The Comparison of Revenue Model for Google, Amazon.com and eBay

Revenue models are techniques used to generate profits, and its component consists of sales, transaction fees, subscription fees, advertising fees, affiliate fees and other revenue sources.

Google rake in a total of US$ 21.8 billion in revenue for in 2008. In a flash, the breakdowns of revenues in figures and percentage are:

1. Advertising- 97% (21.1 billion)
2. licensing and other revenues -3% (667 million)

which consist of:

1. Subscription fees whereby monthly or yearly fixed amount is paid to get services. Services offered by Google include internet ad serving and management services to advertisers and ad agencies

2. Advertising fees where payment is derived from advertiser for placing ads in both Google websites and Google Network websites. Example of this is Google AdSense, an online programs that aids in distribution of advertisers’ AdWords ads for display as well as programs to deliver ads on television and radio broadcasts. This program includes:

· AdSense for search (display relevant search results) as well as for content (display ads relevant to content on Google websites). Advertisers will pay each time a user click on it, unless they choose the pay based on cost-per-impression pricing.

· Google TV Ads enables advertisers, operators and programmers to buy, schedule, deliver and measure ads on television. Fees will be charged each time an ad is displayed on television.

· Google Audio Ads enables the distribution of advertisers’ ads for broadcast on radio programs

3. Affiliate fees whereby commissions is earned for referring customers to client’s website. Google Adwords (an automated online program that allows advertisers to place targeted text-based or banner ads on its websites) clearly illustrates the type of fees earned in this section, which are:

· cost-per-click basis - payment due when a user clicks on any of its ads

· cost-per-impression - payment due when a user clicks on any of its ads. Alternatively, payment depending on the number of times advertiser ads appear on its websites as specified by the advertiser

· cost-per-click pricing - advertisers will be charged every time a user clicks on one of the ads which appear next to the search results

Detailed information can be obtained via http://investor.google.com/fin_data.html

As one of the leading e-commerce platforms in the world, E-bay delivered 8.5 billion in revenues in 2008 from e-commerce, payments (PayPal and Bill Me Later) and Internet voice communications(Skype). Revenue generated from non sales totaled to US$1 billion. E-bay’s model revenue include:

· Sales – revenue from marketplaces, where sales transaction of goods and services takes place as well as online auction where bids are placed via internet.

· Advertising fees – ads of text and graphical, global classifieds sites including LoQUo.com, Intoko, and Netherlands-based Marktplaats.nl, and Kijiji

· Other revenue sources – interest earned from banks on certain PayPal customer account balances, interest and fees earned on the Bill Me Later loan portfolio and from contractual arrangements with third parties that provide services to all of E-bay users

· Subscription fees- Skype, one of the 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. Fees are charged to users to connect Skype’s VoIP product to traditional fixed-line and mobile telephones. These fees are charged on a per-minute basis or on a subscription basis

· Transaction fees - commission is paid on volume of transaction. For E-bay, net transaction revenues are derived primarily from listing and final value fees paid by sellers.

Detailed information can be obtained via http://files.shareholder.com/downloads/ebay/663797116x0x281367/1b773a7c-8c14-45b8-915a-1716ca37dda0/eBay_2008AR.pdf

Amazon delivered $645 million in revenue for 2008. Amazon core business resides in its retails websites where wide range of products and services to customers are being sold. Thus its revenue model is quite simple:

· Sales - purchased merchandise and content for resale from vendors and products offered by third party sellers

· Advertising fees - miscellaneous marketing and promotional offers, such as online advertising, where Amazon is not the seller but instead earn fixed fees, revenue share fees, per-unit activity fees, or some combination thereof

· Other revenue sources- shipping revenues, co-branded credit card agreements

More information can be obtained from :

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjAyN3xDaGlsZElEPS0xfFR5cGU9Mw==&t=1