E Commerce Revenue Models Used On The Sites Computer Science Essay

Published:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Twitter is a social networking site added with some blogging features. Twitter has been recognized as a revolution in the world of social networking websites. Although the co-founder-cum-CEO of Twitter, Evan Williams has mentioned that he is satisfied with the current revenue and growth trend of Twitter, but Twitter is in fact generating revenue by monetizing many of its features. Even the company's investors have expressed similar views. Twitter is still generating huge revenue from different platforms. These modes are as following:

You Tube is a website owned by Google where videos can be shared. A user can take a free account on You Tube and upload any videos and share it amongst other users. This service is presently free and the company does not take any charges from users for uploading or watching any videos (Lastufka Alan, 2008). You Tube generates revenue through the following models:

Overlying ads at the bottom of the videos. When these ads are clicked, the videos are paused and the ad is launched

The site is planning to generate revenue in the future through pay-per-view module. In this revenue module, users will have to pay for watching and downloading videos

Another module being planned for future is that users can be charged for viewing more than a limited number of videos and they will also have to pay for visiting some parts of the website.

Yahoo! Group

Yahoo! Group started its internet career as an email service provider (Miller Michael, 2000). Gradually, it broadened its profile as a web-page providing myriad of information on difference subjects like news, business, finance, media, groups, search engine and more. Today, in addition to its email and search engine service it hosts a collage of difference e-commerce services. The revenue generation points of Yahoo! Group are as following:

In the financial year 2009, 88% of Yahoo! Group's revenue was generated by marketing its services. The major portion of this revenue was contributed from the earnings from search advertising, in which advertisers pay for getting a higher rank on the search engine results.

Display ads and contextual ads also generate revenue for Yahoo!

Facebook

Facebook is a very popular social networking site, started in February 2004, it is owned privately and as of July 2010, it was visited by more than 500 million active users (Hall Starr, 2009). The main revenue models of Facebook are as following:

The flyer application of Facebook carries advertisements to its users

Virtual currency of Facebook, called credits is used by users to buy virtual goods in games and applications. Users are awarded ten credits for every dollar spent by them on Facebook.

MySpace

MySpace was the most active social networking website, until in 2008 when facebook took over this title (Sankar Krishna, 2009). MySpace's revenue model is as following:

Targeting MySpace users on the basis of their behavior

Revenue generated from advertising on websites and affiliated networks

MSN

MSN is a multi-faceted web services provider. It consists of different services like MSN Mail, MSN Encarta, Live Messenger, MSN Music etc. The revenue generating model of MSN is as following:

Revenue from paid advertisements

Revenue from premium services

Recommended Site to Wealth Management firm

Facebook is one of the best contenders for an investment option amongst the six websites analyzed in the above columns (Dunay Paul, 2009). It has the highest following of satisfied users in terms of its experience in web-site field and user-friendly modules. New users are easily attracted towards it. Facebook has been in the forefront when it comes to adapting to changing requirements of time. Although, sometimes this attribute has become as a disadvantage to its portfolio because some users find it uncomfortable to adapt to constant changes. The successful experimentation and application of the mobile phone apps is a ready example of Facebook's future friendly vision (Awl Dave, 2009). Facebook has stepped ahead to embrace this technology at a time when other competitors are only probing the success meter of this revenue model. This open-to-initiate revenue making mechanism of Facebook brings it to the fore-front as a flexible social networking website. The disadvantage of having a weak shield to protect the users from spam and fraud emails doesn't affect Facebook's prospects because this weakness is prone to almost all businesses on the internet (Payton Susan, 2009). On the other hand, Facebook provides its users with many safety mechanisms which minimize the overall effect of its disadvantage.

SWOT analysis of Facebook

SWOT analysis of Facebook is being carried out here in order to find the company's strengths, weaknesses, opportunities and threats :

Strengths

Simple and attractive website design for convenient human and computer interaction

Global reach of the services provided by it on its website

Customer count in millions due to the free cost in joining Facebook

Support on mobile phone apps for use of mobile users

Weaknesses

A weak security by third-party provider

Facebook advertisements attracting frequent fraud and spam emails

Opportunities

It has made itself a part of the present trend

Charges can be taken from third party applications. Companies selling products to Facebook users can be charged on share basis.

