page director: Brian D. Butler

contributors:   

if you are interested in contributing see here

 

 

General Business Model summary: Start up Costs: Operating Margins at Internet companies Early-Stage Technology focus:   KookyPlan Reviews of business models:  Information database: Employment sites - Music sites: outsourcing Paying online - Photos & Videos: Other interesting sites: Shopping - Search: Social networking - Interesting Presentation  - keys to making money on the internet Advertising - supported Internet business models Types of Ad-based strategies More business- model types: Web 2.0...what is it?  Wikipedia on dot-com companies: Interesting ideas

 

 

General Business Model summary:

 

Start up Costs:

 Low statup costs:  that's why there have neve beeen so many small start-up's (facilitated by the Internet and the myriad of services it offers to keep your overhead down, while enjoying similar capabilities as large companies).  see our guide:  raising capital - ideas for the entrepreneur

 

 

Operating Margins at Internet companies

see:  operating margin

 

 

 

 

 

Early-Stage Technology focus:  

In KookyPlan, we are busy identifying trends in new technologies that might be of particular interest to early-stage investors.  Some of the trends that we are following can be found in our guide to new trends in Technology , including reviews of the following topics:

 

• tech trends to watch

• Internet-based business models

• bridging the digital divide

• Clean-tech
• making technology affordable

• telecom industry trends
• Internet
• mobile web
• search engine technology

• Cloud Computing
• Open Innovation model
• Social bookmarking
• Software as service
• semantic web
• Mobile Web
• Making technology affordable
• VoIP
• Convergence of Internet and television
• Ultra Mobile PC's
• Developer Platforms (for social networking companies)
• Media Disruption
• RFID into everything
• Taking the internet "off line"
• Outsourcing popular in tech startup community
• life sciences

• socially responsible investing
• and much, much more can be found in our review of tech trends to watch

 

 

KookyPlan Reviews of business models: 

 

Information database:

wikipedia , about-com

 

Employment sites -

Simply Hired, Jobster

 

Music sites:

SellaBand

 

outsourcing

eLance

 

Paying online -

PayPal

 

Photos & Videos:

Photobucket

 

Other interesting sites:

BitWine

 

Shopping -

Orbitz , Priceline-Com , eBay ,

 

Search:

google ,

Yahoo 

 

Social networking -

 

facebook

MySpace

LinkedIn ,

Hoovers Connect _ Visible Path

 

 

 

 

Interesting Presentation  - keys to making money on the internet

 

 

 

Advertising - supported Internet business models

 

• These are the companies that set up a website and try to make their revenue off of the little ads that are placed along with the content. Some famous examples of companies that make money off of the advertising model are google and Yahoo

 

 

The majority of websites that try to make money off of advertising start off by using a product from google called adsense. This product is very simple to use, which allows individual websites to place ads on their site for very little effort. The drawback is that Google takes a good portion of the ad revenue (the actual amount is unknown.

 

The model - simplified

 

assume $1 per click on each ad.

assume that 1 person in each 100 will click on an ad.

so, if you want to make $30,000 per year off of ads, you will need 30,000 x 100 = 3 million visitors in a year

 

The problem is that many ads pay significantly less than $1 per click.

Also, not evey site is able to get 1 in 100 to click on the ads (many people find them annoying)

So, if the numbers are more like $0.50 per ad and just 1 in 200 click...

 

 

The web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case, a web site, provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole source of revenue for the broadcaster. The broadcaster may be a content creator or a distributor of content created elsewhere. The advertising model works best when the volume of viewer traffic is large or highly specialized.

 

Note: TV commercial advertising starts at $2.5 million for a Super Bowl Ad

Internet advertising still has along way to go!

 

Types of Ad-based strategies

 

Portal -- usually a search engine that may include varied content or services. A high volume of user traffic makes advertising profitable and permits further diversification of site services. A personalized portal allows customization of the interface and content to the user. A niche portal cultivates a well-defined user demographic. Yahoo

 

Classifieds -- list items for sale or wanted for purchase. Listing fees are common, but there also may be a membership fee. Monster.com , Craigslist.com, Match.com

 

User Registration -- content-based sites that are free to access but require users to register and provide demographic data. Registration allows inter-session tracking of user surfing habits and thereby generates data of potential value in targeted advertising campaigns. NY Times Digital

 

Query-based Paid Placement -- sells favorable link positioning (i.e., sponsored links) or advertising keyed to particular search terms in a user query, such as Overture's trademark "pay-for-performance" model. google, Overture

 

 

 

 

Contextual Advertising / Behavioral Marketing -- freeware developers who bundle adware with their product. For example, a browser extension that automates authentication and form fill-ins, also delivers advertising links or pop-ups as the user surfs the web. Contextual advertisers can sell targeted advertising based on an individual user's surfing activity. Claria

 

Content-Targeted Advertising -- pioneered by google, it extends the precision of search advertising to the rest of the web. Google identifies the meaning of a web page and then automatically delivers relevant ads when a user visits that page. google. For more information, click here Content Targeted Advertising

 

Intromercials -- animated full-screen ads placed at the entry of a site before a user reaches the intended content. CBS Marketwatch

 

Ultramercials -- interactive online ads that require the user to respond intermittently in order to wade through the message before reaching the intended content. Salon in cooperation with Mercedes-Benz

 

 

 

More business- model types:

Advertising Business Models

• These are the companies that set up a website and try to make their revenue off of the little ads that are placed along with the content. Some famous examples of companies that make money off of the advertising model are google and Yahoo !

