What is a Business Model?

-the method of doing business by which a company can sustain itself

-- that is, generate revenue

What is a Business Model?-some models are complex-radio and TV have traditionally broadcast for free-complex network of

– distributors– content creators– advertisers (and their agencies)– listeners or viewers

-who makes money and how much is not always clear-depends on many competing factors

What is a Business Model?-Internet commerce (eBusiness) has created new business models-but also reinvented existing ones-eBay reinvented the auction model-some firms combine several different models

What is a Business Model?-in some cases, these new business models/methods have even been patented-however, these patents may be challenged in the courts-Google was recently sued for processes associated with its AdWords advertising program

Brokerage Model-these market-makers bring buyers and sellers together and facilitate transactions-B2B, B2C and C2C markets-usually charge a fee or commission for each transaction

Brokerage ModelMarketplace Exchange-offers a full range of services covering thetransaction process, from market assessment to negotiation and fulfillment

http://www.chemconnect.com/index.html

http://www.expedia.com/

Brokerage ModelBuy/Sell Fulfillment

-takes customer orders to buy or sell a product or service

-includes terms like price and delivery

http://www.carsdirect.com/homewww.autotrader.ca

Brokerage ModelDemand Collection System

-patented "name-your-price" model

-prospective buyer makes a final (binding) bid for a specified good or service

-the broker arranges fulfillment

http://www.priceline.com/default.asp

Brokerage ModelAuction Broker

-broker charges the seller a listing fee and commission scaled with the value of the transaction

http://www.ebay.com/

Advertising Model-an extension of the traditional media broadcast model

-web site, provides content (usually, but not necessarily, for free) and services (like email, IM, blogs)

-mixed with advertising messages in the form of on-line ads

Advertising Model-ads may be the major or sole source of revenue for the broadcaster-broadcaster may be a content creator or a distributor of content created elsewhere-works best when the volume of viewer traffic is large or highly specialized

Advertising Model-ads may be the major or sole source of revenue for the broadcaster-broadcaster may be a content creator or a distributor of content created elsewhere-works best when the volume of viewer traffic is large or highly specialized

Advertising ModelPortal

-usually search engine

-may include varied content and services

-high volume of user traffic makes advertising profitable

-includes both personalized and niche portals

www.yahoo.com

Advertising ModelClassifieds

-list items for sale or wanted for purchase

-listing and/or membership fees

www.monster.com

www.craigslist.com

Merchant Model-wholesalers and retailers of goods and services

Virtual Merchant (e-tailer, pure play)

-operates solely over the internet

www.amazon.com

Merchant ModelCatalogue Merchant

-mail-order business with web-based catalogue

www.landsend.com

Merchant ModelClick and Mortar

-brick-and-mortar retail with web storefront

www.barnesandnoble.com

www.indigo.ca

Merchant ModelBit Vendor

-deals strictly in digital products and services

-sales and distribution over the web

www.itunes.com

Manufacturer (Direct) Model-allow the manufacturer to reach buyers directly

-compresses the distribution channel

-can be based on:-efficiency

-improved customer service

-better understanding of customer preferences

www.dell.com

Community Model-viability based on user loyalty

-users invest extensive time and emotion

-revenue can be based on:-sale of ancillary products and services

-voluntary contributions

-contextual advertising

-subscriptions for premium services

Community ModelOpen Source-software developed collaboratively by global community-revenue from related services such as:

-systems integration-product support-tutorials and user documentation

www.redhat.com (watch video) http://magazine.redhat.com/2009/05/19/video-open-source-government/

Community ModelOpen Content-content developed collaboratively by global community of volunteer contributorswww.wikipedia.com

Community ModelSocial Networking-connect individuals along common interests (romance, hobbies, profession, school, family)-provides opportunities for contextual advertising and premium subscriptionswww.facebook.com, www.linkedin.com,www.flickr.com, www.classmates.com