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© 2008 Thomson, a part of the Thomson Corporation. Thomson, the Star logo, and Atomic Dog are trademarks used herein under license. All rights reserved.

INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES Chapter 3 Business Models and Strategies

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 3 WHAT IS A BUSINESS MODEL?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 4 A BUSINESS MODEL DESCRIBES The Core Value Proposition Sources and Methods of Revenue Generation Costs of Revenue Generation Planned Growth Trajectory

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 5 FUNCTIONS OF BUSINESS MODELS Articulate Value Proposition Identify Target Market Segment Define Structure of Value Chain Define Cost Structure and Profit Potential Explain Position in Value Network Set Forth Competitive Strategy

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 6 NOT A BUSINESS PLAN Focuses on Customer Value Creation Does Not Focus On Production and Other Operational Aspects Detailed Financial Projections

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 7 THE VALUE PROPOSITION

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 8 iPOD EXAMPLE

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 9 OSTERWALDER ON BUSINESS MODELS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 10 VALUE DELIVERY vs. PRODUCT ORIENTED

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 11 STRONG VALUE PROPOSITIONS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 12 HOW DO COMPANIES ADD VALUE?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 13 REVENUE MODELS Internet Access Advertising & Sponsorship Donations Memberships or Subscriptions Sale or Licensing of Systems Software-Based Services Syndication or Licensing Transactions  E-Commerce, Auctions, Barter Value-Added/ Premium Services

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 14 Web Sites Need Multiple Revenue Streams STRATEGY RECOMMENDATION

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 15

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 16 THE BUSINESS MODELS Aggregator ASP Content Provider Fund Raiser Infomediary  X Marketplace Multichannel Machine to Machine Open Source Peer to Peer Portal Amazon Corio, New York Times Red Cross Stockgroup Media  List Brokers eBay, Craigslist, Exostar Staples Otis Elevator Linux, Apache Kazaa Yahoo!

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 17 AGGREGATOR AMAZON USES PERSONALIZATION AND SEARCH

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 18 OVERSTOCK A FAV AGGREGATOR

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 19 APPLICATION SERVICES PROVIDER

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 20 APPS SAME OR DIFFERENT?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 21 CONTENT PROVIDERS ATTRACT VISITORS USING RSS FEEDS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 22 RSS TO ATTRACT TRAFFIC RSS Widgit

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 23 CONTENT PROVIDERS ATTRACT TRAFFIC

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 24 FUND RAISERS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 25 INFOMEDIARIES DEAL IN DATA

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 26 INFOMEDIARY

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 27 MARKETPLACE

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 28 M2M WILL IMPACT MANY SECTORS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 29 MACHINES MONITOR AND...

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 30 MULTI CHANNEL

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 31 OPEN SOURCE – KEY TO WEB 2.0

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 32 “OPEN” TO DEVELOPERS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 33 PORTALS CONTINUE TO ADD FEATURES

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 34 THE NEW PORTALS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 35 P2P > COMMUNITY

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 36 A NEW CONTENT MODEL?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 37 NEW E-COMMERCE MODEL?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 38 THE FUTURE? Are Social Media The New Model(s)? YES!

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 39 A BUSINESS MODEL DESCRIBES The Core Value Proposition  Plenty of Ability to Connect; What Added Value?  Data/Profile Portability Sources and Methods of Revenue Gen. “Free” Expected; How to Monetize Costs of Revenue Generation  IT Infrastructure  Free Platforms; “Cloud Computing” Planned Growth Trajectory  Will It Scale? Slide 4

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 40 DELIVERY MECHANISMS (CHANNELS?) New Interactive Hardware  Kiosks, Billboards, Gas Pumps, etc. New Media Channels  Mobile, Outdoor, In-Vehicle Video Widgets Other?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 41 SUMMARY Succinct Statement of Business Rationale Little Distinction Between B2C and B2B Models Value = f (Customer Needs, Core Competencies) Require Multiple Revenue Streams Many Business Models  Considerable Overlap -B2C, B2B -Types of Models New Models Are Emerging (Web 2.0)