The main source of Google’s revenue is from advertising. For the 2006 fiscal year, the company reported US$10.492billion in total advertising revenues and only US$112million in licensing and other revenues.
Google's revenue model includes Google AdWords, Pay per Click Advertising, Google AdSense, Froogle, GoogleAnswers and their latest advertising program which is Cost per Click model. It earns most of its revenue by allowing other website owners to advertise on their search result pages or by placing these same text ads (AdSense) on other sites based on relevance.
Many businesses that want to put their advertisement online would go to Google AdWords. 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. It is an online advertising payment model in which payment is based on qualifying click-throughs. An advertiser has to pay every time his ad receives a click.
AdSense is an ad serving program run by Google. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. Revenue is generated on a per-click or per-thousand-ads-displayed basis and the ads are administered by Google. AdSense program includes AdSense for search and AdSense for content. Google advertisers are required to pay Google a fee each time a user clicks on one of their ads displayed on Google Network members’ web sites.
Amazon.com was one of the first major companies to sell goods by Internet. Amazon generates revenue primarily by selling books, videos, electronics, and kitchen equipment on domestic and international Web sites, such as Amazon Marketplace.
Amazon Marketplace is Amazon.com’s fixed price online marketplace that allows sellers to offer their goods alongside Amazon’s offerings. Buyers can buy new and used items sold directly by a third party through Amazon.com using Amazon Marketplace. This sales strategy and program has been very profitable for Amazon.com. Amazon charges a commission rate based on the sale price, a transaction fee, and a variable closing fee. The revenue models used by Amazon.com are sales revenue model and transaction fee revenue model.
Moreover, Amazon.com also generates revenue by affiliate revenue model. Amazon was one of the first online businesses to set up an affiliate marketing program. AStore is an Amazon.com affiliate product which website owners can use to create an online store on their site. The store does not allow website owners to sell their own products directly. Website owners pick products from Amazon’s store and earn referral fees on the products purchased by their readers. The fee structure is currently the same as for the other affiliate links and ranges from 4% to 10% of the product price.
AStore
eBay’s main sources of revenue is from fees charged to list items up, picture service fees, listing upgrade fees, final value fees and reservation fees. They charge fees to list an item. For example, for listing of regular items, eBay charges a fee which serves as a starting price. EBay also obtains its revenue by charging a picture service fee. The first picture uploaded in its site is free but the subsequent pictures incur fees. Other than that, eBay obtains its revenue from listing and updating fees. It provides various services to help its users to enhance their advertising or promotion of products but for a fee of course. They also charge final value fees. It is charged when there is a closing bid. Reservation fees is only charged if the item listed is not sold.
Furthermore, eBay generate revenue by sales revenue model through its subsidiary, Half.com, offers fixed price, person-to-person selling of goods, including books, CDs, videos and games, charging a 15% commission on completed sales.Additionally, a portion of Ebay’s revenue also comes from direct advertising on the site, as well as end to end service providers whose services increase the speed of transactions. The acquisition of PayPal, whose products allow the exchange of money over the Internet, brings additional transaction based fee revenue.
eBay generated overall revenue around $6 billion from its three primary business: auctions, payments (PayPal) and communication (Skype).
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