Friday, February 6, 2009

Revenue model

Google offers targeted advertising solutions and global Internet search solutions. Its principal products and services include:
1. Google Ad Words 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, Google generate most of the revenue from Google AdWords. It is an online advertising payment model in which payment is based on qualifying click- throughs. An advertiser has to pay every time his ad receives a click.

Amazon’s revenue model include
1) match-maker model (transaction fee) are based on the net revenue or the commission it receives from the product's sale. The fee is levied to both the supplier and the buyer.
2) distributor model, the intermediary takes ownership of the product. It realizes the total revenues it gets off the product's sale. Supplier purchases a product for $1.00 and resells it for $2.00. The $1.00 is the supplier's margin before costs. Once cost is factored in, however, the gross margin can be substantially less. Amazon.com is a typical example of this model .


Ebay.com is an internet auction site that connects individual buyers and sellers worldwide. It offer a broad of product category with different technology platforms (e.g., auctions, classifieds, payments, VoIP).It also provides technology platforms and tools for e-commerce and doesn’t have inventory like Amazon.com (AMZN), a leading e-commerce retailer. As a result, eBay is a highly profitable company with a 33% operating margin in 2006, in comparison to Amazon, which realized an operating margin around 4.

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