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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 VALUE DELIVERY vs. PRODUCT ORIENTED

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 9 HOW DO COMPANIES ADD VALUE?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 10 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 11 Web Sites Need Multiple Revenue Streams STRATEGY RECOMMENDATION

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 12

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 13 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 14 AGGREGATOR AMAZON USES PERSONALIZATION AND SEARCH

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 15 OVERSTOCK A FAV AGGREGATOR

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 16 APPLICATION SERVICES PROVIDER

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 17 CONTENT PROVIDERS ATTRACT VISITORS USING RSS FEEDS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 18 RSS TO ATTRACT TRAFFIC RSS Widgit

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 19 CONTENT PROVIDERS ATTRACT TRAFFIC

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 20 FUND RAISERS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 21 INFOMEDIARIES DEAL IN DATA

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 22 INFOMEDIARY

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 23 MARKETPLACE

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 24 M2M WILL IMPACT MANY SECTORS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 25 MACHINES MONITOR AND...

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

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 27 OPEN SOURCE – KEY TO WEB 2.0

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 28 “OPEN” TO DEVELOPERS

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 29 PORTALS CONTINUE TO ADD FEATURES

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 30 THE NEW PORTALS?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 31 P2P Affiliate Programs? Is Partnership Another Model?

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 32 THE FUTURE? Are Social Media The New Model(s)? YES!

Internet Marketing: Integrating Online and Offline StrategiesCopyright 2008 Atomic Dog/Thomson Publishing 33 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 34 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 35 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)