E-Commerce Revenue Model describes how the publisher’s websites will earn revenue, generate profits, and produce a superior return on invested capital. The 5 major types are sales, transaction fees, subscription fees, advertising fees, affiliate fees.

Sales - Sales of goods, merchandise information and services provided in the publishers' websites.

Affiliate fees - Companies receive commissions for referring customers to others' websites. It can include CPM (cost per thousand impressions), CPC (cost per click) and CPA (cost per acquisition/action).

Google Inc. is an American public corporation, earning revenue from advertising related to its Internet search, e-mail, online-mapping, office productivity, social networking and video sharing services as well as selling advertising-free versions of the same technologies. 99% of Google's revenue is derived from its advertising programs. For the 2006 fiscal year, the company reported US$10.492 billion in total advertising revenues and only US$112 million in licensing and other revenues. Google offers targeted advertising solutions and global Internet search solutions. Its principal products and services include:

Google AdWords. It is Google's flagship advertising product and main source of revenue ($21 billion in 2008). AdWords 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, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results. Google generate most of the revenue from Google AdWords. Google recognize as revenue the fees charged advertisers when their ads are published in magazines. Pay-Per-Click (PPC) is an online advertising payment model in which payment is based on qualifying click-through. An advertiser has to pay every time his ad receives a click. The Advertisers decide the keywords relevant to their offer that should display their ad and the maximum amount they are willing to pay per click for that keyword.

Google AdSense. It is an ad serving program run by Google. It provides a fast and easy way for website publishers of all sizes to display relevant Google ads on their website's content pages and earn money. It's also a way for website publishers to provide Google web and site search to their visitors, and to earn money by displaying Google ads on the search results pages. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. Revenue is generated through affiliate fees which on a per-click or per-thousand-ads-displayed basis and the ads are administered by Google. AdSense program includes AdSense for search and AdSense for content. AdSense for search was launched in the first quarter of 2002 and is Google’s service for distributing relevant ads from its advertisers for display with search results on the Google Network members’ sites. AdSense for content, launched in the first quarter of 2003, distributes ads from Google’s advertisers that are relevant to content on Google Network members’ sites. Google advertisers are required to pay Google a fee each time a user clicks on one of their ads displayed on Google Network members’ web sites.

eBay Inc. is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. eBay do not have inventory, it generates revenue from a number of fees. The eBay fee system is quite complex; there are fees to list a product (Insertion Fee) and fees when the product sells (Final Value Fee), plus several optional adornment fees, all based on various factors and scales. eBay may earned transaction fees from each successful transaction made by the bidders or sellers. eBay now owns the Paypal payment system which has fees of its own. Paypal founded in 1998 and acquired by eBay Inc. in October 2002. Paypal enables any individual or business with an email address to securely, easily and quickly send and receive payments online. Paypal's service builds on the existing financial infrastructure of bank accounts and credit cards and uses the world's most advanced proprietary fraud prevention systems to create a safe payment solution. A global leader in online payment solutions, Paypal has tens of millions of registered accounts and is accepted by millions of merchants worldwide, on and off eBay. Revenues from PayPal's transaction fees were $243.9 million, a gain of 51 percent from the year-ago quarter and 145 percent from querter2 2003. And the number of registered PayPal users shot up to 79 million from 50 million a year ago. ebay also earn advertising fees for allow some advertiser posting their advertisement on the website. eBay offers several advertising programs that may help advertisement publishers increase their sales cost-effectively.

Amazon.com, Inc. is an American-based multinational electronic commerce company. Amazon.com is a well known online shopping on the web, it provides a wide range of advertising channels to reach the most demographic availability. Amazon uses the internet as the sole method for selling goods to its consumers. Its major revenue is come from the sales included books, movies, musics, computer, electronic, toys, sports and others on domestic and international Websites, such as Amazon Marketplace. Since year 2000, Amazon.com entered into new partnerships designed to increase the firm's revenue and make it profitable. Example like through its agreement with Greenlight.com, Amazon.com added cars to its product offerings in August 2000. The new link presented information on automobiles and trucks in the standard Amazon.com format.

Amazon charges a commission rate based on the sales price, a transaction fee, and a variable closing fee for each successful sale. Amazon.com Inc. said that earnings climbed to $177 million, or 41 cents per share, in the first quarter in year 2009 was thanks to strong sales of products.