 

 

Affiliate Business Models

• These are the companies that not only sell products on their own website, but have also empowered other companies to sell the products for them. One good example is Amazon.com who was one of the pioneers of this practice. It is surprisingly easy to copy and paste their code into your website, and to make revenue off of each sale. Many websites set up as affiliate shops online and act as virtual store fronts for the actual vendor.

 

 

Brokerage Models

• Brokers bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), business-to-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables. The formula for fees can vary.

 

Community Business Models

• These are the sites such as Myspace.com and LinkedIn that are attempting to make money by letting users more efficiently interact with eachother. With all of the fuss about social-networking these days, who hasnt wondered about "how these guys make money?"!

 

Click per discussion

*

 

 

Infomediary Business Models

• These companies collect data about consumers and their consumption habits online. This informatno is extremely valuable to other companies, especially when carefully analyzed and used to target marketing campaigns. Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.

 

 

The Freemium model

• These are the companies that give you a free trial of their software (or website) but they dont give you access to all of the handy little features that you will quickly ralize are quite necessary to really enjoy the website or software at all. The basic free service is free, but they charge for the "premium" package. Free + premium = Freemium

 

mashups

• These are the companies that make money by taking another companies service and adding features, repackaging it, and then attempting to re-sell it to consumers for a premium price. This is widely seen with companies that take a google product such as their maps, and then they add (mashup) different features such as overlaying weather forecasts or travel itineraries.

 

Merchant Business Models

• These are just the companies that are trying to sell products such as furniture, lamps, clothing, books, and so on. In theory the model is bland, but it is interesting to see what some merchants do in order to attract customers and pitch their goods in unique ways. The technology is always changing, and the ones that stay ahead of the game always have an advantage.

 

Manufacturer Direct Models

• The internet distribution of information has allowed many manufacturers the ability to go directly to their customers and sidestep the middlemen (wholesale and retail dealers). This is seen with Dell.com in the computer business and southwest.com in the airline industry. As the technology gets better and better we should see this trend continuing.

 

Subscription Business Models

• This is the dream of every ad-based website. Everyone on the interent would love to find a way to get their customers to pay a regular subscription month after month, year after year. Many companies are very creative in their attempts to convince customers to sign up for yearly subscription services. Good examples are Norton.com in the security business, and in the past America Online, although they have been forced away from the subscription model recently.

 

 

Utility Business Models

• These companies usa a "pay as you go" approach. Unlike subscriber services, metered services are based on actual usage rates. Traditionally, metering has been used for essential services (e.g., electricity water, long-distance telephone services). Internet service providers (ISPs) in some parts of the world operate as utilities, charging customers for connection minutes, as opposed to the subscriber model common in the U.S

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Web 2.0...what is it? 

 

 

Web 2_0 (definition)

 

is it true that all web2.0 business models are advertising supported. That depends which internet camp you are in. Is the internet all about software? Or is the internet all about media distribution? I am in the latter camp … and media distribution has been advertising supported for at least the last century. When you also consider that web2.0 attributes, such as social networks and community aggregation, only make advertising more lucrative by commanding more contextual application and a correspondingly higher CPM, then it makes sense that the web2.0 business model is advertising-based.

 

But what if the internet is about software development? In the absence of shrink wrapping, I think that software is no longer a product that you can sell for money. It is merely an enabler of user experience that helps people get things done. Increasingly, getting things done is about media consumption and community building. Basecamp aside, people are unwilling to pay for most consumer-facing applications. I wonder if that will ever change.

 

If you rewind the clock all the way back, ebay and amazon.com are web2.0 companies – they create networks to engender trust between buyers and sellers, they use reputation managers and recommendation engines, and they highlight simplicity in their business models (if not in their user interface). And yet, they don’t make money through advertising. Instead, they make money by taking a little off the top of transactions. Ebay aggregates buyers for sellers and amazon aggregates sellers for buyers, but their revenue is transaction-based. But again, the “user-customer” doesn’t pay for this, the “seller-customer does.”

 

I know that people scoff at advertising, but isn’t that where the business models need to be centered? Or do the business models even matter as long as yahoo and google are collecting the advertising dollars for us?

 

 

 

 

Wikipedia on dot-com companies:

The Internet Business is a company which does most of its business on the Internet, and (usually) whose internet suffix ends in .com. While dot-com can refer to present day companies, it is also used specifically to refer to companies with this business model during the late 1990s. Many of these startups formed to take advantage of the surplus of venture capital funding. Many were launched with very thin business plans, sometimes with nothing more than an idea and a catchy name. The stated goal was often to "get big fast" i.e. capture a majority share of whatever market was being entered. The exit strategy usually included an IPO and a large payoff for the founders. . (more...)

 

 

 

 

Interesting ideas

Suggest business ideas to others