Samples of E-Business model

The e-Business model, like any business model, describes how a company functions; how it provides a product or service, how it generates revenue, and how it will create and adapt to new markets and technologies. It has four traditional components as shown in the figure, The e-Business Model. These are the e-business concept, value proposition, sources of revenue, and the required activities, resources, and capabilities. In a successful business, all of its business model components work together in a cooperative and supportive fashion.

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Amazon applies a business model of affiliation.  

Amazon supports its users to successfully sell products by either consumer-to-consumer (C2C) or Business-to-Consumer (B2C). So far, it is the largest Internet-based retailer in the United States and world by total sales and market capitalization. Amazon has developed a customer base of around 30 million people. This company makes its money by taking a small percentage of the sale price of each item that sells through its website. Amazon also allows companies to advertise their products by paying to be listed as featured products

  • Value proposition: buy and sell product from anywhere to everywhere
  • Revenue model: charges commission from successful transaction
  • Target customer: anybody
  • Distribution channel: Web

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Google applies the business model of pay per use.

Basically, Google’s majority revenue comes from two advertising platforms — Google AdWords and Google AdSense. According to Google’s income statement,  about 70% of its advertising revenues comes from AdWords, the rest from Adsense.

  • Value proposition: provide a platform to seek optimized information
  • Revenue model: all services are free except advertising
  • Target customer: anybody
  • Distribution channel: Web

Netflix applies the business model of subscription

Netflix specialized and provides streaming media and video on demand both online and physically, as well as online distributor. Basically, Netflix makes revenue from the subscription feeubscription fee.

  • Value proposition: another option of watching streaming media on the internet
  • Revenue model: subscription fee
  • Target customer: anybody
  • Distribution channels: Web + bundling with others, e.g. Apple TV

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Social features

Amazons provides a powerful platform for entrepreneurship at any level.  For many Amazon businesses, they rightly focus on optimizing all the marketing opportunities within the platform to grow their business. Further, it provides a convenient marketplace to sell unwanted products around the house or side income selling collectibles and books.  For small retailers, it provides a massive audience that enables them to turn inventory quicker and clear out the clearance items.

Google allows Google Apps users accessing to Google+,  this company is rolling out support for restricted sharing options, video meetings integrated with other Google products like Gmail, Calendar and Docs, and additional administrative controls within Google+

Netflix doesn’t have a particularly compelling set of social features. The only one which goes social is with Facebook sharing. Netflix introduced Facebook integration to US-based users. After President Obama signed the new Video Privacy Protection Act into law in January 2013,

Data Collection

Amazon collects the purchasing behavior from its 152 million accounts. For years, Amazon uses this data to build a recommendation system that suggests products to people who visit Amazon.com.

Amazon may gather data as follows

  • What did you view (so that they can recommend similar stuff, recommend what other people who reviewed what you have reviewed have purchased)
  • When did you view (to identify busy times of a day, of a week, of a month, of a year, so that [maybe] they can show promos at the busiest time to be noticed)
  • What did you purchase (to recommend similar customers)
  • Your shipping address, phone number etc.

Already in 2003, they used an object-object similarity of collaborative filtering methods, which was at that time state-of-the-art. Since then, Amazon has evolved and improved its recommender engine and now they master this perfectly. They use click-stream data and customer purchase history data from all these 152 million customers each user and displays customized results on personalized Web pages.

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Google

Perhaps there is no other company collects more data than Google as this company identifies its mission is “to organize the world’s information and make it universally accessible and useful,”

• Searches (web, images, news, blogs, etc.) – Google tracks all searches, and now with search becoming more personalized, this information is going to grow more and more detailed and specific user. Google not only get information about what we look for, he also gets to know which search results we click.
• Ad serving – Adwords and Adsense are cornerstones of Google’s financial success, but they also provide Google with a lot of valuable data. What ads are people clicking on the keywords that are advertisers bid and those that are worth more?

• Email – Gmail is one of the three largest email services in the world, as well as competing options from Microsoft (Hotmail) and Yahoo. Email content, both sent and received, is parsed and analyzed. Even from the point of view of safety it is a great service for Google. Google’s email security service, Postini, gets a huge amount of data on spam, malware and email security trends in the enormous mass of Gmail users.

 

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Netflix

Netflix gathers data from 81.50 million streaming customers worldwide. Having this large user base allows Netflix to collect a huge amount of data. With this data, Netflix can make better decisions and ultimately make them happier with their service users.


• When you pause, rewind or fast forward
• What day you look at the content (Netflix has found people watch TV shows during the week and movies during the weekend.)
• The date you are watching
• What time you look at the content

They then analyze this data and see trends of users to understand the commitment to a deeper level. For example, if Netflix saw that 70% of users looked at all the available seasons of a show canceled, this can cause some interest in restarting Arrested Development. Based on analysis result,  Netflix knows there is a good chance users will watch the new season.

 



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