1. 1 C5 - February 25, 2008 Business 54 - Introduction to eCommerce Spring 2008 C5 - February 25, 2008

2. 2 Class Game Plan C5 - February 25, 2008  Re-Cap of Business & Revenues Models.  eMarketplaces.  eTailers.

3. 3 C5 - February 25, 2008C2 - February 13, 2008 Business & Revenue Models Business Models  Business to Consumer.  Business to Business.  Business to Business to Consumer.  Consumer to Business.  Communities.  Exchanges-Marketplaces.  Governmental.  Peer to Peer.  Media. Revenue Models  Banner-Advertising.  Subscription.  Transactional.  ‘Begging’-Donations.  Middlemen.  Taxation.

4. 4 C5 - February 25, 2008 Business to Consumer:  What we are most familiar with in the Off-Line world.  Think Proctor & Gamble or Yahoo.  The Household Names of the Internet are B2C companies.  Traditional B2C Markets-Industries are divided into:  Market Leaders  Followers  Niche Players  Bad economic model for the seller!!!! Types of Business Models C5 - February 25, 2008

5. 5 Business to Business:  You sell your product to the companies who sell the finished product to end consumers.  Think Levi Strauss of yesteryear or a supplier to General Motors.  B2B is essentially a small club of sellers and buyers (or an oligopoly).  Very good economic model for both the buyer and the seller!!!! Types of Business Models C5 - February 25, 2008

6. 6 Peer to Peer:  Partnerships, usually on the distribution side.  Think Amway or Napster.  Not a lot of them.  Difficult economic model to maintain over time Types of Business Models C5 - February 25, 2008

7. 7 Communities:  Collection of like-minded people who share attributes or hobbies-interests.  Think your local church group or alumni organizations or AOL.  Size / number of active community members is THE critical success factor. Types of Business Models C5 - February 25, 2008

8. 8 Exchanges-Marketplaces:  Where buyers and sellers meet.  Unlike a community, exchanges may limit membership.  Think NYSE or eBay.  Need both buyers and sellers to be successful.  Usually only one per industry grouping-product. Types of Business Models C5 - February 25, 2008

9. 9 Coercive-Governmental:  You have to use a proscribed channel-means to conduct business with the government entity.  Think the DMV and auto tags renewal or paying property taxes on line.  Unlike other models, no impact upon current operating model:  Funded by tax monies, not net income.  Move to automate not to transform-reengineer processes.  eGov is the Hot Area of technology right now. Types of Business Models C5 - February 25, 2008

10. 10 C5 - February 25, 2008 Media:  Still evolving, but combines elements of community with entertainment.  Think Warcraft, KRML, Rush Limbaugh and ESPN.  Where the action is! Types of Business Models C5 - February 25, 2008

11. 11 C5 - February 25, 2008 Traditional and eCommerce Revenue Models  Banner-Advertising  Subscription  Transactional  ‘Begging’-Donations  Middlemen  Taxation Overview of Revenue Models C5 - February 25, 2008

12. 12 C5 - February 25, 2008 Banner-Advertising:  The original Web-Internet Revenue Model:  Yahoo  TV-like  All about eyeballs!  Has morphed over time to include Pop Ups, Dancing Bunnies, Spam and Re-Directs-Takeovers.  Measured in CPM (Cost Per Thousand eyeballs) --- $3CPM:  Varies by ‘targeted audience’ --- more descriptive demographics = better.  Ranges today anywhere from $1.5CPM to $5.00CPM.  During the Boom, CPM was often in the $75-$100 range.  Cannot build an eCommerce business today using a Banner Model – At best can supplement other revenue sources Types of Revenue Models C5 - February 25, 2008

13. 13 C5 - February 25, 2008 Subscription:  Just like magazine and newspapers.  Fixed charge every month.  Subscription fees range from $9.99 to $19.99 per month.  Liable to credit card gaming.  Best Revenue Model on the Web today. Types of Revenue Models C5 - February 25, 2008

14. 14 C5 - February 25, 2008 Transactional:  Selling goods and services to consumers or businesses.  These are the eTailers:  Amazon  Wal-Mart  Target  Expedia  Low margins  Need High Volume=lots of transactions  Repeat business and customers is key  Seems to work best for those which offer both Brick-and-Mortar and an On-line presence. Types of Revenue Models

15. 15 C5 - February 25, 2008 ‘Begging’-Donations:  Think Jerry Lewis Telethon or PBS Fundraising Campaigns.  Usually not sustainable if frequently used.  Lots of effort for very small gifts.  Successful usually for communities.  Primary source of ‘revenue’.  Used in conjunction with some sort of Transaction Revenue Model - lines are blurry Types of Revenue Models

16. 16 C5 - February 25, 2008 Middlemen:  Revenue Model employed by Marketplaces:  NYSE  EBay  Homestore.Com  Extract a fee for bringing buyers and sellers together:  Not exactly like a commission.  Fee is per Transaction.  No risk in the transaction or event. Types of Revenue Models

17. 17 C5 - February 25, 2008 Taxation:  The cost of supporting the site is provided via your State/Local and Federal tax payments.  Sometimes funded via user fees – like paying property taxes on line.  May also be done via grants to non-profits and other government agencies:  Universities, Red Cross, etc.  Little impetus for the site to solicit or assess user feedback. – Little push for constant improvement.  Also, NO COMPETITION!!!!!! No threat of click-aways! Types of Revenue Models

18. 18 C5 - February 25, 2008 Some eCommerce Concepts  Portals.  Disintermediation;  Auctions  ‘Dutch’ auctions;  Marketplaces.  eTailers.

19. 19 C5 - February 25, 2008 eTailers  Why eTailers?  What sells on the internet?  What doesn’t sell on the Internet? And Why?  Can you compete?

20. 20 C5 - February 25, 2008 What is an eMarketplace?  Place where buyers and sellers meet.  Matching of buyer and seller needs.  Eases transaction / reduces ‘Friction’.  Infrastructure Cocoon.

21. 21 C5 - February 25, 2008 21 C5 - February 25, 2008 Types of eMarketplaces  Portals.  Malls.  Storefronts.  Intermediaries.  Search Engines. Let’s go visit some!

22. 22 C5 - February 25, 2008 22 C5 - February 25, 2008 Questions…… (and maybe some) Answers