Ecommerce Diary

The online revenue Model means different techniques for generation income from an internet business. I will discuss about what is the revenue model of Google, Amazon.com and eBay and do some comparison on them.

In the most recently results, the Google generates 99% of the income from ads. There are two sources of advertising, which are Google Adsense and Google Adwords. Adsense is an advertisement application run by Google. Website owners can enroll in this program to enable text, image, and video advertisements on their websites. These advertisements are administered by Google and generate revenue on either a per-click or per-impression basis. Thousands of website owners will take advantage of the Google Adsense program to deliver ads, and they are required to pay Google an affiliate fee each time a user clicks on one of their ads displayed on Google Network members’ web sites.

Besides that, the other source that Google generate income is the Google AdWords. Google AdWords 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. When a user searches Google's search engine, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results. AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. Advertisers will need to pay Google the fees through either a cost-per-click or cost-per-view scheme.

Amazon.com is an online bookstore in the early stage but soon it diversified into different product line like VHS, DVD, music CDs and mp3, computer, software, toys and so on. Therefore, the Amazon.com generates its revenue by sales of goods, merchandise information and service provided in the website.

However, according to the information in Amazon.com discussion forum, Amazon derives about 40% of its sales from affiliates whom they call Associates and third party sellers who list and sell products on the Amazon websites. In worldwide, Amazon has "over 900,000 members" in its affiliate programs. There are a new affiliate product, aStore, allows Associates to embed a subset of Amazon products within, or linked to from, another website. Consistent with the data, there are 1.3 million sellers sold products through Amazon's World Wide Web sites in 2007. Therefore it shown that Selling on Amazon has become more popular as Amazon expanded into a variety of categories beyond media and built a variety of features to support volume selling.

Other than that, Amazon.com also incorporated a number of products and services into its shopping model, like Kindle which launched in November 2007. These products can attract people to continue buying in Amazon.

eBay is an online auction and shopping website in which people and businesses buy and sell a broad variety goods and services worldwide and it also owns Paypal and skype. EBay generates revenue from a number of fees. there are fees to list a product (Insertion Fee) and fees when the product sells (Final Value Fee), plus several optional adornment fees, all based on various factors and scales. The final value fee is the commission that charged to the seller at the end of the auction.

Moreover, there is a portion of eBay’s revenue gain from direct advertising on the site and also the acquisition of PayPal, which bring additional transaction based fee for revenue. EBay also runs an affiliate program under the name eBay Partner Network and the eBay affiliate marketers Fees are paid a percentage of the eBay seller's transaction fees. The payout is 50% to 75% of the fees paid for an item purchased.

About their revenue in year 2008, the Google gain the most which is US $21.796Bil, Amazon.com is the second which is US $19.166bil and finally is the eBay which is US $8.46bil. Three of them also obtain the affiliate fees, but Google is the best to earn the income from it. Amazon.com will more focus on sales and the transaction fees and together with Ebay also more on the transaction fees.

More information, you can visit their website.

Google---Amazon.com---eBay