5. Identify and compare the revenue model for Google, Amazon.com, eBay.
Google has multiple revenue models. It earns profit from advertising fees, from functions such ad AdWords, a pay per click advertising programme which allows advertiser shows relevent or related advertisement from what users searching for. As you can see, AdWords also generates affiliates fee for Google.
Google also have another revenue model which also an advertising form call AdSense. Website owners can enroll in the program to enable text and vidoe advertisements. This has same concept as pay per click, advertisers are required to pay Google a fee for each time a user clicks on the advertisement.
eBay does not have inventory like Amazon.com. It only provides technology platforms and tools for e-commerce. ebay has various revenue model, it earns transaction fee from owning paypal, an online paying service system for users to buy items online more conveniently. ebay also gains sales from the service of listing customer’s product to be sold to other users as well as some advertisement fee. ebay generated overall revenue around $6 billion from its three primary business: auctions, payments (PayPal) and communication (Skype).
Amazon.com uses similar revenue model to ebay, they also offer items listing to be sold online. Amazon.com generate revenue from commissions from suppliers when there is a sale of product. In thier main websites, there are few advertisement displays in the page where users browsing through some items.
Saturday, January 31, 2009
Thursday, January 29, 2009
Google's success and its causes
The first name that comes to most peoples’ mind when they want to use a search engine on the web is ‘Google’. Google has paved the way globally for technological innovation, business prudence, product quality and effective marketing. Google’s success hasn’t been gained overnight. Instead, it has been a combination of foresight, good business thinking, product innovation and of course luck. Here are ten things, which could potentially benefit companies aspiring to achieve success just like Google did, in their industry.
1. A unique product
1. A unique product
Google was successful because it made good business decisions, constantly improving its products as well as expanding its product base. But at the core of its business was and still is a very unique, solid and effective search engine more popular than any search engines currently in the market. The point is that even before delving into competitive pricing and effective marketing strategies it is important that you offer something, which most companies in the same industry don’t. It may be a product or even a service.
2. Focus on core competency first
Google has always focused on keeping its original products robust and on the leading edge of technological advancement. This helps them invest in other areas without putting themselves at too much risk.
3. The battle against inertia
Google was very successful with its core product, the search engine, but it didn’t stop there. They kept improving it while constantly probing non-traditional markets such as mobile services (SMS service), desktop searches (Windows search has been used traditionally with a Windows OS), etc. For a company it is necessary to keep making better its current products but at the same time it is equally important to look out for new markets and opportunities because the competition is most certainly doing that!
4. Getting the right people
Your company is only as good as the people who work for it. Google carefully chose its people because they wanted to make sure that the people coming in were mentally aligned to the company's goals and objectives. Not only should they have the necessary skill sets to adjust to the culture and perform in it, but they should thrive in this environment. For Google, the important qualities to look for in potential employees were creativity and imagination more than experience and education.
5. The best defense is offense
Google recently launched their web document tools such as Google spreadsheets and documents. Microsoft has dominated the offline market for the longest time and though this does not look like a direct hit it does make them think and put a foot back in defense. It pays to be proactive instead of being reactive. Penetrating into foreign territory with aggressiveness but with sufficient research and logic will more often than none lead to sustained growth.
6. Promote the right culture and then embrace it
People popularly know the Googleplex today, the Google HQ boasts of state-of-the-art facilities that has everything from swimming pools and hair stylists to a multi-cuisine cafeteria and day-care center. It is because Google wants its employees to feel more than just employees and their work place more than just a cubicle with a desk and a computer. Google promotes a ‘family’ environment with all the comforts of a home and more. Because the philosophy is that a happy, free and content mind is a creative, imaginative mind free of day-to-day stress and problems.
7. Speed to market
In today’s environment, speed to market can make or break your company or at least cause significant damage or enormous profitability. Google has an unusual strategy in that it releases beta products very quickly in the mainstream user market while it contemplates on financing strategies and product quality. They buy time but make sure the consumers get a taste of the product, so that by the time it is ready to sell it; users are hooked on to it. Speed is important and it pays off. The thing to remember though that speed to market should not be confused with hastiness, which could have a hard-hitting backlash instead of potential profitability.