Facebook has the unique advantage of reaching mobile apps with its services. It can explore many opportunities in this sphere

Threats

Frequently changes the user interface, which can make users feel uncomfortable

The fact that Facebook, once a new-entrant toppled MySpace and Orkut, similarly any new entrant can take Facebook's place.

There is no limitation for any new competitor to place its new and innovative services for users.

Future prospects (over 5 years) and Medium Term (5 years) prospects for Facebook

The SWOT analysis of Facebook gives the inference that the medium and long-term prospects of Facebook for future are positive (Schawbel Dan, 2009). Facebook uses innovative and new modes for advertisements and for reaching the target audience. Different methods are being employed for this purpose. For instance the concept of virtual branded gifts is also a form of this method. The huge count of more than 500 million active users, as of July 2010, provides a sea of opportunity for Facebook to experiment and generate new revenue modes. The rate at which this active user count is increasing gives ample proof that in the next 5 years, the number of Facebook users is not going to show any de-growth. Compared to 6 years ago, when Facebook was brought forth for users to join, today it has achieved an exponential growth. Hence, it is completely rational to predict that in the future, Facebook is not going to see any decline in the number of users (Gunelius Susan, 2010). The business model of Facebook has the following attributes: a good strength in business, very low risk in business, high scope of opportunities and minimal weakness. Hence, for the investment of wealth management firms, Facebook is the perfect choice.

Customer Centric Design

The objective of this section is to elaborate examples of good, average and bad conformation to guidelines for website design.

Example of Good Adherence to the Website design Guidelines

The example for this case study is www.google.com. Google website adheres respectably to the guidelines of a customer centric design (Yang Kai, 2007). Since heavy graphics have not been used on Google, the page loads very fast. The site provides perfectly for the requirement of the user, because the user is interested only in searching keywords. Other clutters like frills, advertisers and loads of hyperlinks, as with other websites, are particularly not included in Google's website. The site is an example of a simple design. It consists of a bar-space for entering the keyword and a search button to initiate the search process. The top left hand corner of the page is provided with links for different categories for the user to get further details. Google has had regularly been taking feedback from its users in making changes to the design of its website. Marketing and business jargon has been completely kept away from the search page (McGrail Anna, 2008). On the other hand concise text suggestions are displayed when user enters keywords in the search bar. Google has also displayed promptness in moving over to the application of mobile internet, by developing and launching the mobile version of the search page. This mobile version also comes with the same user friendly format. This way Google has been successful in keeping user experience same on both the platforms. In spite of huge competition in search engine domain, Google has been successful through its high customer-centered design. The competition can be gauged from the fact that every web service has its own search engine.

Example of Moderate Adherence to the Website design Guidelines

The example for this case study is Teetonic.com. This site is designed keeping the navigating requirements of its users in mind. The products on this site are categorized according to groups that have been arranged in a way that users expect them to be arranged in. Hence, it becomes very easy for users to find the products required by them. For instance, all items related to computers, like computer parts, laptops, flash memory etc are all grouped under computer section. The search and navigation boxes are conveniently placed in order to facilitate users to find the relevant information promptly. Marketing and business language have been avoided in the description of products, so they are easy to understand. Although, the site upkeeps this discipline to use simple language, but the users tend to break this rule. On multi-browsers, teetonic is not user friendly. In the Firefox browser, the navigation panel looks disarranged (Harvey Greg, 2009). In textual mode, the words get spread out on the page without any symmetry. The site supports proper contrast for color blind users, but the contributions from users do not comply with this guideline. Users are free to design the products that a color blind user may have difficulty in viewing.

