Saturday, January 31, 2009

An example of an E-Commerce success and its causes

The name "Google" originated from a misspelling of "Googol," which refers to the number represented by a 1 followed by one-hundred zeros. Having found its way increasingly into everyday language, the verb, "google," was added to the Merriam Webster Collegiate Dictionary and the Oxford English Dictionary in 2006, meaning, "to use the Google search engine to obtain information on the Internet. The term of "Googol" was coined by Milton Sirotta, nephew of American mathematician Edward Kasner, and was popularized in the book, "Mathematics and the Imagination" by Kasner and James Newman. Google's play on the term reflects the company's mission to organize the immense amount of information available on the web.

Google began in January 1996, as a research project by Larry Page, who has soon joined by Sergery Brin, two Ph.D, students at Stanford University in California and company was 1st incorporation as a privately held company on 4 September 1998.

Google was an American public corporation, earning revenue from advertising related to its Internet search. e-mail, online mapping, office productivity, social networking and video sharing services as well as selling advertising free version of the same technologies. Google has continued its growth through a series of new product developments, acquisitions and partnerships. Environmentalism, philanthropy and the positive employee relations have been important tenets during growth of Google.

The key reasons for Google's success is a belief that good ideas can and should come from anywhere.
Google's early success is based on several key factors:

  • Technology
    • Along with its innovative approach to page ranking, Google is a purpose-built hardware company, building all its own servers from components it buys directly for their manufacturers. According to Drummond (Google's General Counsel), Google now operates the world's largest distributed computer system.

  • Business Model Innovation
    • By perfecting the nature of targeted ads, Google not only has created a highly effective revenue generator, it has produced what it hopes to be a better experience for its users. It is Google's goal to make their targeted ads at least as relevant and useful to users as the search results themselves.
  • Brand
    • According to Drummond, a European study recently determined Google to be the number one most recognized worldwide brand. Indeed, Google has become a verb ("I can't wait to get home and Google him") which poses real challenges to a company seeking to protect the strength of its mark.
  • Focus On The User Experience
    • Product decisions at Google are driven by optimizing for the user experience first and for revenue second. The folks at Google firmly believe that the better the user experience, the more easily money will follow.
  • Bottom up Approach
    • Nurturing great ideas from all levels of the company, not just the top.
  • Creativity
    • Demand creativity by giving employees "free thinking time" to develop pet projects, no matter how far from the company's central vision.
  • Managing Innovation
    • Google management adopted unconventional management style. Engineers are encouraged to work in a small team to improve productivity. Management is always available to employees so that their idea can be heard.
I believe that all of these are important factors in developing any great technology company. Powerful customer-focused technology with an eye towards making money -- that's pretty much the formula. Even brand, which can be prohibitively expensive to develop ahead of customer traction, will likely follow product leadership. Google's success isn't rocket science, it's just good old fashion company building. Good for them for the discipline. It's an excellent model to follow.

The History and Evolution of E-commerce

Introduction

What is E-commerce? Well, E-commerce is any business related transactions partially or totally carried out by electronic medium especially on internet using Open networks or Closed network. It is the process of buying and selling or exchanging products, services, and information via computer networks.

History

It all started during 1960’s. Electronic Data Interchange (EDI) was formulated. This is a set of standard instructions to interchange data and to carry out business deals electronically. Then in 1969 ARPANET, was developed by Americas department of defence for researching new reliable networks and later this enhanced into Internet that was purely used as a research tool for nearly 20yrs. In 1991, Tim Berners-Lee developed World Wide Web at CERN that started the first Internet transaction. These technology supported exchange of data that was in text format only. The first business deal took place in 1994 and since then there have been billions of dealings. Later in 1998 DSL was launched into the market that provided much faster access and persistent connection to the internet. In 1998, AOL swamped the market and had about 1.2 billion sales over a period of 10 weeks from online sales. That was one of the brightest points in e-commerce history. Amazon and eBay were the first International companies that implemented electronic transactions. Initial public offerings by Amazon, and EBay had tremendous success. Soon after, almost everyone started implementing business on internet.



Evolution

1984

EDI, or electronic data interchange, was standardized through ASC X12. This guaranteed that companies would be able to complete transactions with one another more reliably.


1992

CompuServe offers online retail products to its customers. This gives people the chance to buy things off their computer.


1994

Netscape arrived. Providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer.


1995

Two of the biggest names in e-commerce are launched that were Amazon.com and eBay.com.

1998

Digital Subscriber Line provides fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money, online.