8. Be honest to your company’s mission statement
Google’s mission statement explains their desire to make quality data universally available. For the same reason they never insert ads into their search hits. In fact when AOL first wanted to use Google’s search engine capabilities on their website it asked them to insert ads. They refused and have steered clear of it ever since. They got the contract with AOL two years later. Your company needs to understand and value what it stands for and function by it. Publicly owned companies will soon lose shareholder confidence if they exhibit hypocrisy in business practices.9. Find the right investors
If your company is really a start-up looking for promising investors then the importance of getting the right-minded (for your company) investors cannot be stressed more. It doesn’t make good business sense to approach pharmaceutical companies for funding when your company is all about IT, at least in most cases, unless there is a vested interest. These investors often sit at the Board of Directors meetings and have a yay or nay in a lot of crucial decisions.
10. Believe in Luck!
Believe it or not luck is important too, the lack of which can cause serious damage. But it doesn't means that the company should sit back leaving itself to the mercy of fortune.Though you can never achieve ‘good luck’ you can certainly align your decisions in a way that would make it more likely to be lucky than unlucky. Looking at long-term losses instead of immediate gains while making decisions is imperative.The history and evolution of E-commerce
History of E-commerce
One of the most popular activities on the Web is shopping. It has much allure in it – you can shop at your leisure, anytime, and in your pajamas. Literally anyone can have their pages built to display their specific goods and services.
History of ecommerce dates back to the invention of the very old notion of “sell and buy”, electricity, cables, computers, modems, and the Internet. Ecommerce became possible in 1991 when the Internet was opened to commercial use. Since that date thousands of businesses have taken up residence at web sites.
At first, the term ecommerce meant 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 gave an opportunity for users to exchange business information and do electronic transactions. The ability to use these technologies appeared in the late 1970s and allowed business companies and organizations to send commercial documentation electronically.
Although the Internet began to advance in popularity among the general public in 1994, it took approximately four years to develop the security protocols (for example, HTTP) and DSL which allowed rapid access and a persistent connection to the Internet. In 2000 a great number of business companies in the United States and Western Europe represented their services in the World Wide Web. At this time the meaning of the word ecommerce was changed. People began to define the term ecommerce as the process of purchasing of available goods and services over the Internet using secure connections and electronic payment services. Although the dot-com collapse in 2000 led to unfortunate results and many of ecommerce companies disappeared, the “brick and mortar” retailers recognized the advantages of electronic commerce and began to add such capabilities to their web sites (e.g., after the online grocery store Webvan came to ruin, two supermarket chains, Albertsons and Safeway, began to use ecommerce to enable their customers to buy groceries online). By the end of 2001, the largest form of ecommerce, Business-to-Business (B2B) model, had around $700 billion in transactions.
According to all available data, ecommerce sales continued to grow in the next few years and, by the end of 2007, ecommerce sales accounted for 3.4 percent of total sales.
Ecommerce has a great deal of advantages over “brick and mortar” stores and mail order catalogs. Consumers can easily search through a large database of products and services. They can see actual prices, build an order over several days and email it as a “wish list” hoping that someone will pay for their selected goods. Customers can compare prices with a click of the mouse and buy the selected product at best prices.
Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a way to be found by customers without expensive advertising campaign. Even small online shops can reach global markets. Web technology also allows to track customer preferences and to deliver individually-tailored marketing.
History of ecommerce is unthinkable without Amazon and Ebay which were among the first Internet companies to allow electronic transactions. Thanks to their founders we now have a handsome ecommerce sector and enjoy the buying and selling advantages of the Internet. Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories of products sold in the World Wide Web are music, books, computers, office supplies and other consumer electronics.
Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first American ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost its position as a successful business model, however, in 2003 the company made its first annual profit which was the first step to the further development.
At the outset Amazon.com was considered as an online bookstore, but in time it extended a variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s, apparel, footwear, health products, etc. The original name of the company was Cadabra.com, but shortly after it become popular in the Internet Bezos decided to rename his business “Amazon” after the world’s most voluminous river. In 1999 Jeff Bezos was entitled as the Person of the Year by Time Magazine in recognition of the company’s success. Although the company’s main headquarters is located in the USA, WA, Amazon has set up separate websites in other economically developed countries such as the United Kingdom, Canada, France, Germany, Japan, and China. The company supports and operates retail web sites for many famous businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.
Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and nowadays the company gets about 40% of its sales from affiliates and third party sellers who list and sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently sponsoring the film “The Stolen Child” with 20th Century Fox.
According to the research conducted in 2008, the domain Amazon.com attracted about 615 million customers every year. The most popular feature of the web site is the review system, i.e. the ability for visitors to submit their reviews and rate any product on a rating scale from one to five stars. Amazon.com is also well-known for its clear and user-friendly advanced search facility which enables visitors to search for keywords in the full text of many books in the database.
One more company which has contributed much to the process of ecommerce development is Dell Inc., an American company located in Texas, which stands third in computer sales within the industry behind Hewlett-Packard and Acer.
Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was the first company to record a million dollars in online sales. The company’s unique strategy of selling goods over the World Wide Web with no retail outlets and no middlemen has been admired by a lot of customers and imitated by a great number of ecommerce businesses. The key factor of Dell’s success is that Dell.com enables customers to choose and to control, i.e. visitors can browse the site and assemble PCs piece by piece choosing each single component based on their budget and requirements. According to statistics, approximately half of the company’s profit comes from the web site.
In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and 8th on its annual Top 20 list of the most successful and admired companies in the USA in recognition of the company’s business model.
History of ecommerce is a history of a new, virtual world which is evolving according to the customer advantage. It is a world which we are all building together brick by brick, laying a secure foundation for the future generations.
The Evolution of Commerce
As technology continues to drive evolution in the market place new forms of commerce are being born. In the wake of E-commerce we are now seeing the combination of almost every letter of the alphabet with commerce. The letters V, I, P, T, U and M have joined forces to become voice commerce, internet commerce, proximity commerce, ultimate or ubiquitous commerce, television commerce and mobile commerce.
One trend that seeks to further tap into our impulsive human nature has become known as T-Commerce, or television commerce. Shopping channels and paid advertisements have been around for more than 20 years, but until now we have always had to pick up the phone and talk to someone to make a purchase. Researchers have found this to be a deterrent for some even when they have a strong need or desire for the advertised product. T-commerce allows viewers to purchase items displayed on their television with a press of a button. In some countries such as Taiwan, this has become a multi-billion dollar industry with revenues exceeding all television channels combined.
The technology combines your TV with the internet via a set-top box (STB). The box decodes any interactive features available on a certain program. If you happen to become interested in a particular product your favorite actor or actress is using, navigation with your television remote takes you to more detailed information and even enables you to make a purchase. Other features found in STB's are hard drives, DVD recording, video on demand, and VoIP support. They also allow for interaction with television games shows, and online auctions.
With increasing demand for this service security requires greater consideration. Although the integrated nature of the systems security is fairly high, there are always risks. The main concerns facing STB developers are compromised credit card information when using merchant services, breach of privacy, and cloned technology. Even though identity theft is the greatest fear among consumers shopping online many do very little or nothing at all in regards to computer security. The implementation of security features is much easier than on PC's due to the proprietary technology used by STBs. Software could be updated automatically without subscribers even knowing making it nearly impossible for hackers to gain access to user accounts and transfer money to an offshore merchant account.
As markets continue to innovate there is no end to what is possible. Perhaps the day is near where getting people to the polling stations is no longer a problem and we can all vote from the comfort of our couches whilst watching the latest episode of "Lost".
One of the most popular activities on the Web is shopping. It has much allure in it – you can shop at your leisure, anytime, and in your pajamas. Literally anyone can have their pages built to display their specific goods and services.
History of ecommerce dates back to the invention of the very old notion of “sell and buy”, electricity, cables, computers, modems, and the Internet. Ecommerce became possible in 1991 when the Internet was opened to commercial use. Since that date thousands of businesses have taken up residence at web sites.
At first, the term ecommerce meant 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 gave an opportunity for users to exchange business information and do electronic transactions. The ability to use these technologies appeared in the late 1970s and allowed business companies and organizations to send commercial documentation electronically.
