There are many dot-com failures which are pet.com, mvp.com, boom.com and etc. The dot-com failure that will be discussed here is Webvan.com.

Webvan.com was founded in 1999 by Louis Borders. It was a website that sold groceries such as bread and vegetables in the US. It had spent around $1bn within 18 months to build its own infrastructure to deliver groceries in a number of cities, spent almost half of a billion by going public and bought over one of its largest competitors-HomeGrocer. However, by 2001, it had announced went into bankruptcy and caused 2,000 its employees lost their jobs.


There are many reasons for Webcan.com failures:

1) An incorrect business model
The company was presumed that it was a technology business and not a grocery business.

2) Lack of management experience
Webcan.com was an online super-market but it was run by consultant, officers and directors who lack of management knowledge and retail food experience in the supermarket industry. Even its CEO George Shaheen did not have little or no food related experience and its founders, Louis Borders was an expert in selling book, but books do not expire or spoil.

3) Lack of understanding of the sociology and psychology of retailing food
Webvan.com’s management did not understand the style of consumers shop for foods. Most of the consumers like to go to supermarkets to look at, feel and touch the merchandise. They like to speak to the grocer, wine department manager or butcher to negotiate the price or get more information about the merchandise. Besides, Webvan.com tried to implement a total customer satisfaction model by delivery the merchandise ordered to customers within 30 minutes. However, they did not consider that many working customers would like their groceries to be delivered at home at night.

4) Erroneous target marketings
Webvan.com had targeted on wrong customers, it targeted on soccer moms and upscale suburban families. The most obvious potential customers for Webvan’s services were senior citizens, mothers with very young children, college students, handicapped individuals and late-night workers.

5) Lack of demographic understanding
Webvan.com’s major warehouses were located in Atlanta and Los Angeles, where the citizen are used to driving and rather drive to a shop or a store to get the groceries than to wait for delivery at home. Only those couples who both work and who hailed from congested metropolitan areas suited to Webvan.com’s idea.


Reference:
http://en.wikipedia.org/wiki/Webvan
http://www.turnaround.org/Publications/Articles.aspx?objectID=1802
http://crave.cnet.co.uk/gadgets/0,39029552,49296926-6,00.htm

Dell, Inc, one of the world’s largest corporations that make a huge success in the online marketplace which is also known as e-commerce. Dell, the company’s name simply comes from the founder, Michael Dell. Michael Dell starts his own business at the age of 19years old. Amazingly, he started up PC’s Limited with just $1000 American dollars in 1984. What come across his mind is that he wanted to sell personal computers directly to the customers and without the third party as an agent. In 1988 PC's Limited had a name change to "Dell Computer Corporation". Guess what? Nowadays, Dell, Inc. had made annual sales of up to $50 billion American dollars.

How Dell, Inc. actually made a success in the world of e-commerce? Dell, Inc. offer a broad range of business line, such as desktop computer systems, laptop, servers and networking products, mobility products, software and peripherals and enhanced services. By selling computer systems directly to customers, it can eliminates retailers that add unnecessary time and cost. By doing so, Dell, Inc. had saved up a huge amount of cost for unnecessary expenses especially the cost of enterprise hardcopy printing.

In addition, Dell, Inc is well known for its continually improving operational performance that will lead the company to a higher level of success. Dell's customer-focused direct business model is a soul of Dell. It has become the culture of Dell to serve their best for customers in unique environment as a team.

Seems Dell, Inc adopts the Just-In-Time systems for the inventory level. Dell also focuses on how to improve the relationships among business partners such as supplier chain for goods/materials, delivery agent. This is to ensure goods/materials are provided on the ground of just-in-time and products can deliver to customer in timely basis.

In order to survive and operating a success business in the world of e-commerce, Dell, Inc. needs to implement its effective e-commerce strategies and manage the supply chain through internet efficiently. The factors of success for Dell are as follow:

· Dell Delivery Service

By buying products from Dell through online, delivery services will be given and reach to customer with just 7-10 working days. Dell, Inc. even provides custom delivery services, which means Dell will arrange the services according to your needs. The services are like scheduled delivery services, pre-delivery services and destination services. Buyer no longer need to worry when delivery arrived can’t able to get it instantly.

· Mass Customized Products

Customers can customize Dell’s products based on different individual needs. For example, individual would like a bigger storage space for his laptop; he can customize/upgrade the hard disk drive through Dell’s website. These enable to meet different customers need and requirement and have the flexibility to scale and adjust service levels quickly.

· Cheaper Price

Dell, Inc. has been save cost due to doing business through internet. It helps Dell to save the cost of shop rental, warehouse, document printing and etc. This has been an advantage for Dell, Inc. Dell manage to offer customer a good quality product with adorable price while customer purchase it through online transactions.

