Wednesday, February 2, 2011

Identify and compare the revenue model for Google, Amazon.com, and eBay.

Sales revenue is the revenue received from sales of goods or services. Transaction fees are commissions paid on the volume of transactions. Subscription fees are monthly or yearly fixed amounts paid to get some services.
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Advertising fees are payments from advertisers because they want to advertise their products or services on the particular websites. 

Affiliate fees are commissions for referring customers. These fees include cost per thousand impression (CPM), cost per click (CPC) and cost per acquisition/action (CPA).


Google
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The revenue models of Google are subscription fees, advertising fees and affiliate fees. Google generates 99% of its revenue from advertisement. Google charges subscription fees for services. Depending on the subscription, users will automatically be charged on a monthly or yearly basis through Google Checkout. When users use Google Checkout to process their sales, they will be charged 1.9% + $0.30 per transaction.


Google uses Google AdSense as an affiliate tool to earn affiliate fee. It is a free program that empowers online publishers to earn revenue by displaying relevant ads on a wide variety of online content. Webmasters of popular sites with interesting content can sign up on Google's Adsense page and begin displaying Google advertisements to their users. Google pays the webmaster a portion of the advertising revenue and keeps the rest. Users can also promote on Google using Google Adwords.
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Amazon.com
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The revenue models of the company are sales revenue, transaction fees, advertising fees, subscription fees and affiliate fees. Most of the revenue of Amazon.com comes from sales revenue because it sells many things online such as books, magazines, DVDs, videos and electronics.

Sellers may put their things to sell on Amazon.com. Sellers will be charged once customers click through to the seller's website and purchase the product directly from the seller because it is a cost per click advertising program. Subscription fees applies with respect to Digital Content made available to use on a subscription basis.



EBay
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The revenue models of eBay are transaction fees, subscription fees, affiliate fees and advertising fees. When users list an item on eBay, users are charged an insertion fee. If the item sells, they are also charged a final value fee. The basic cost of selling an item is the insertion fee plus the final value fee.

EBay is also charging subscription fees for eBay store which is a part of eBay where individual sellers can display all of the items they have for sale and tell you more about their business.  Affiliates will be paid for each click that is directed to an eBay site on a Cost per Action (CPA) model. Payment will be charged to advertisers who advertise on eBay. EBay has a few other programs such as eBay partner network and eBay affiliate program.






Reference(s):

Amazon.com. (2009). Amazon Kindle: License Agreement and Terms of Use. Retrieved Feb 1, 2011, from http://www.amazon.com/gp/help/customer/display.html?ie=UTF8&nodeId=200144530&qid=1213378239&sr=1-2  

Amazon.com. (n.d.). Explore Advertising Opportunities with Amazon.com. Retrieved Feb 1, 2011, from http://www.amazon.com/Advertising/b/?node=276241011

Bala Iyer. ( 2009). Retrieved Feb 1, 2011, from http://www.balaiyer.com/tabid/1475/bid/4501/New-revenue-model-for-Google.aspx

Boutell.Com, Inc. ( Jan 1, 2007). Retrieved Feb 1, 2011, from http://www.boutell.com/newfaq/sitespecific/googlemoney.html

eBay. (2011). About eBay. Retrieved Feb 1, 2011, from https://publisher.ebaypartnernetwork.com/files/hub/en-US/aboutEbay.html

eBay. (2011). Fees for selling on eBay. Retrieved Feb 1, 2011, from http://pages.ebay.com/help/sell/fees.html

Google. (2010). Google Checkout fees. Retrieved Feb 1, 2011, from http://checkout.google.com/seller/fees.html

Google. (2010). Subscriptions. Retrieved Feb 1, 2011, from https://checkout.google.com/support/bin/answer.py?hl=en&answer=1090911

4 comments:

  1. Besides Google Adsense and Google Adwords, Google also launched Google Product Search (formerly Froogle). User can find products for sale online and compare the prices easily. Google don't charge any fees for Vendors who have their products included in Froogle’s search results.However, they can purchase sponsored links which appear in the Product Search results pages

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