BY: - PANKAJ S INGH CHANDEL

INTERNET BUSINESS MODELS

HISTORY :

The business model structure has been researched by

 Professor Michael Rappa, director of the Institute for Advanced Analytics at North Carolina State University. He wrote a document titled Business Models on the Web which describes all the business models we need. Here they are:

What They are ?

Internet businesses come in all shapes and sizes , from content-based websites that earn revenue through advertising to sites catering to merchandise. There are seven commonly used models, although many businesses successfully employ multiple models on one site to generate revenue. 

TYPES :-

Brokerage AdvertisingInfomediaryMerchantManufacturerAffiliateCommunitySubscriptionUtility

Brokerage :

The premise of the model is simple. It unite buyers and sellers in an online marketplace and facilitate transactions.

E.g.: eBay ,amazon

Advertising

In this model, the website offers content, generally free of charge, to the consumer. This can be in the form of news articles, blogs, or even services such as instant messaging or a search engine. The website features banner ads to pay for the service that is provided.

Infomediary

Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.

Merchant

The merchant model encompasses both retailers delivering goods and services from a variety of manufacturers and manufactures who sell directly to the consumers. Traditional retailers with an online presence in addition to physical storefronts ("click and mortars"), and manufacturing license sellers (such as software manufactures who license their physical product but retain ownership rights).

Manufacturer

The manufacturer or “direct model”, it is predicated on the power of the web to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel.

Affiliate

The affiliate model is one of the lesser-known Internet business models, but it is also one of the most common and least financially risky. Sellers generally offer a percentage discount to consumers making their purchase through the affiliate website. The affiliate website, in return, will receive a commission fee for connecting the consumer to the seller. 

Community

The community model is based upon a premise of user loyalty. However, in the community model, revenue can be generated through voluntary contributions, sales of products, or advertising. Premium services may carry with them an extra charge. In this model, users are not only loyal, but they have a high emotional stake in the company.

E.g.: Wikipedia ,amazon

Subscription

Users sign up for a website providing a specific service and pay the website an agreed upon fee which can be charged on a daily, weekly, monthly, or annual basis.

E.g.: classmates.com and Netflix

Utility

The utility model is, at its heart, a "pay-as-you-go" or “on-demand “service provider that charges based upon metered

usage. In this utility variation, subscribers are charged a fee based upon number of website content pages viewed.