Although the Internet began to advance in popularity among the general public in 1994, it took approximately four years to develop the security protocols (for example, HTTP) and DSL which allowed rapid access and a persistent connection to the Internet. In 2000 a great number of business companies in the United States and Western Europe represented their services in the World Wide Web. At this time the meaning of the word ecommerce was changed. People began to define the term ecommerce as the process of purchasing of available goods and services over the Internet using secure connections and electronic payment services. Although the dot-com collapse in 2000 led to unfortunate results and many of ecommerce companies disappeared, the “brick and mortar” retailers recognized the advantages of electronic commerce and began to add such capabilities to their web sites (e.g., after the online grocery store Webvan came to ruin, two supermarket chains, Albertsons and Safeway, began to use ecommerce to enable their customers to buy groceries online). By the end of 2001, the largest form of ecommerce, Business-to-Business (B2B) model, had around $700 billion in transactions.
According to all available data, ecommerce sales continued to grow in the next few years and, by the end of 2007, ecommerce sales accounted for 3.4 percent of total sales.
Ecommerce has a great deal of advantages over “brick and mortar” stores and mail order catalogs. Consumers can easily search through a large database of products and services. They can see actual prices, build an order over several days and email it as a “wish list” hoping that someone will pay for their selected goods. Customers can compare prices with a click of the mouse and buy the selected product at best prices.
Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a way to be found by customers without expensive advertising campaign. Even small online shops can reach global markets. Web technology also allows to track customer preferences and to deliver individually-tailored marketing.
History of ecommerce is unthinkable without Amazon and Ebay which were among the first Internet companies to allow electronic transactions. Thanks to their founders we now have a handsome ecommerce sector and enjoy the buying and selling advantages of the Internet. Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories of products sold in the World Wide Web are music, books, computers, office supplies and other consumer electronics.
Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first American ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost its position as a successful business model, however, in 2003 the company made its first annual profit which was the first step to the further development.
At the outset Amazon.com was considered as an online bookstore, but in time it extended a variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s, apparel, footwear, health products, etc. The original name of the company was Cadabra.com, but shortly after it become popular in the Internet Bezos decided to rename his business “Amazon” after the world’s most voluminous river. In 1999 Jeff Bezos was entitled as the Person of the Year by Time Magazine in recognition of the company’s success. Although the company’s main headquarters is located in the USA, WA, Amazon has set up separate websites in other economically developed countries such as the United Kingdom, Canada, France, Germany, Japan, and China. The company supports and operates retail web sites for many famous businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.
Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and nowadays the company gets about 40% of its sales from affiliates and third party sellers who list and sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently sponsoring the film “The Stolen Child” with 20th Century Fox.
According to the research conducted in 2008, the domain Amazon.com attracted about 615 million customers every year. The most popular feature of the web site is the review system, i.e. the ability for visitors to submit their reviews and rate any product on a rating scale from one to five stars. Amazon.com is also well-known for its clear and user-friendly advanced search facility which enables visitors to search for keywords in the full text of many books in the database.
One more company which has contributed much to the process of ecommerce development is Dell Inc., an American company located in Texas, which stands third in computer sales within the industry behind Hewlett-Packard and Acer.
Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was the first company to record a million dollars in online sales. The company’s unique strategy of selling goods over the World Wide Web with no retail outlets and no middlemen has been admired by a lot of customers and imitated by a great number of ecommerce businesses. The key factor of Dell’s success is that Dell.com enables customers to choose and to control, i.e. visitors can browse the site and assemble PCs piece by piece choosing each single component based on their budget and requirements. According to statistics, approximately half of the company’s profit comes from the web site.
In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and 8th on its annual Top 20 list of the most successful and admired companies in the USA in recognition of the company’s business model.
History of ecommerce is a history of a new, virtual world which is evolving according to the customer advantage. It is a world which we are all building together brick by brick, laying a secure foundation for the future generations.
The Evolution of Commerce
As technology continues to drive evolution in the market place new forms of commerce are being born. In the wake of E-commerce we are now seeing the combination of almost every letter of the alphabet with commerce. The letters V, I, P, T, U and M have joined forces to become voice commerce, internet commerce, proximity commerce, ultimate or ubiquitous commerce, television commerce and mobile commerce.
