Business models on the web (c) M.Civilka, 2002 (c) M.Civilka Preface Business models – the most discussed and the least understood feature of the web. The only agreed fact – the web changes traditional business models. (c) M.Civilka Preface  Bussines model – the method of doing business (by which a company can sustain itself - that is, generate revenue).  Bussines model spells-out how a company makes money. (c) M.Civilka Preface  Some models are quite simple.  Other models can be more intricately woven and require deep technical knowledge (radio and television broadcasting). (c) M.Civilka Preface  With all the talk about "free" business models it is easy to forget that radio, and later television, programming has been broadcast over the airwaves just a short time ago. The broadcaster is part of a complex network of distributors at this time.  Who makes money and how much is not always clear at the outset. (c) M.Civilka Preface E-commerce necessarily will give rise to new kinds of business models. But all the novelties - well forgotten past.  eBay online implement old auction model. There is no single, comprehensive and cogent taxonomy of web business models one can point to. (c) M.Civilka Preface  Models are implemented in a variety of ways.  Business models on the web evolve rapidly. (c) M.Civilka Preface  The term "business model" has taken on new meaning and greater importance in the realm of intellectual property protection.  Within the legal community, business models are defined within the context of patent law. Recently a number of patents have been granted for business models in USA.  In many cases, patented web business models will need to withstand court challenges before we can say for certain. (c) M.Civilka E-commerce Bussines Models Pyramid (c) M.Civilka Bussines models  Brokerage  Advertising  Infomediary  Merchant  Manufacturer  Affiliate  Community  Subscription  Utility [...]... forms The infomediary model can also work in the other direction: providing consumers with useful information about the web sites in a market segment that compete for their dollar  Recommender System  Registration Model (c) M.Civilka Recommender System  A site that allows users to exchange information with each other or the sellers [ePinions]  ClickTheButton takes the concept a step further by... Auction Broker Reverse Auction Classifieds Search Agent Bounty Broker (c) M.Civilka Buy/Sell Fulfillment  Online financial brokerage (eTrade)  Travel agents  Volume and low overhead to deliver the best negotiated prices (CarsDirect) (c) M.Civilka Market Exchange  Model in B2B markets (ChemConnect's)  The broker typically charges the seller a transaction fee based on the value of the sale  The. .. transaction services and relationship marketing opportunities  [ex: Yahoo! Stores, Stuff.com, ChoiceMall, ExciteStores] (c) M.Civilka Metamediary A business that brings buyers and online merchants together and provides transaction services  It is a virtual mall  The metamediary protects consumers by assuring satisfaction with merchants The metamediary charges a setup fee and a fee per transaction [ex:... transaction [ex: HotDispatch, Amazon 's zShops] (c) M.Civilka Auction Broker A site that conducts auctions for sellers (individuals or merchants)  Broker charges the seller a fee Seller takes highest bid(s) from buyers above a minimum  Auctions can vary in terms of the offering and bidding rules [ex: eBay, AuctionNet] (c) M.Civilka Reverse Auction  The "name-your-price" business model  Prospective... The offer of a reward for finding a person items  The broker may list items for a flat fee and a percent of the reward, if the item is successfully found [Ex: BountyQuest which lists reward offers for uncovering prior art related to patents.] (c) M.Civilka Advertising  The web advertising model is an extension of the traditional media broadcasting model  The broadcaster a web site, provides content... millions of visits per month) driven by generic or diversified content or services (Excite, AltaVista and Yahoo! or content driven sites like AOL)  The high volume makes advertising profitable and permits further diversification of site services  Free content and services (c) M.Civilka Personalized Portal  The generic nature of a generalized portal undermines user loyalty    portals creation (ex:... exchanges (c) M.Civilka Buyer Aggregator  The process of bringing together individual purchasers from across the Internet  Sellers pay a small percentage of each sale on a pertransaction basis (c) M.Civilka Distributor  A catalog-type operation  B2B models are increasingly common Broker facilitates business transactions between franchised distributors and their trading partners  Faster time to market... services in the form of banner ads (c) M.Civilka Advertising  The banner ads major or sole source of revenue for the broadcaster  The broadcaster may be a content creator or a distributor of content created elsewhere  This model only works when the volume of viewer traffic is large or highly specialized (c) M.Civilka Forms  Generalized Portal  Personalized Portal  Specialized Portal  Attention / Incentive... My.Netscape)  The profitability of this portal in based on volume  and possibly the value of information derived from user choices Personalization can support a "specialized portal" model (c) M.Civilka Specialized Portal  "vortal" (i.e., vertical portal)  Here volume is less important than a well-defined user base (c) M.Civilka Attention / Incentive Marketing  The "pay for attention" model pays... for attention" model pays visitors for: sweepstakes viewing content completing forms flyer-type point schemes The concept was pioneered by CyberGold, with its "earn and spend community" that brings together advertisers interested in incentivesbased marketing with consumers looking to save   Micropayment system Another loyalty-based relationship marketing approach is MyPoints (c) M.Civilka F R E E . Business models on the web (c) M. Civilka, 2002 (c) M. Civilka Preface Business models – the most discussed and the least understood feature of the. M. Civilka Preface  Models are implemented in a variety of ways.  Business models on the web evolve rapidly. (c) M. Civilka Preface  The term " ;business model"