What is a Business Model?
-the method of doing business by which a
company can sustain itself
-- that is, generate revenue
What is a Business Model?
-some models are complex
-radio and TV have traditionally broadcast for free
-complex network of
–
–
–
–
distributors
content creators
advertisers (and their agencies)
listeners or viewers
-who makes money and how much is not always
clear
-depends on many competing factors
What is a Business Model?
-Internet commerce (eBusiness) has created
new business models
-but also reinvented existing ones
-eBay reinvented the auction model
-some firms combine several different models
What is a Business Model?
-in some cases, these new business
models/methods have even been patented
-however, these patents may be challenged in
the courts
-Google was recently sued for processes
associated with its AdWords advertising
program
Brokerage Model
-these market-makers bring buyers and sellers
together and facilitate transactions
-B2B, B2C and C2C markets
-usually charge a fee or commission for each
transaction
Brokerage Model
Marketplace Exchange
-offers a full range of services covering the
transaction process, from market assessment
to negotiation and fulfillment
http://www.chemconnect.com/index.html
http://www.expedia.com/
Brokerage Model
Buy/Sell Fulfillment
-takes customer orders to buy or sell a product
or service
-includes terms like price and delivery
http://www.carsdirect.com/home
www.autotrader.ca
Brokerage Model
Demand Collection System
-patented "name-your-price" model
-prospective buyer makes a final (binding) bid
for a specified good or service
-the broker arranges fulfillment
http://www.priceline.com/default.asp
Brokerage Model
Auction Broker
-broker charges the seller a listing fee and
commission scaled with the value of the
transaction
http://www.ebay.com/
Advertising Model
-an extension of the traditional media
broadcast model
-web site, provides content (usually, but not
necessarily, for free) and services (like email,
IM, blogs)
-mixed with advertising messages in the form
of on-line ads
Advertising Model
-ads may be the major or sole source of
revenue for the broadcaster
-broadcaster may be a content creator or a
distributor of content created elsewhere
-works best when the volume of viewer traffic
is large or highly specialized
Advertising Model
-ads may be the major or sole source of
revenue for the broadcaster
-broadcaster may be a content creator or a
distributor of content created elsewhere
-works best when the volume of viewer traffic
is large or highly specialized
Advertising Model
Portal
-usually search engine
-may include varied content and services
-high volume of user traffic makes advertising
profitable
-includes both personalized and niche portals
www.yahoo.com
Advertising Model
Classifieds
-list items for sale or wanted for purchase
-listing and/or membership fees
www.monster.com
www.craigslist.com
Merchant Model
-wholesalers and retailers of goods and
services
Virtual Merchant (e-tailer, pure play)
-operates solely over the internet
www.amazon.com
Merchant Model
Catalogue Merchant
-mail-order business with web-based
catalogue
www.landsend.com
Merchant Model
Click and Mortar
-brick-and-mortar retail with web storefront
www.barnesandnoble.com
www.indigo.ca
Merchant Model
Bit Vendor
-deals strictly in digital products and services
-sales and distribution over the web
www.itunes.com
Manufacturer (Direct) Model
-allow the manufacturer to reach buyers
directly
-compresses the distribution channel
-can be based on:
-efficiency
-improved customer service
-better understanding of customer preferences
www.dell.com
Community Model
-viability based on user loyalty
-users invest extensive time and emotion
-revenue can be based on:
-sale of ancillary products and services
-voluntary contributions
-contextual advertising
-subscriptions for premium services
Community Model
Open Source
-software developed collaboratively by global
community
-revenue from related services such as:
-systems integration
-product support
-tutorials and user documentation
www.redhat.com (watch video)
http://magazine.redhat.com/2009/05/19/video-open-source-government/
Community Model
Open Content
-content developed collaboratively by global
community of volunteer contributors
www.wikipedia.com
Community Model
Social Networking
-connect individuals along common interests
(romance, hobbies, profession, school, family)
-provides opportunities for contextual
advertising and premium subscriptions
www.facebook.com, www.linkedin.com,
www.flickr.com, www.classmates.com