Related Links:
1. http://en.wikipedia.org/wiki/Google

2. http://www.organicspam.com/google_revenue_model.asp

3. http://en.wikipedia.org/wiki/AdWords

4. http://en.wikipedia.org/wiki/EBay

5. http://www.ecommerce-guide.com/essentials/ebay/article.php/3522981

6. http://ecommerce.hostip.info/pages/29/Amazon-Com-NEW-PARTNERS-HELP-INCREASE-REVENUE.html

eBay is one of the success example for e-commerce. It is a well known website for everyone. How eBay started? eBay was born over Labor Day weekend in 1995, eBay founder Pierre Omidyar, in an experiment, put a broken laser pointer up for sale online, and to his surprise, found a buyer. When he told the buyer the item was broken, the buyer said: "I' m a collector of broken laser pointers." It was then that Omidyar knew anything was possible. It has around 14 years of history.

eBay is The World’s Online Marketplace, enabling trade on a local, national and international basis. With a diverse and passionate community if individuals and small businesses. Besides that, eBay also offers an online platform where millions of items are traded each day. There are about 276 million registered eBay users worldwide until year 2008. More than US$2,039 (RM6,490) worth of goods are traded every second.

Since its initial public offering in 1998, the company has continued to innovate and connect people and not just through its marketplaces. Two critical acquisitions have made eBay Inc. a global leader in online payments (PayPal- acquired in October 2002) and communications (Skype- acquired in October 2005) as well.

PayPal enables any individual or business with an email address to securely, easily and quickly send and receive payments online. Acquired by eBay Inc. in October 2002, PayPal builds on the existing financial infrastructure of bank accounts and credit cards and uses the world's most advanced proprietary fraud prevention systems to create a safe payment solution. Today, PayPal is a global leader in online payment solutions: It has 149 million registered users and is accepted by millions of merchants worldwide - on and off eBay. PayPal's Q1 2008 global total payment volume of $14.4 billion accounted for nearly 9 percent of worldwide eCommerce.

Acquired by eBay Inc. in October 2005, Skype is an Internet communication company that has revolutionized the way people talk online. With more than 309 million registered users as of early 2008, Skype allows people everywhere to make unlimited voice and video calls online for free using its software. Skype is available in 28 languages and is used in almost every country on Earth. This business unit generates revenue through its premium offerings, such as calls (using its software) made to and from landline and mobile phones; voicemail; call forwarding; and personalization, including ringtones and avatars. In addition to its presence on eBay, Skype has relationships with a growing network of hardware and software providers.

Other key acquisitions have strengthened eBay Inc.'s portfolio of ecommerce companies, including shopping.com, a pioneer in online comparison shopping; Stubhub, a leading online marketplace for the resale of event tickets; rent.com, the most visited online apartment listing service in the U.S.; StumbleUpon, an online solution that helps people discover and share content on the web; and market-leading online classifieds sites including LoQUo.com, Intoko, and Netherlands-based Marktplaats.nl. The company has also grown its classifieds business through Kijiji, which launched in the U.S. in 2007.

Causes of its success:

(a) eBay's success is based on its ability to transform many fragmented, primarily local markets into global ones at a relatively low cost to its users. People have always had a need and an interest in buying and selling used, surplus, and collectible items. Traditionally, they have done so through garage sales, classified advertising in local newspapers, and flea markets.

(b) For a price comparable to advertising an item in the classifieds section of their local newspaper with three or four lines of text, users can post lengthy descriptions and pictures available to a worldwide audience. Concerns about fraud have been mitigated through a user feedback system escrow services. The company's ability to bring a large number of buyers and sellers together is what has driven its growth. The more buyers there are, the more sellers want to participate. Conversely, the more sellers there are, the more items are to buy, and the greater the attraction of the service to buyers. eBay has allowed many people to become entrepreneurs with little upfront expense or overhead and provides a method for companies and even governments to dispose of unwanted items.

(c) eBay makes money by charging listing fees and collecting a percentage of the selling price of items sold through the site. eBay also owns PayPal, which makes money through investing its clients' assets and from transaction fees. eBay's growth has been remarkable.

(d) eBay appears to have significant growth potential. It has successfully introduced new markets, such as car sales, which many thought would not be adaptable to its business model. Besides that, it is so successful because it meets its customer's needs better than any competing service. No one else has accumulated such a large number of buyers and sellers in a single marketplace.

(e) According to the interview with the spokesperson of eBay, Kevin Pursglove, he thinks that people really enjoy the experience of the shopping bazaar. They enjoy the hunt. They enjoy looking around for merchandise.

(f) The other component is that Kevin Pursglove believes they really enjoy the competition of the bidding process. Everybody likes to get a bargain, and everybody, I think, in some way, shape, or form, likes to haggle a little bit over the price. Their auction format allows users to do that.

Video Clips:

1)Brief introduction of eBay



2) eBay music video (Have fun XD)


Related Links:
1. http://www.ebay.com/
2. http://www.ecommercetimes.com/story/2127.html?welcome=1213184390
3. http://answers.google.com/answers/threadview?id=245309
4. http://www.neowave.com.my/malaysia_ecommerce_radar.asp
5. http://www.youtube.com/watch?v=Pt0qIPAeLXM - source from WatchMojo
6. http://www.youtube.com/watch?v=3YXHcbX36Ao - source from dps001