Revenue Model of Google, Amazon.com and eBay


Google is globally well known for its search engine. It provides high level of services to all users who seek information and resources. Besides global Internet search solution, Google also offers targeted advertising solution. This is the revenue model of Google.



AdWords
Google generates most of its revenue from Google AdWords. It 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. The advertisements are usually placed on the right side of the screen or sometimes above the main search results. The advertisers need to pay for their advertisements once the Google users click on it.


AdSense

AdSense is another advertisement application run by Google. Website owner can enroll in this program to enable text, image and video advertisement on the Google’s search result pages. Google generates revenue on either a per-click or per-impression basis. When a visitor clicks one of the advertisements, the AdSense publisher will share the cost-per-click advertisement revenue with Google.



Amazon.com is known as the America’s largest online retailer. It started as an online bookstore but soon diversified to product line of computer software, music DVDs, video games, electronics, and so on. Therefore, it is clear that Amazon.com generates the revenue through sales.

Besides that, Amazon.com also generates revenue by transaction fees and affiliate fees. Amazon.com will charge transaction fees on the sales and also affiliate fees on those who advertise in the Amazon website.




eBay is an online auction and shopping website in which people and businesses buy and sell a board variety of goods and services worldwide. Besides that, eBay also owns PayPal and Skype.

eBay is very similar to Amazon.com. Both are using sales and transaction revenue model. eBay will gain revenue for every successful transaction. Besides that, PayPal can earn revenue through online payment. PayPal has gained users trust worldwide and has become a global leader in online payment solution.



Conclusion

Most of the revenues for Amazon.com and eBay are from sales and transaction fees. On the other hand, Google is earning from advertising the most. In conclusion, we can say that every company has their own revenue model.
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A review on Real-World Case: Google is changing everything

Assignment! Assignment!
Actually most of the UTAR students always useGoogle” as the main search engine to find the information in order to complete their assignment. This is because Google co-founder Larry Page says that “Google search engine would understand exactly what you mean and give back exactly what you want.”

Nowadays, Google has become the big dog of search engines and successfully concerns the market on popularity among internet users. Although Google may be the favorite search engine by users, it is always aware that a “king” position can be deposed. As we know that “Microsoft” is a powerful and potential competitor against Google and thus as a result, Google is changing everything in order to achieve their organization’s goals.


Given the state of Google’s technology today, Google’s goal is to provide a much higher level of service to all those who seek information and resources. Besides that, Google’s mission is to organize the world’s information and make it universally accessible and useful. Google’s vision is requiring more research, development and innovation to realize.


A glimpse at Google’s activities such as their own products, technology, and the Google culture, some innovative changing will be discovered.



Besides the Google Spreadsheet products, Google has introduced a new Web Browser which is called Google Chrome, aimed at wresting dominance of the browser market from Microsoft’s Internet Explorer. The function of Chrome browser is more effective and efficient than Microsoft’s Internet Explorer, Mozilla’s Firefox and Apple’s Safari. I believe that if Google succeeds, it will be a big challenge with major ramifications for the future of the Web.

Google Chrome Icon Project

According to “Personal Technology” from The Wall Street Journal, the author who is Walter S. Mossberg stated the reasons of why Google ignites the new browser war. The reasons actually involve competing with Microsoft. There are two reasons.

First, Google is in fear that its search engine and other major products will depend on the Microsoft’s browser because it might be able to gain an advantage by altering the design of Internet Explorer, which has roughly 75% market share.



Second, Chrome was designed to be the world’s speediest browser at handling JavaScript. This is because Google sees the Web as a platform for the software programs or web applications that it is currently running directly on computer operating systems, notably Microsoft’s Windows. Moreover, current browsers lack the underlying architecture but more powerful web applications that will rely more greatly on a common Web programming language which called JavaScript. That is why Google would like to create a new browser.




In conclusion, I agree that “Google is changing everything” because Google has persistently pursued innovation and pushed the limits of existing technology to provide a fast, accurate and easy-to-use search service or search engine in real world.




INFORMATION SHARING - Google’s software:

Picasa” is a software application for organizing, editing, transferring, finding, printing, and sharing digital photos. Based on my experience, I use Picasa software helps me to manage the photo on my computer because it is the fastest way to categorize all photos. Therefore, the latest version of Picasa 3.1 greatly improves the collage tool and adds a basic movie maker that let me intersperse a wide range of video.

~For more information, please refer to following websites

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An Example of E-Commerce Failure and its causes

Story of Webvan

Webvan was an online credit and delivery grocery business. It was headquartered in Foster City, California, USA, near Silicon Valley. It delivered products to customers’ homes within a 30-minute window of their choosing. At its peak, it offered service in ten U.S. markets which included San Francisco Bay Area, Dallas, San Diego, Los Angeles, Chicago, Seattle, Portland, Atlanta, Sacramento and Orange Country. The company had originally hoped to expand to 26 cities. However, this hope was spoiled when this company went into bankruptcy in year 2001. Approximately 2000 employees had been let go as a result of the shut down.

What causes this matter to be happened?

Too focus on customer service and neglect the profit in long term

Customer service is important. Any business could provide infinitely good customer service but have to balance the need to serve customers with profits. In this case, Webvan was popular with its good customer service but this company was too focus on this short term profit and had neglected that this service would not bring any profit for them in the long term. Not all people could afford its high delivery fees and as a result, it had not attracted enough customers to sustain its business and thus it need to shut down the company.

