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Ebusiness - Models
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Business models are perhaps the most discussed and least understood aspect of the web. There is so much talk about how the
web changes traditional business models. But there is little clear-cut evidence of exactly what this means. In the most basic
sense, a business model is the method of doing business by which a company can sustain itself -- that is, generate revenue.
The business model spells-out how a company makes money by specifying as to where it is positioned in the value chain.
Some models are quite simple. A company produces a good or service and sells it to customers. If all goes well, the revenues
from sales exceed the cost of operation and the company realizes a profit. Other models can be more intricately woven.
Broadcasting is a good example. Radio, and later television, programming has been broadcast over the airwaves free to anyone
with a receiver for much of the past century. The broadcaster is part of a complex network of distributors, content creators,
advertisers (and their agencies), and listeners or viewers. Who makes money and how much is not always clear at the outset.
The bottom line depends on many competing factors.
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Internet commerce will give rise to new kinds of business models. That much is certain. But the web is also likely to
reinvent tried-and-true models. Auctions are a perfect example. One of the oldest forms of brokering, auctions have been
widely used throughout the world to set prices for such items as agricultural commodities, financial instruments, and unique
items like fine art and antiquities. The Web has popularized the auction model and broadened its applicability to a wide
array of goods and services.
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Business models have been defined and categorized in many different ways. This is one attempt to present a comprehensive and
cogent taxonomy of business models observable on the web. The proposed taxonomy is not meant to be exhaustive or definitive.
Internet business models continue to evolve. New and interesting variations can be expected in the future.
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The basic categories of business models discussed in the table below include:
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eCommerce
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