E-evoluzione: Revenue Model for Google, Amazon.com and eBay

Revenue model is the description of how e-commerce companies generate revenue through online activities. The major revenue model are made up of sales, transaction fees, subscription fees, advertising fees, affiliate fees, and other revenue sources. Next, we will looking at how Google, Amazon.com and eBay which are some of the popular the e-commerce websites in generating revenue in the competitive market.

Google is one of the most popular search engines among worldwide users. The main income for Google Company is through advertising and Global Internet search solution. The few type of revenue models that currently adapted by them are Google AdWords, Google AdSense, Google Answers, Froogle, and Google Cost-per-action.

One of the Google’s advertising program is Google AdWords. It allows advertiser to post their advertisement on the Google web page. It helps to advertise people and lead people who are actively looking for information about the advertiser’s products and services to their web page. The ads are shown on the “sponsored link” located at the right side of the window while some appears at the top of the main search results. Google AdWords is also a pay-per-click product where the advertisers will only require to pay when the viewer click on the advertisement links. The advertisers are required to set relevant keywords that display their ads and also the rate to be charged for every click to their home page.

Google AdSense is another ad serving program built by Google. It is different from Google AdWord where it enable advertiser to post graphics or video advertisement instead of just text. The revenue of this program is earned upon pay-per-click or pay-per-thousand-ads-displayed basis.

Besides the above facility, Google also provide Internet search or research services which is named as Google Answers to worldwide users. In this program, the users will ask question and offer a price for the answers. Google will then look for researchers who are not their employees for answers. As the questions are answered, Google will keep 25% of the payment and the balance is send to the researcher.

The forth service which launched by Google is Froogle. Froogle is a price engine website which enables companies to post product information to be inserted in the engine. There is no commission charged on sales. Google make revenue by earning advertisement fees in the form of AdWords ad or AdSense ad.

Furthermore,the most current revenue program is the cost-per-action application. Google get paid when the viewer clicks on an ad and carry out an action on the advertiser’s web page such as purchasing a product.

Amazon.com is another popular website which is best known for its online sales. It earns income generally from the revenue model of direct selling or e-retailing. They sell all sort of product like books, videos, electronics, household equipment and others.

Besides, Amazon is also generating revenue through charging transaction fees between online buyer and seller. Online businesses or sellers are able to sell their good or product by posting at the Amazon Marketplace. Online buyers can then purchase online directly from the buyer. Commissions will be charged based on volume and price of each transaction.

Furthermore, another set of revenue model used by Amazon is through affiliate marketing program. It is a famous revenue model for Amazon where website owners affiliate with Amazon by creating an online store on their sites. Website owners will earn referral fees by directing the customers to purchase product at Amazon web page. By using this method, Amazon has generated high income by selling high volume of goods.

eBay is always the favorite place for customers who enjoy online auction. Similarly to Amazon.com, eBay is also a marketplace where online users are able to buy and sell product through the website. eBay primary generates revenue from the online auction activities. For instances, Sellers are charged with insertion fees upon listing product on eBay. Promotional fees are also charged to promote the product with additional listing option. After the transaction has taken place, final value fee which include auction listing fees, fixed price listing fees and other optional feature fee is charged as commission to eBay.

Moreover, through the acquisition if PayPal, which is an online paying service system, eBay has gains extra revenue by charging transaction fees on each transaction taken place. More users have begun to use PayPal as it promise security and convenience to the whole payment process. This has eventually brought up the revenue of eBay.