Example of Bad Adherence to the Website design Guidelines

The example for this case study is www.shoppersstop.com. This is a business website designed for dealing in women's garments. Although the site is full of images of models cladding different garments, but mostly there is no sync between the product and the image. The buying process is complicated for a user. After taking a few keystrokes, the website hangs. The site also hosts advertisements of search engine optimization, which are irrelevant for user's interest. These advertisements are not related to women clothing. The advertisements at the bottom of the homepage are composed of contrasting colors which is repelling for the users. Even though the content on the site is readable, but it is more or less irrelevant. It is not compatible with multi-browsers. So much so that on testing the site with different browser, no image was displayed. The contrast on the site is not optimized for color blind users. The overall looks are gaudy and not pleasing for users. Although, the site aims to sell different retail brands, but it does not provide any information about the brands adorned by the models on its homepage. Some links on the site have been found to be broken. Hence, the above analysis of this website does not adhere to the guidelines for customer centric website design.

Are there still serious eCommerce website around that are making a lot of mistakes

The objective of an e-commerce website is to generate high revenue, but it is only after their thorough analysis that one realizes their conformity to website design guidelines (Darie Cristian, 2007). Extremely poor designed sites have not been found because the revenue figures get directly affected for poorly designed e-commerce sites. Hence, it can be said that it is very rare to find any business oriented e-commerce site that errs badly in conforming with website design guidelines.

News Subscriptions

Rupert Murdoch declared he was going to charge for all of his company's web content. 

Analyze this issue and reinforce your conclusions using information learned in this subject (e.g. Revenue Models). Refer to for some background on this issue.

This case study is an example of an organization which aims to add more revenue generation modes to its portfolio in order to lift the cash in-flow. In the present case, Rupert Murdoch's company was dependent upon the advertisement income for its revenue. But, since it was not able to grow the revenues from this one source, it planned another source by charging for the web content of the company. This revenue model is called as subscription-advertising model. But the doubt in everyone's mind is that whether this model will generate revenue or not?

Study of analogous cases in the past has revealed that this kind of initiatives have experienced mixed response. A case of USA.net is worth mentioning here. This website provided free email service and it was very popular also. But the recession of 2001 forced this website to support its business model by increasing its revenue. Thus it changed its free email service to a subscription based email provider. This step led to most users shifting to other free email providers. Another relevant case study is that of Northern Light. It was a free search engine website, which also switched to a subscription-based service. But, this they did by changing the revenue model and profile. The website transformed from a search engine to a provider of research articles.

This analysis of websites makes it clear that online businesses change their revenue models in tandem with the requirement of times. Hence, the step taken by Rupert Murdoch to channel new revenue source is not surprising. But, it is to be noted that Rupert Murdoch's competition is offering free news service with an equal quality as theirs. Hence, it is reasonable to consider that most of its users will move towards the competitor news service providers. So, a more rational decision would be to maintain some free area on the web content. Analytical reports and tables can be included under the paid services area.

Writing Services

Essay Writing
Service

Find out how the very best essay writing service can help you accomplish more and achieve higher marks today.

Assignment Writing Service

From complicated assignments to tricky tasks, our experts can tackle virtually any question thrown at them.

Dissertation Writing Service

A dissertation (also known as a thesis or research project) is probably the most important piece of work for any student! From full dissertations to individual chapters, we’re on hand to support you.

Coursework Writing Service

Our expert qualified writers can help you get your coursework right first time, every time.

Dissertation Proposal Service

The first step to completing a dissertation is to create a proposal that talks about what you wish to do. Our experts can design suitable methodologies - perfect to help you get started with a dissertation.

Report Writing
Service

Reports for any audience. Perfectly structured, professionally written, and tailored to suit your exact requirements.

Essay Skeleton Answer Service

If you’re just looking for some help to get started on an essay, our outline service provides you with a perfect essay plan.

Marking & Proofreading Service

Not sure if your work is hitting the mark? Struggling to get feedback from your lecturer? Our premium marking service was created just for you - get the feedback you deserve now.

Exam Revision
Service

Exams can be one of the most stressful experiences you’ll ever have! Revision is key, and we’re here to help. With custom created revision notes and exam answers, you’ll never feel underprepared again.