Slide 5.1

Video 6 – Exploring 9 Specific Online Business Models

IBMS Semester 6b Fall 2013Mr. George Szanto

Topics of this lecture

• Explanation of how 9 different online business earnings models work

3

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

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 ?

Amazon.com

MerchantBooks, Videos,

Music

Manufacturer

Kindel

Advertising

Webshops3rd Party

Affiliate Pay money for

referrals $$ $$

$$$$

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.