Too much of capital expenditure

While Webvan was building up its empire of tech warehouses and fleets of delivery trucks, it eventually ran out of money because the money spent on infrastructure far exceeded sales growth of the company. The $1 billion spent on the infrastructure had affected the company’s financial liquidity. Webvan was unable to cover all these expenses and in the end, it had no choice to wind up the company.

Conclusion

The demise of Webvan indicates an unhappy tale for other companies which having online grocery business. It is not easy to conduct E-commerce. Good knowledge and experience in IT and management is important to conduct a business online. Therefore, I hope that Webvan’s failure may help you a lot.


~For more information, please refer to following websites

  • http://en.wikipedia.org/wiki/Webvan
  • http://news.cnet.com/2100-1017-269594.html
  • http://www.wired.com/techbiz/media/news/2001/07/45098
  • http://www.ecommercetimes.com/story/12028.html
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    An example of an E-Commerce success and its causes

    When all passengers visit our blog which is “E-Commerce Airline”, can you think of any airline companies in Malaysia? My inspired answers is AirAsia and Malaysia Airlines which both are successful in E-Commerce online transaction but the most popular E-Commerce website of airline companies is AirAsia.
    Story of AirAsia in E-Commerce success and its causes
    AirAsia Berhad is a low-cost airline in Malaysia. It operates scheduled domestic and international flights and it is Asia’s largest low fare, no frills airline. The most important is AirAsia is the first airline in the region to implement fully ticketless travel and unassigned seats.

    1. Low-cost airline
    AirAsia pioneered low cost travelling in Asia so it is one of the airlines which is based on Low Cost Carrier Terminal (LCCT). The vision of AirAsia is to serve the 3 billion people who are currently underserved with poor connectivity and high fares. Thus, this is one of the secret of success for the AirAsia low fare airline’s company.
    2. Perfect online booking system
    AirAsia is belonged to Business-to-Customer (B2C) transaction. It is also the first airline to launch the online booking facility that enables bookings through its website. When the online booking facility was launched on 10th May 2002, the airline has recorded over RM5 million sales through the internet (From AirAsia’s Press Release).
    3. Multi-language website
    AirAsia’s website is available in seven languages which are Bahasa Malaysia, English, Mandarin, Tamil, Thai, Tagalog and Bahasa Indonesia. Therefore, it is proved that around 70 percent of AirAsia’s business comes from Internet booking due to its friendly user website.
    4. Convenient web check-in system
    In addition, AirAsia introduced the web check-in in 2007. This web check-in has created AirAsia to become the first airline in Malaysia to offer the ability to check in online and print out boarding passes. In the end of 2007, a new service named “Xpress Boarding” had been launched. This new service enables passengers to get priority boarding with minimum fees.
    Besides web check in and kiosk check in, AirAsia also introduces PDA check-in. As a result, this service enables the passengers to get a low price and choose seats at ease.
    5. High security and reliability online system
    Furthermore, AirAsia has expanding rapidly and it is a very popular airline industry nowadays. AirAsia’s online system is performed around the world and customers can book or buy air ticket from Internet. The transaction with AirAsia through Internet is secured because they use a high standard encryption mode to guarantee that customer transaction is secured and saved. Hence, this security system increases the customer’s loyalty through internet.
    Based on my opinion, AirAsia.com is a successful E-Commerce website because it is a convenient online booking which ensures a hassle-free and friendly user experience.
    In conclusion, I agree that “Now Everyone Can Fly”.


    PICK A SEAT

    Now you can pick your favorite seat when you fly with us!

    ~For more information, please refer to following websites

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    The History and Evolution of E-commerce

    Every IT tools has its own development & evolution. Is every single of E-Commerce development process contributing success to E-Commerce? Can E-Commerce reach today’s evolution without passing through its growing process? Well, we are going to tell you how important is the development process of E-Commerce.

    E-Commerce has changed over the last 30 years and grows steadily from its past history until now. It was first introduced by Michael Aldrich in 1979 to allow electronic commercial transactions to be done through EDI & EFT.

    ~The information below shows the trend of E-Commerce:

    ~1980sE-Commerce was used extensively by auto manufacturers such as Nissan. Credit cards, automated teller machine (ATM), & airline reservation system were introduced as electronic transactions.
    ~1984

    EDI was standardized by using ASC X12 to enable companies to transfer large amount of transactions with one another reliably.

    ~1990s

    World Wide Web was first written by Tim Berners-Lee. ERP, data mining, & data warehousing were also used to support daily transaction process & keep data into shared databases.

    ~1992

    CompuServe offered online retail products to its customers. Thereafter, the development of Security protocol, DSL, & Mosaic Browser allowing quicker access and connection to E-Commerce.

    ~1994

    Pizza Hut offered pizza ordering on its web page for customers to order pizza grocery through online. Next, Netscape provided users a simple browser to surf Internet & safe online transaction technology.

    ~1995

    Amazon was launched by Jess Bezos to permit its customers purchase books & magazines through online while eBay was created by Pierre Omidyar to allow sales take place in set-time format.

    ~1998

    The growth of E-Commerce continues as Electronic Postal Stamp was created for users to download it for printing from the web.


    ~ Current Trend:

    E-Commerce is heavily relying by consumers as it allows them to purchase various goods through internet by using secure protocols & electronic payment services.

    Series of companies such as Air Asia, Amazon, Dell, & Yahoo are also using E-Commerce continuously to promote their products or services to generate revenue.

    In our opinion, the overall development process of E-Commerce should be given credit in contributing the success of E-Commerce today. The successful E-Commerce companies like Dell & Amazon will not be able to provide online transaction services to its customers if E-Commerce does not pass through all its growing process.

    ~For more information, please refer to following websites:

  • E-Commerce
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