· Customer Service

Due to it is online transaction, buyer will have worries about transaction security, product delivery, warranty and maintenance, before and after sales services and etc. However, Dell had done it well when dealing with customers in this aspect. Dell, Inc. offers an effective online customer service through personalized web pages and the establishment of customer interaction centre. By doing so, there is a direct customer relationship with customers that make them feel confident with Dell’s services.

All this above is the key factor why Dell success in the online marketplace. In these recent years, Dell started to conduct its business in the physical world. The reason is in order to compete in the market and target a new market range of customers which usually purchase product ‘offline’.

References:

http://www.woopidoo.com/biography/michael-dell/index.htm

http://www.dell.com/content/topics/global.aspx/about_dell/company/products_services/prods_servs?~ck=ln&c=us&l=en&lnki=0&s=corp

http://www.fundinguniverse.com/company-histories/Dell-Inc-Company-History.html

http://dspace.mit.edu/handle/1721.1/34778

http://www1.ap.dell.com/content/topics/global.aspx/corp/soulofdell/en/index?c=ap&l=en&s=corp&~ck=mn

http://www.grin.com/e-book/66929/key-factors-of-successful-e-commerce-what-hp-can-learn-from-dell

E-commerce can be defined as a modern business methodology that addresses the needs of organizations, merchants, and consumers to cut costs while improving the quality of goods and services and the increasing speed of service delivery, by using Internet.

In the early 1970, E-commerce applications were start developed with innovation such as:

Electronic Funds Transfer (EFT)

The funds can be transfer electronically from one organization to another EFT was limited to large corporation, financial institutions, and other daring businesses.

Electronic Data Interchange (EDI)

EDI used to electronically transfer routine documents which expanded electronic transfers from financial transactions to other types of transaction processing. It enlarged the pool of participating companies from financial institutions to many types of businesses such as retailers, manufacturers, services.

Interorganizational System (IOS)

A system which allows the flow of informations to be automated between organizations in order to reach a desired supply-chain management system that enables the development of competitive organizations. In year 1984, the term ecommerce mean the process of execution of commercial transactions electronically with the help of the leading technologies such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) which provide an opportunity for users to exchange business information and make electronic transactions.

One of a America website name Compuserve has offers online retail products to its customers in 1992. Moreover, this service gives people the first chance to buy products off their computer.

Nestcape was exist in year 1994. It has providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer.

One year later, two of the biggest names in e-commerce are launched which are Amazon.com and eBay.com. These websites become more popular and famous for the sellers and buyers because sellers can post their product details and photos in the website and buyers easy and convenience to launch it.

In year 1998, Digital Subscriber Line (DSL) was created and provided fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money, online.

Retail spending over the Internet reaches $20 billion regarding Business.com in year 1999.It shows that more people are starting to use the internet for their daily transactions.

The U.S government extended the moratorium on Internet taxes until at least 2005. Nowadays, the largest electronic commerce is Business-to-Business (B2B) which is the businesses involved in B2B sell their products and services to other businesses. In 2001, this form of e-commerce had around $700 billion in transactions.

"Web 2.0" refers to a second generation of web development and design, that facilitates communication, secure information sharing, interoperability, and collaboration on the World Wide Web. Web 2.0 concepts have led to the development and evolution of web-based communities, hosted services, and applications such as social-networking sites, video-sharing sites, wikis, blogs, mashup and folksonomies.

Web 2.0 websites typically include some of the following features or techniques:

Search

The ease of searching information through keyword search.

Links

Ad-hoc guides to other relevant information.

Authoring

The ability to create constantly updating content over a platform that is shifted from being the creation of a few to being constantly updated, interlinked work. In blog, content is cumulative in that posts and comments of individuals are accumulated over time.

Tags

Categorization of content by creating tags such as simple, one-word user-determined descriptions to facilitate searching and avoid rigid, pre-made categories.

Extensions

Powerful algorithms that leverage the Web as an application platform as well as a document server.

Signals

The use of RSS technology to rapidly notify users of content changes.

Examples of Web 2.0

Web 1.0	Web 2.0
DoubleClick	Google
AdSense Ofoto	Flickr
Akamai	BitTorrent
mp3.com	Napster
Britannica Online	Wikipedia
personal websites	blogging
evite	upcoming.org and EVDB
domain name speculation	search engine optimization
page views	cost per click
screen scraping	web services
publishing	participation
content management systems	wikis
directories (taxonomy	tagging ("folksonomy")
stickiness	syndication

Reference:

• http://en.wikipedia.org/wiki/Web_2.0
• http://oreilly.com/web2/archive/what-is-web-20.html
  

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