website owners pick products from Amazon's store and earn referral fees on the products purchased by their readers. However, the store does not allow website owners to sell their own products directly. The affiliate fees normally in ranges from 4% to 10% of the product price.
The following table presents Amazon.com revenue for the year ended 31 March 2009:
North America $ (in million) Percentage
Net sale 2,578 26
Media 1,305 13
Electronic and other 1,172 12
general merchandise
Other 101 1
International
Net sale 2,311 24
Media 1,418 15
Electronic and other 874 9
general merchandise
Other 19 0.002
Total revenue 9778 100
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