Revenue model: Google, Amazon.com, eBay

A revenue model outlines how the organization or EC project will generate revenue. The revenue model comprises of five major components which are sales, transaction fees, subscription fees, advertising fees and affiliate fees. So for Google, Amazon.com and eBay, their revenue are as followed:

Google earned revenue from advertising related to its internet search, e-mail, online mapping, office productivity, social networking, and video sharing as well as selling advertising-free versions of the same technologies.

Transaction fees:

Google Answers was an online knowledge market offered by Google that allowed users to post bounties for well researched answers to their queries. Asker-accepted answers cost $2 to $200. Google retained 25% of the researcher's reward and a 50 cent fee per question. In addition to the Researcher’s fees, a client who was satisfied with the answer could also leave a tip of up to $100. In late November 2006, Google reported that it planned to permanently shut down the service, and it was fully closed to new activity by late December 2006, although its archives remain available.

Affiliate fees:

Google Adwords is a pay per click advertising program of Google designed to allow the advertisers to present advertisements to people at the instant the people are looking for information related to what the advertiser has to offer. When a user searches Google's search engine, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results. Google generate most of the revenue from Google AdWords. In year 2005, Google launched the Google Publication Ads Program through which they distribute their advertisers’ ads for publication in magazines. Google recognize as revenue the fees charged advertisers when their ads are published in magazines.

Therefore, people can promote their websites online regardless of budget,they can advertise their business on Google and its advertising networks (Google Adwords). They only pay if someone click on their ads. Take a look at the below diagram, it show Organic listings and Paid listings (Pay per click).

Other than that, Google also earned revenue by pay per action advertising. However, it was then replaced by Conversion Optimizer and Performics Affiliate which enable the business to manage their advertising on a CPA (Cost-per-acquisition) basis.Amazon.com is America's largest online retailer. It started as an online bookstore but soon diversified to product lines of VHS, DVD, music CDs and MP3s, computer software, video games, electronics, apparel, furniture, food, toys, etc.

Sales:

Amazon has steadily branched into retail sales of music CDs, videotapes and DVDs, software, consumer electronics, kitchen items, tools, lawn and garden items, toys & games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, clothing, industrial & scientific supplies, groceries, and more.

Transaction fees:

There are no start-up charges, monthly charges, hidden fees, or long-term contracts

Fees are assessed on a per-transaction basis and vary depending on the transaction amount. They are based on a percentage of the transaction amount plus a per transaction fee.

For Transactions >= $10:

2.9% + $0.30 for all transactions

Volume Discounts:

2.5% + $.30 for all transactions for monthly payment volume from $3k-$10k

2.2% + $.30 for all transactions for monthly payment volume from $10k - $100k

1.9% + $.30 for all transactions for monthly payment volume over $100k

For Transactions < $10:

5.0% + $0.05 for all transactions

Affiliate fees:

There are no monthly fees and no minimum spend - you are charged only when an Amazon customer clicks on your ad and is taken to your Web site. You control not only the maximum price you are willing to pay for that click, but also your daily budget. This allows you to measure the return on your advertising investment and optimize your budget accordingly. Product Ads by Amazon provides a new, highly targeted advertising channel. Amazon's world class shopping experience and product pages ensures you only pay for qualified customers. You don't pay for customers to read about and view your products on Amazon. You only pay when they click on your ad to go to your Web site.
Ebay is an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide.

Subscription fees:

As an eBay Store owner, you’ll pay the monthly subscription fee corresponding to your Store level.

Insertion fees:

If you want to sell on item on eBay, you create a listing using the Sell Your Item form. When you list an item on other eBay sites, you are charged an Insertion Fee for the listing. The Insertion Fee is based on what you decide is the Starting Price of your item.

Final value fees:

If the item sells, you are charged a Final Value Fee if you list on other eBay sites. The Final Value Fee is based on the final amount the item sells for. The Final Value Fee does not include postage costs.

Listing upgrade (Optional):

If you want to add a subtitle or an extra picture to your listing, a charge would be added for each listing upgrade. The charges also depend on the category and format you list in.

Additional Information:

- Google

- Amazon

- eBay