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Brokerage Advertising Infomediary Merchant Manufacturer. Affiliate Community Subscription Utility. Business Models. Rappa. Brokerage. Bringing together buyers and sellers Fulfillment (e.g., Etrade ) Market Exchange (charge seller a fee; e.g., Metalsite )
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Brokerage Advertising Infomediary Merchant Manufacturer Affiliate Community Subscription Utility Business Models Rappa
Brokerage • Bringing together buyers and sellers • Fulfillment (e.g., Etrade) • Market Exchange (charge seller a fee; e.g., Metalsite) • Business Trading Community (vertical web community) • Buyer aggregator (buying group; Mobshop) • Distibutor (multi-vendor catalog; NECX) • Virtual Mall (hosts merchants via portal; Yahoo! Stores) • Metamediary (VM+processing+protection; zShops) • Auction Broker (conducts auctions for sellers; eBay) • Reverse auction (broker can earn spread; Priceline) • Classifieds (price may or may not be specified) • Search Agent (seeks goods/prices; MySimon) • Bounty Broker (reward for finding items; BountyQuest)
Advertising • Extension of traditional broadcasting model • Generalized Portal (high-volume; Yahoo!) • Personalized Portal (customized; My.Yahoo!) • Specialized Portal (vortal, targeted) • Attention/Incentive Marketing (pay for viewing; CyberGold, IWon) • Free Model (hosting, access, greeting cards; BlueMountain)
Infomediary • Collect and sell information about consumers • Recommender System (users exchange information about products/services; Deja.com; ePinions) • Registration Model (Content site, free to viewers, registration required; NYTimes.com)
Merchant Model • Classic wholesalers & retailers (auction or fixed price) • Virtual Merchant (Amazon; OnSale) • Catalog Merchant (Mail order migrated to the web; Levenger) • Click and Mortar (traditional + Web; Gap, Lands End; B&N) • Bit Vendor (Strictly digital, most often downloaded only; Eyewire)
The Others • Manufacturing Model: Eliminating an intermediary (Flowerbud, Dell) • Affiliate Model: Distributed sites provide click-through; (Amazon; BeFree) • Community Model: Users contribute content, funding, or knowledge on demand; newsgroups (fee version: Guru) • Subscription Model: Pay access; high value is essential (because 46% won’t pay) • Utility Model: Metered usage; pay as you go (Fatbrain)
Why do any E-Business? Meta Group study (Infoworld; 3-27-2000, p.24)
The Landscape: Business Models Economist, Feb 26, 2000
The Models • B to C: Generates transactions from consumers. • B to B: Interbusiness transactions. • B to B to C: Integration of activities from the supply chain to the consumer. Infoworld, 4-3-2000, p. 111 (M. Vizard)
Creative Cash Flow Models • Amazon.com has a unique advantage… • Shared by others?
Creative Approach: Business Method Patents! • Amazon: One-Click shopping • Amazon: Affiliates program • Open Market: shopping carts • Open Market: secure credit card trans. • Priceline.com: name-your-own-price auction • Sightsound.com: selling digital content for download (asking for 1% royalty) Actual Patents Owned (Infoworld, 3-6-2000, p. 30)
Amazon’s Patent • July 1998: Federal Appeals Judge rules that business processes can be patented. • October 1999: Amazon sues Barnes and Noble for one-click orders. • December: Judge agrees with Amazon, forcing B&N to add a step to its checkout process. • March 2000: Patent Office announces plans for tighter oversight of e-commerce patents. • Feb 2001: Judge allows Barnes & Noble to return to one-click ordering! Case still in lower court PC Week: 4-17-2000, pg. 80, Wall St. Journal Feb 2001