The Revenue Model of Google, Amazon.con, eBay

Today I want to identify the E-commerce’s revenue model of three greatest E-commerce website: Google, Amazon.com, and eBay, the way how they making profit.


Let’s discuss the Amazon.com first, actually it is an online book shop, you may find any book, music, DVD and Videos you want here and as you need you also can make an order. The main model they making revenue which is selling books, beside sales they also earn revenue from advertisement which include Product Ads and Online Display Advertising.

The second website is Google, which is the successful online search engine in the world. They provide fastest and convenient search service for everyone, but they did not charge any fees on searching, did you ever wonder how they making profit? Actually they earn profit from advertisement and licensing, the analysis of Google said that the

advertisement brings 99% income for Google, licensing only 1%, which mean most income of Google is generated from advertisement.

Lastly, eBay—eBay is the world online market place for all buyer and seller. You may trade within local or also can trade to international. Actually eBay conduct the transaction in auction basis, they earned the transaction fee (commission) from each successful transaction made by the bidders or sellers.

These three companies making huge profit every year, but they major business activities is conduct online, therefore we can see that

E-commerce has great potential market

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E-Commerce failure and its causes - Webvan.com

Webvan.com launched in 2000. The online grocer allowed users to surf their site for food, health and beauty items, which would be delivered to their front door via the company's fleet of trucks and drivers. Webvan "couriers" also carried and unloaded groceries in the shopper's kitchen.The company shut down in 2001. The cause of Webvan bankruptcy is growing too fast. In a mere 18 months, it raised $375 million in an IPO, expanded from the San Francisco Bay Area to eight U.S. cities, and built a gigantic infrastructure from the ground up (including a $1 billion order for a group of high-tech warehouses). Webvan came to be worth $1.2 billion (or $30 per share at its peak), and it touted a 26-city expansion plan.
Webvan's abrupt closure wasn't exactly a shock. In its last annual report, the company said there was a strong chance that financial troubles would force the company to shut down.
In the first quarter of the year, Webvan had reported a net loss of $217 million and an accumulated deficit of $830 million. And things only seemed to be getting worse.
"We all knew it was going to happen," said Phil Terry, CEO of Creative Good, a consulting firm that has worked with online grocers. He blamed the company's aggressive expansion into multiple cities, combined with an overly complex website, for causing its demise.
Well, Webvan's demise seemed to have little to do with the quality of its delivery services. Although there are customers who complained of late deliveries or damaged of goods, the grocery services generally received favorable comments from customers.
In fact, Webvan's problems never really had much to do with its customers. It was the lack of customers that was the trouble.
Some people believed that Webvan "may well have 10 or 20 years ahead of its time". And, like many businesses born in the maniacal days of the dot-com boom, it tried to get too big, too fast.

Related Link: http://www.cnet.com/4520-11136_1-6278387-1.html

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E-Commerce Success : eBay

EBay is the one of the success e-commerce that we can seem nowadays. But how the eBay being founded?.

In 1995, that was a man name Pierre Omidyar who starts engage online garage sale at home. After that, he form a company with Jeff Skoll .The first name eBay used was Echo Bay Technology. But, unfortunately, when the company tried to register the domain name echobay.com, they found that it was already in use. So, they shortened the name to eBay.com and then it becomes the name of the website that you have seen today.

Along with growth as a site for buying and selling, eBay worked hard to make their website a community. Items that sell on eBay are listed by categories and anyone with an eBay account can bid on the item of their choice. You can find just about anything you can possibly imagine on eBay, including cars, real estate, collectibles, concert tickets, CDs, clothings, DVDs, and artwork. Rare items can sell at very high prices such as Elvis Presley's ashtray or rare baseball trading cards. When you list an item for auction on eBay it can be seen by millions of people all over the world.

What cause the eBay so successful?

As the world's largest online trading community, eBay allow people to bargain and bid for the item they want and make them really enjoy the competition of the bidding process .

EBay also provide people to pursue their interests and their passions in the areas of their hobbies and their collectibles sites with involve trade activity with a wide range of items. Some of the items sell at eBay also attract people early childhood memories like collecting baseball cards to toy soldiers to Barbie dolls to doll houses, and so forth. Other kind of items like drugs, alcohol, tobacco, used underwear and others are prohibited from selling in eBay.

EBay provide the security like discourage the people from coming to the site to engage in fraud or listing pranks and only register account can bid for the items. If they do so, eBay will suspend their accounts, suspend them from eBay and remove the items from the auction site. This will enhanced the confident and trust of the public toward the eBay.

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The History and Evolution of E-commerce

Commerce—the trading of goods, has been a major drive of human survival since the beginning of recorded history and beyond. Process of buying, selling, transferring, or exchanging products, services, or information via computer network is called E-COMMERCE. It enables the trading of goods, money and information electronically from computer to computer without a need for physical currency or goods to conduct business and without the barriers of time or distance while increasing speed of service delivery.

Evolution 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, in 1960s and the late of 1970s the development of Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) allowed business companies to exchange business information, do transactions, and send commercial documentation electronically. After that, in 1992s where the Mosaic web-browser becomes the first ‘point and click’ browser and it was quickly adapted into a downloadable browser, and in 1994s Netscape which provided users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer arrived.

History of ecommerce is unthinkable without Amazon and eBay which were among the first Internet companies to allow electronic transactions. In 1995s, www.Amazon.com and www.eBay.com are launched. Moreover, in 1998s the development of DSL was allowed quicker access and a persistent connection to the Internet. The development of Red Hat Linux was also another major step in E-commerce growth.

In 2000s a great number of business companies in the United States and Western Europe represented their services in the World Wide Web. 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.


Evolution 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.

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