One trend that seeks to further tap into our impulsive human nature has become known as T-Commerce, or television commerce. Shopping channels and paid advertisements have been around for more than 20 years, but until now we have always had to pick up the phone and talk to someone to make a purchase. Researchers have found this to be a deterrent for some even when they have a strong need or desire for the advertised product. T-commerce allows viewers to purchase items displayed on their television with a press of a button. In some countries such as Taiwan, this has become a multi-billion dollar industry with revenues exceeding all television channels combined.
The technology combines your TV with the internet via a set-top box (STB). The box decodes any interactive features available on a certain program. If you happen to become interested in a particular product your favorite actor or actress is using, navigation with your television remote takes you to more detailed information and even enables you to make a purchase. Other features found in STB's are hard drives, DVD recording, video on demand, and VoIP support. They also allow for interaction with television games shows, and online auctions.
With increasing demand for this service security requires greater consideration. Although the integrated nature of the systems security is fairly high, there are always risks. The main concerns facing STB developers are compromised credit card information when using merchant services, breach of privacy, and cloned technology. Even though identity theft is the greatest fear among consumers shopping online many do very little or nothing at all in regards to computer security. The implementation of security features is much easier than on PC's due to the proprietary technology used by STBs. Software could be updated automatically without subscribers even knowing making it nearly impossible for hackers to gain access to user accounts and transfer money to an offshore merchant account.
As markets continue to innovate there is no end to what is possible. Perhaps the day is near where getting people to the polling stations is no longer a problem and we can all vote from the comfort of our couches whilst watching the latest episode of "Lost".
Pets.com failure and its causes
Pets.com sold pet accessories and supplies
direct to consumers over the World Wide Web. The site was launched in November 1998, founded by company web developer Greg McLemore. It rolled out a regional advertising campaign through TV, print, radio and yet a Pets.com magazine. The company was known for its wildly popular mascot, the Pets.com sock puppet, and Pets.com site design had attained several advertising awards.
Pets.com is a former dot-com enterprise that ceased operations in November 2000. The company went public in February 2000; the former NASDAQ stock symbol was IPET. Pets.com made significant investments in infrastructure; these resulted in the company needing a critical mass of customers to break even. Its management maintained that the company needed to get to a revenue run rate that supported this infrastructure buildout. They believed that the revenue target was close to $300 million to hit the breakeven point and that it would take a minimum of 4 to 5 years to hit that run rate. This time period was based on growth of Internet shopping and the percentage of pet owners that shopped on the Internet.
By fall of 2000, after the bursting of the dot-com bubble, the Pets.com management and board realized that they would not be able to raise further capital. However when PetSmart offered less than the net cash value of the company, Pets.com's board turned down that offer. Pets.com stock had fallen from over $11 per share in February 2000 to $0.19 the day of its liquidation announcement. While the offer from PetSmart.com was declined, some assets, including its domain, were sold to PetSmart.com. The pets.com management stayed on to provide an orderly wind down of operations and liquidation of assets.
Obviously, the poor business plan of company led to Pets.com failure. First of all, Pets.com had overestimated the market trend. The company optimistically assumed that the revenues would grow rapidly and allow them to hit their rate. However, the estimation was based on the current market without analyzing the future trend and risk. This unsustainable business model facing downfalls when dot-com failure.
Furthermore, the company did not bring up a good proposal in opposing its competitors. Pets.com advertised extensively and selling its products at low prices to maintain competitive. High cost of delivering and low profit margins caused the company facing crisis in generating revenues. Nine months after securing $82.5 million in investment the company went bankrupt.
Pets.com never had a unique selling proposition. There is no reason to convince consumers to buy pet foods and accessories through the site. Since it is available within neighbourhood, purchasing online is inconvenient as customers have to wait for days to receive their orders. The cat may already poop all over the floor when the cat litter arrived. There is no benefit regards price nor convenient.
Here are some related links:
1. Pets.com (http://pets.com/)
2. Pets.com latest high-profile dot-com disaster (http://news.cnet.com/2100-1017-248230.html)
3. 10 epic website failures (http://www.goodwebpractices.com/website-design/10-epic-website-failures.html)
4. The 25 worst business failures in history (http://www.businesspundit.com/the-25-worst-business-failures-in-history/)
5. Top ten E-commerce mistakes (http://shopping-cart-review.toptenreviews.com/top-ten-mistakes-ecommerce-article.html)
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