Slide 5.1
Topics of this lecture
• Explanation of how 9 different online
business earnings models work
Learning Objectives
• Understand how the 9 different online
models work and how they generate
income for the users of the models
• Ability to analyze a given online business
determining which online model(s) they
use
• Analyze a given eMarketing objective and
then map the objective to 1 or more online
business models
Voettekst
3
1. Infomediary Model
• Use the infomediary business model if:
– You collect a lot of visitor data.
– Your data is well segmented with specific
demographics of possible buyers.
• Key aspects of a successful infomediary
model:
– Be sure to establish a large network of others to
exchange information and leads with.
– Establish multiple distribution models and media
outposts.
– Collect visitor information at every chance in multiple
locations.
2. Advertising Model
• Needs high volume of traffic or highly
specialized audience
• Mix advertising messages with (free)
content and (free) services
• Moduli:
– Portal (Yahoo, MSN)
– Classifieds – (Craiglist, Monster.com)
– User Registration (NY Times)
– Query based paid placement (Google)
2 Advertising Model Continued
• Contextual Advertising - bundle adware
with product (see examples)
• Content Targeted Advertising (Google)
• Infomercials (see Utramercial demo)
• Utramercials Demo
3. Community Models
• Open Source SW; Open Content; Open
Broadcasting; Social Networking Services
• Examples:
– Red Hat Linux Software (sell services + add
ons)
– Tripadvisor
– Crowdsourcing
4. Manufacturer – Direct Model
• Compress distribution channels
• Sales Moduli: purchase; lease; license
• Examples:
– Dell Computer (B2C and B2B and B2G)
– Cadence Semiconductor Design Software
(B2B)
– ARM – microprocessor licensing (B2B)
– Pop music stars
5. Subscription Model
• User is charged daily, monthly or annual
fee for service (usually unlimited service)
• Examples:
– Content – Netflix (movies); Spotify (music)
– Person to Person Networking Services
(Linkedin)
– All ISP Service Providers
6. Utility Models
• Metered Usage (pay for actual usage)
• Metered Subscriptions (pay per bucket of
use)
• Examples:
– Timed paid Internet connection at airport
– Pay per journal article downloaded
– Adobe Connect Online (video conferencing)
7. Affiliate Model
• Based on driving high volume of traffic to
one website
• Pioneered by Amazon.com
• Various modularities exist:
– Pay per click; Pay per action; pay per view;
– Revenue sharing – customer doesn’t always
need to buy something to earn money
– Exchanging (barter) banners, logos for
example
8. Merchant Model
• Selling directly to end user via Internet
• Examples:
– Virtual – Amazon (all kinds of products)
– Bit Vendor – iTunes; Online Universities
– Catalog Merchant: Lands End; Victoria’s
Secret, Farnell (B2B electronics)
– Click & Mortor: Radio Shack; REI
9. Brokerage Model
• Matching buyer and seller
• You receive a commission for your efforts
(eBay)
• Or – you receive a listing fee from seller –
Marktplatz
• Typical sites: real estate brokers; business
transaction brokers; auction brokers,
recruitment brokers.
Combined Models Also Possible
• Let’s look at Amazon.com, one of the
oldest online business models
• Evolved over the past 12 years
The Amazon Business Models ... can you
think of other ways they earn income ?
Merchant
Books, Videos,
Music
$$
$$
$$
Pay money for
referrals
Amazon.com
Advertising
Webshops
3rd Party
Manufacturer
$$
Affiliate
Kindel
Some other neat examples
• 10 Business Models That Rocked (2011)
End of Video - Thank you
Please take the online quiz associated
with this video.
Also, there is an online discussion
question about the disadvantages of
some of these models which you should
comment on.