Revenue Model of Google, Amazon.com and eBay

Hi, everyone. Today, I’m going to talk about the various revenue growth models for the 3 most famous online sites which are Google, Amazon.com and eBay.

Revenue model is a description of how an organization will earn income, produce financial gain, and produce a better return on invested capital. The major revenue models are:
a) Sales revenue model – a company generates the revenue by selling goods, information or services.
b) Subscription fees revenue model – a company charges a subscription fee by monthly or yearly for the users who access to the content and services offered.
c) Transaction fees revenue model – a company receives commissions which paid on volume of transactions. The higher of the volumes, the higher of the transaction fees. E.g. eBay.
d) Advertising revenue model – a company provides forums for advertisements and receives the payments from advertisers. E.g. Yahoo and Google.
e) Affiliate fees revenue model – a company receives commissions by referring customers to other websites.

Revenue model of Google

First of all, I would like to discuss the revenue model of Google. A major percentage of Google’s yearly income is generated by the advertising revenue model which includes Google AdWords, Google AdSense and Froogle.
Google AdWords is a pay per click advertising program of Google designed to allow the advertisers to present advertisements to people who are looking for information related to what the advertisers have to offer. Google generates most of the revenue from Google AdWords since it enables advertisers easily to sign up and manage an account online.
Google AdSense is an ad serving program run by Google where website owners can enable text, image and video advertisements on their sites in this program. This program includes AdSense for search and AdSense for content. Revenue is generated on a per-click or per-thousand advertisement displayed basis and the advertisements are administered by Google.

Froogle is a price engine website launched by Google Incorporated which is different from other price engines since it neither charges any fees for listings, nor accepts payment for products to show up first.
Besides, Google is currently testing a new advertising program that pays site owners based on a cost-per-click model which is called Cost-Per-Action (CPA). It differs from AdSense whereas a site owner gets paid whenever a visitor clicks on an advertisement and performs a specific action.

Revenue model of Amazon.comAmazon.com was one of the major companies to sell goods by Internet which started business as online bookstore but nowadays they have become multi sellers. Amazon generates revenue primarily by selling books, videos, computer software, toys, industrial tools and etc.
Amazon Marketplace is a fixed price online market place that allows sellers to offer their goods alongside Amazon’s offerings. Buyers can purchase new and used items which sold directly by a third party via Amazon.com by using Amazon Marketplace. Amazon charges a commission rate based on the sale price, a transaction fee and a variable closing fee which is a very profitable sales strategy.
Furthermore, Amazon.com was one of the first online businesses to set up an affiliate marketing program. AStore is an Amazon.com affiliate product which website browsers can use to create an online store on their sites. Website owners are not allowed to sell their own products directly; they have to pick products from the store and earn referral fees on the products purchased by their readers. The fee structure is range from 4% to 10% of the product price.

Revenue model of eBay
EBay is an online auction and shopping website in which people buy and sell goods and services worldwide. Buyers are allowed to browsing and bidding on items which free of charge, but the sellers will be charged. The charges are based on promotional fees, insertion fees and final value fees which are the main revenue of eBay.
Insertion fee is a nonrefundable fee which will be charged when an item listed on eBay. Where promotional fee will be charged for additional listing options that help attract attention for an item, such as bold listings or highlighted. Final value fee is a commission that charged to the seller at the end of the auction.

For further information, please refer to:

http://www.organicspam.com/google_revenue_model.asp

http://www.amazon.com/

http://www.ebay.com/