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Online Internet Business Models Archives > Online Internet Business Models By Anajana C. S. This article explores some successful Internet companies and how they tapped the internet business opportunity. Since our company often does web development work for e-businesses and web entrepreneurs, we have gained experience in understanding both the technological and business side of a web site. Please contact us here to outsource web business consulting and development. At a time when 'dot-cons' and 'dot-com doom' are the most commonly used phrases, discussing dot-com successes would be tantamount to burying one's head in the sand and talking. Or is it? Is the Internet revolution really over? According to analysts and the economy soothsayers, No! The Internet has entrenched itself into the economy today. This medium that provides enormous opportunities to any business by removing the twin obstacles of time and distance is here to stay, and thrive. What lessons can be learnt from those who survived the carnage on the Infobahn?
How can you rate a successful e-business?
What are the key areas that a profitable web site needs to concentrate on?
Being ranked among the top 5 in a search engine is only a part of the e-commerce puzzle, your web site needs to satisfy customers once they get there. With new and nimble competitors springing up by the dozen, it is easy for a customer to opt for a competitor who may be easier to do e-business with. One sure way to avoid this is to adopt new technology. The goal should be to automate all processes as much as possible while maintaining personalized human interaction at the same time. Implementation of technology following conventional time-tested principles like dedication and expertise in an adaptive, dynamic environment is what is required. Existing business models are of many kinds:
Most successful companies pursue several related but different models concurrently. They defy easy categorization by diversifying revenue streams and becoming hybrids in a cost-efficient way. Let's take a look at some of the top e-businesses in the field today: EBAY Adopting an amazing and unique culture, where buyers and sellers of all items are allowed to post their comments online, where credit-card payment facilities are secure and easy, the company projects a trustworthy and reliable image. Apart from bidding, certain high quality goods can be sold at prices fixed by the seller. This site also offers professional services for all kinds of business needs. A widespread global reach makes its easy for a buyer in Hong Kong to bid and buy a product from a seller in Paris while the regional sites in North America are able to offer hard-to-ship merchandise. Person-to-person trading and a barter economy have established the company on a secure B2B and B2C platform. Other companies like Yahoo! and Excite have been quick to catch on and incorporate auctions into their sites. Priceline.com, a site that offers airline tickets on discount has begun experimenting quite successfully with this business model. To summarize, their business model can be elucidated thus:
HOMESTORE.COM Homestore.com's internet business model allows prospective buyers to review properties before buying. Is that all? No, they also offer financial advice, online loans, and buyer's guides to homes and household items, home improvement tips, remodeling, and safety and security aspects. Useful advice when moving home and tips on resettling has ensured user satisfaction to the core. Their main revenue came in from subscriptions (52%) and the remaining from
advertising. As a subscription site they picked a specific topic which a
segment of the population would be passionate about and marketed their services
through strategic advertising.
Useful tips for a wannabe subscription site: Market the site through banner ads and direct marketing (newsletters and e-mail) that offer a few tantalizing freebies regularly Offer the complete content to members only Links worth looking at are: Christiansciencemonitor.com: The electronic edition of this famous 90-year old newspaper. Preachingtoday.com: Services like illustration of biblical quotes and facts that preachers can incorporate in their sermons. Sellyourbrainfood.com: Offers services related to digital publishing and promotions.
ORACLE Internet business models like the Biz Online Initiative that deliver simple and complete online services and a host of other tools that customers require in setting up an e-business model, have made them a one stop shop for e-businesses today. Their built-in self-service system for customers, employees and suppliers improved productivity and accuracy and brought down costs by 100's of millions of dollars. Consulting services with major firms like Sun Professional Systems have established their reliability with customers.
Their business formula:
Another company using a similar business model is Exodus Communications, an Internet data center that offers a range of web hosting services, bandwidth on demand, security monitoring. Their servers host leading web sites like Yahoo!, e-Bay and Merril Lynch. They allow these firms to deliver content and applications online round the clock without fail. 35% of their revenue comes from a very successful e-business consulting firm whom they have partnered with (Sapient). They are expanding from 19 data centers to 34 data centers this year.
CISCO 90% of their sales are conducted over the Internet. They offer expertise in
planning and executing Internet enabled solutions.
AMAZON.COM Recently though, they have suffered heavy losses, proving that any successful e-business strategy will survive provided it is based on a solid brick and mortar foundation, a la Barnes and Noble, another famous online bookseller. Although barnesandnoble.com and Barnes the Noble Ltd. are run separately, a customer tends to associate trust and comfort in a known and established brand. To summarize, exemplary customer service, successful online advertising and special discounted offers made Amazon and books synonymous terms today.
DOUBLECLICK.COM Their direct marketing strategies use customer data to refine marketing messages and increase investment returns. One of their divisions, Abacus is one of the largest databases of buyer behavior in about 90 million households in the United States itself. Another division, www.diameter.net conducts online research to evaluate and understand online campaigns and strategies. Some of their clients include www.macromedia.com, www.nasdaq.com, www.networldsolutions.com and www.palm.net. The web has proven to be an amazing vehicle for advertising and reaching millions without spending a dime on postage and printing. Stu Heinecke Services, an advertising solutions company used personalized cartoon direct mail and achieved response rates as high as 100%. Online ads possess tremendous communication powers. Banner ads placed on sites like CNN, Lycos, CompuServe, Pathfinder and The New York Times showed that:
YAHOO! But, a BPI (Buying Power Index) report reveals that more online buying and popularity of a site don't go hand in hand. Other search engines like Altavista, Excite and Juno seem to have raked in more profits recently. Online advertising was the main revenue for Yahoo!, but they didn't really check on what kind of ads worked online. Immediate success stopped them from evolving and developing other important aspects of e-business. As a result, this year they have been forced to cut budgets and ads, showing that generalized media doesn't work compared to specialized media. Also, all of Yahoo's content is owned by other sites and only licensed for their use. Among the other successful dot-coms, trends revealed that online e-brokers offer the best economic models among consumer-centered Internet companies. Instead of spending on physical infrastructure they concentrated in increasing the volume of transactions. 1-800Flowers.com blended telephone and Internet technologies, Reflect.com, a beauty customization site outlasted other higher profile e-tailers in the business, thus proving that the basic B2C business model is valid. So, what we have seen is that a combination of strategies, smart thinking, brilliant business plans, great and innovative promotional ideas are an integral part of any e-success. There is no doubt that in the near future, an average person anywhere in the world will surf the Internet more often than he or she watches television or uses the telephone. As a result, it makes sense for entrepreneurs of all kinds to come up with ideas of generating income by marketing their products or services to these surfers. Competition in cyberspace may become even fiercer in the future and therefore the right business plan is what will eventually ensure long-term success.
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