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 Model Marketplace Exchange -offers a full range of services covering the transaction process, from market assessment to negotiation and fulfillment
Brokerage Model Buy/Sell Fulfillment -takes customer orders to buy or sell a product or service -includes terms like price and delivery
Brokerage Model Demand Collection System -patented "name-your-price" model -prospective buyer makes a final (binding) bid for a specified good or service -the broker arranges fulfillment
Brokerage Model Auction Broker -broker charges the seller a listing fee and commission scaled with the value of the transaction
Advertising Model -an extension of the traditional media broadcast model -web site, provides content (usually, but not necessarily, for free) and services (like , 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 Model Portal -usually search engine -may include varied content and services -high volume of user traffic makes advertising profitable -includes both personalized and niche portals
Advertising Model Classifieds -list items for sale or wanted for purchase -listing and/or membership fees
Merchant Model -wholesalers and retailers of goods and services Virtual Merchant (e-tailer, pure play) -operates solely over the internet
Merchant Model Catalogue Merchant -mail-order business with web-based catalogue
Merchant Model Click and Mortar -brick-and-mortar retail with web storefront
Merchant Model Bit Vendor -deals strictly in digital products and services -sales and distribution over the web
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
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 Model Open Source -software developed collaboratively by global community -revenue from related services such as: -systems integration -product support -tutorials and user documentation (watch video)
Community Model Open Content -content developed collaboratively by global community of volunteer contributors
Community Model Social Networking -connect individuals along common interests (romance, hobbies, profession, school, family) -provides opportunities for contextual advertising and premium subscriptions