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Creating Value Through E-business Strategy

How do companies such as Expedia, Priceline, Google, Yahoo, Amazon and eBay make money online? (Discuss their business models)

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Yahoo is a Horizontal Portal business model which offers an integrated package of services and content in its Web site. A portal business model attempts to become a user's home base by catering to different segments of society that can address the user's needs in one site. Yahoo offers multiple offerings to its users such as news, search, email, chat, shopping facility, weather forecast, finance, health, movies and many more that its viewers find useful. Yahoo caters mostly to B2C segment.

Among Yahoo's sources of revenue are the following:
? Yahoo Search Submit - a paid inclusion program that allows the advertisers to put their Website links into the natural search results.
? Pay-per-click (PPC) ads placed on top, bottom, and on the right side of the search engine.
? As a portal, Yahoo has long wanted to be a content authority on the Web so they have spent much producing their own content. Among these content pages are Yahoo Answers, Yahoo Sports, Yahoo Real Estate, and a lot more.
? Web hosting for small business and subscription video feeds
? Other advertising such as hosting banner ads, etc.

Expedia's business model is that of a transaction broker business model which processes the online sales, transactions that increase their customers' productivity with their assistance in helping them get things done faster and at less cost. In this model, the buyers and sellers are brought together so that things would be easier for both of them. Being a broker, Expedia charges a fee/commission for every transaction that they have completed.

Expedia's services range from researching, planning, and buying for the whole trip of customers. Its Web site gives direct access to a broad selection of travel products and services and Expedia makes it easier for the customers to research, plan and book their travel needs. Expedia partners feature airline tickets, car rental, hotel reservations and other travel related services from a broad selection of partners.

Expedia runs its business under a diversified business model in which it utilizes both the agency (online travel service provider) and the merchant models. Expedia's role under the agency business model is to be an agent in transactions by passing the customer's reservation and details to the travel supplier/hotel so that they can have commission from the hotel. Expedia receives inventory of hotel rooms and acts as a merchant in the transaction under the merchant model. This model commands higher per-sale profit levels and provides lower prices compared to the agency model.

In addition to Expedia's advertising presence both online and offline media, its brand-building campaign supports the expansion of its distribution channels such as telesales operations, strategic partnerships, etc. through its acquired travel agency network and affiliate program that enables partner sites to drive prospects to co-branded Expedia/partner Web sites.

Priceline employs a "demand collection system," where consumers can save money on a broad range of products and services being offered while sellers can generate revenue from it. The company pioneered the "Name-Your-Price" model where a prospective buyer makes final bid on a certain good or service and the broker ( arranges and completes the transaction. Priceline collects consumer demand for a particular product or service with a price set by customer and relays that demand to the participating sellers. Once Priceline fulfills their requests, the customers could not cancel the offers. Since customers are flexible with respect to their choice of brands, sellers can generate revenue without disrupting pricing structures. With Priceline's enhanced "Name Your Own Price" global hotel service product, the company enhanced its services with new features, e.g., amenity listings for every category of resort and hotel; best price guarantee which gives Priceline savings from the retail prices.

Amazon employs the E-tailer business model as a virtual merchant where it has established itself as an online version of a retail store, where consumers are free to shop at any hour of the day or night and do it anywhere with internet connection. Its main source of revenue is through selling of products. Amazon is a virtual marketplace, a hosting service that charges online merchants with setup, monthly listing of their ...

Solution Summary

2676 words; 7 references; an explanation of how Expedia, Priceline, Google, Yahoo, Amazon and eBay earn online