Business Models u Brokerage u Advertising u Infomediary u Merchant u Manufacturer u Affiliate u Community u Subscription u Utility Rappa

Brokerage u Bringing together buyers and sellers u Fulfillment (e.g., Etrade)Etrade u Market Exchange (charge seller a fee; e.g., Metalsite)Metalsite u Business Trading Community (vertical web community) u Buyer aggregator (buying group; Mobshop)Mobshop u Distibutor (multi-vendor catalog; NECX)NECX u Virtual Mall (hosts merchants via portal; Yahoo! Stores)Yahoo! Stores u Metamediary (VM+processing+protection; zShops)zShops u Auction Broker (conducts auctions for sellers; eBay)eBay u Reverse auction (broker can earn spread; Priceline)Priceline u Classifieds (price may or may not be specified) u Search Agent (seeks goods/prices; MySimon)MySimon u Bounty Broker (reward for finding items; BountyQuest)BountyQuest

Advertising u Extension of traditional broadcasting model u Generalized Portal (high-volume; Yahoo!)Yahoo! u Personalized Portal (customized; My.Yahoo!)My.Yahoo! u Specialized Portal (vortal, targeted) u Attention/Incentive Marketing (pay for viewing; CyberGold, IWon) CyberGoldIWon u Free Model (hosting, access, greeting cards; BlueMountain) BlueMountain

Infomediary u Collect and sell information about consumers u Recommender System (users exchange information about products/services; Deja.com; ePinions) Deja.comePinions u Registration Model (Content site, free to viewers, registration required; NYTimes.com) NYTimes.com

Merchant Model u Classic wholesalers & retailers (auction or fixed price) u Virtual Merchant (Amazon; OnSale)AmazonOnSale u Catalog Merchant (Mail order migrated to the web; Levenger)Levenger u Click and Mortar (traditional + Web; Gap, Lands End; B&N)Gap Lands EndB&N u Bit Vendor (Strictly digital, most often downloaded only; Eyewire)Eyewire

The Others u Manufacturing Model: Eliminating an intermediary (Flowerbud, Dell)FlowerbudDell u Affiliate Model: Distributed sites provide click- through; (Amazon; BeFree)AmazonBeFree u Community Model: Users contribute content, funding, or knowledge on demand; newsgroups (fee version: Guru)Guru u Subscription Model: Pay access; high value is essential (because 46% won’t pay) u Utility Model: Metered usage; pay as you go (Fatbrain)Fatbrain

Why do any E-Business? any E-Businessany E-Business Meta Group study (Infoworld; , p.24)

The Landscape: Business Models Target B C B Source of Goods, Info C B to B: E-Steel, Free Markets B to C: Amazon, Dell C to B: Priceline C to C: Ebay, QXL Economist, Feb 26, 2000

The Models u B to C: Generates transactions from consumers. u B to B: Interbusiness transactions. u B to B to C: Integration of activities from the supply chain to the consumer. Infoworld, , p. 111 (M. Vizard)

Alphabet Soup? Target of Goods, Information BCG Source BB to BB to CB to G CC to BC to CC to G GG to BG to CG to G

Movement Toward Integration: B to B to C Target of Goods, Information BCG Source BB to BB to CB to G CC to BC to CC to G GG to BG to CG to G

Creative Cash Flow Models u Amazon.com has a unique advantage… u Shared by others?

Creative Approach: Business Method Patents! u Amazon: One-Click shopping u Amazon: Affiliates program u Open Market: shopping carts u Open Market: secure credit card trans. u Priceline.com: name-your-own-price auction u Sightsound.com: selling digital content for download (asking for 1% royalty) Actual Patents Owned (Infoworld, , p. 30)

Amazon’s Patent u July 1998: Federal Appeals Judge rules that business processes can be patented. u October 1999: Amazon sues Barnes and Noble for one-click orders. u December: Judge agrees with Amazon, forcing B&N to add a step to its checkout process. u March 2000: Patent Office announces plans for tighter oversight of e-commerce patents. u Feb 2001: Judge allows Barnes & Noble to return to one-click ordering! Case still in lower court PC Week: , pg. 80, Wall St. Journal Feb 2001