Google appeared to be one of the greatest search engines in World Wide Web. Google "gives away" a great search engine, among other features. That's great. But how do they pay for it? What is Google's business model? In a nutshell, through advertising revenue, this is both on Google’s site and other sites.
Google is a major player in the online advertising industry. Every time you search Google, you'll see ads displayed along with your results. The sponsored text-link ads above and to the right of the results generate a great deal of money for Google. These ads are known as Google Adwords. Besides, there’s another one called Google Adsense, it enables website publishers of all sizes to display relevant ads on their online content and earn money.
Besides making profit out of the ads, Google also has its own store selling its products via online. (http://www.google-store.com/index.php?currency=USD&osCsid=95d994cca193ccb76321c79eb28b1b5c ) Both the advertisement fees and sales amongst the revenue models are adopted by Google.
The ads highlighted in red shown in the above picture is how Google actually make profit out of it.
Amazon.com, Inc. is an American-based multinational electronic commerce company. Headquartered in Seattle, Washington, it is the America’s largest online retailer. Obviously, it Amazon.com generates revenue by using sales of revenue models. It started as an online bookstore but soon diversified to product lines of VHS, DVD, music CDs and MP3s, computer software, video games, electronics, apparel, furniture, food, toys, digital downloads etc.
eBay's Headquarter in San Jose, California.
eBay Inc. is an American Internet company that manages eBay.com, and it uses “Transaction fees” as its revenue model to generate profit for its company. eBay.com is an online auction hosting and shopping website in which people and businesses buy and sell a broad variety goods and services worldwide. A majority of the sales take place through a set-time auction format, but subsequent methods include a substantial segment of listings in the "Buy It Now" category.
How does eBay make money? When you sell an item on the site, eBay takes a cut of the profits you make. For example, let's say I started an auction selling one of my CD's, and I start the bidding at $10. A few days later my CD sells for $15. In this situation, here are the fees I would now owe to eBay:
- Insertion fee (Fee for starting an auction): $0.55
- Final value fee (A percentage of what the auction ended at): $0.79
A total of $1.34 eBay made its profit from me of selling this CD; with thousand of auctions taking place each day, eBay is making real great deals.
In addition to its original U.S. website, eBay has established localized websites in thirty other countries including Malaysia. Its slogan has well defined what eBay is all about - “From collectibles to cars, buy and sell all kinds of items on eBay”.
In a nutshell, I personally think that no revenue model is the best as each of them has its pros and cons respectively. One might be better than another in different aspects but what is more important here is that these models brought us new perspectives of doing business and making profits in today’s e-commerce as they were proven to be successful by these companies.
Relevant sites:
http://www.google.com/
http://www.amazon.com/
http://www.ebay.com/
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