1999

Retail spending over the Internet reaches $20 billion, according to Business.com.

2000

The U.S government extended the moratorium on Internet taxes until at least 2005.


Conclusion

In conclusion, we can say that the usage of E-commerce has really boom in the past two decades. Much has evolved after its yester years and many inventions have been made to make e-commerce what it is today. 3 things have been a main factor to the evolving of e-commerce that is online reliability, safety and confidentiality. Because of these factors, people are more likely to use it then traditional method and are able to improve on the usage of e-commerce in their daily life. As you can see e-commerce is the future of doing business and it has the potential to grow even better that it is already.

Related Links:

http://www.smallbusinessnewz.com/

http://newmedia.medill.northwestern.edu/courses/nmpspring01/brown/Revstream/ecommerceindex.htm






Friday, January 30, 2009

Identify and compare the revenue model for google, amazon, and eBay


To generate revenue or product profit from website there are five major revenue models that organization that can refer to, that is sales revenue model, transaction fees revenue model, advertisement fees revenue model, subscription fees revenue model, and affiliate fees revenue model.

The main source of Google’s revenue is from advertising. For the year 2006, the company reported US$10.492 billion in total advertising revenues and only US$112 million in licensing and other revenues. One of the revenue model for Google is Google AdWords. Google Adwords provide pay-per-click(PPC) advertising site for any people or businessman who want their text or banner to be advertised and easily seen by the local, national and international distribution. Google’s text advertisements are short, consisting of one title line and two content text lines. Whereas eBay is the world’s largest online auction site, is one of the best examples. For eBay the revenue model is online auction which is participants bid for products and services over the internet. Amazon.com started as online bookstore, but soon diversified to vary product lines. Amazon.com was success in online shopping.


EBAY
For eBay, bids can be place anytime. This convenience increases the number of bidders. Moreover, sellers and bidders can participate from anywhere that has internet access. Because of the potential for a low price, the broad scope of products and services available, the easy way of access, and the social benefits of the auction process, there are large number of bidders.


AMAZON
Whereas for Amazon.com, is allows user to submit reviews to the web page of each product. They also have to rate the product on a rating scale from one to five stars. Moreover, the users are allows to comment on reviews. Amazon.com provides an optional option for reviewers to indicate that the reviewer is one of the top reviewers. Amazon is pioneer affiliate partnership marketing. An Amazon partner website can display Amazon books directly on their website, and sends customers to the Amazon’s website when the visitor is ready to buy it. In turn, Amazon pays a commission for the sale to the site owner.



GOOGLE
Google AdWords is allow the advertiser to present advertisement to people at the instant the people looking for the information related to what the advertiser has to offer. In addition, for advertisers, with this you can easily reach people when they are actively looking for your product and services. PPC means that you only pay when people click on your advertisement and it is easy to control costs. Moreover, this enables advertisers easily to sign up and manage account online.

In conclusion, all three of the company have their own way of generating revenue. In my opinion, Google earn the MOST REVENUE model among eBay and Amazon.com because for me the best way to generate income for the company in website is through advertisement.

Example of an e-comerce failure and its causes


In this modern and digitized world, we witnessed the launch, rapid rise and sudden fall of a relatively new industry that is e-commerce. With the widespread use of the Internet, exciting business to consumer (B2C) e-tail opportunities emerged. However, have some of the business succeed and fail due to number of different factors. Such as pets.com, boo.com, streamline.com, garden.com, DrKoop.com and eToys.com as examples of the hundreds of dot com business that failed.

I am now going to write about an example of e-commerce failure and its causes. The example I am going to use is DrKoop.com.

DrKoop.com

DrKoop.com (Drkoop) was launced in July 1998 by Donald W. Hackett and John. Zaccaro. DrKoop is a healthcare IT firm in Bloomfield, Michigan and they were a leading global healthcare network providing measureable value to individuals worldwide. During 1998 their operating revenues just hit US$43,000 but that did not keep the company from going public in June 1999 with capitalization of US$1 billion. Subsequently, DrKoop business plan rested on advertising but there were not enough healthcare advertisers to support it.

DrKoop fail to achieve complete success and unable to face the challenges in market via Internet. The main factors that affect the business of DrKoop is bad marketing strategy, unpersuaded marketing strategy, and unable to understand the needs of customers which lead to bankrupt and failed to achieve success. In the end, DrKoop the medical information web site was sold to a Florida company for only US$186,000 which was once worth US$1billion.


WHY DID DrKoop.com FAIL?
· The management of the company has NOT realized the important to achieve the goals of the company. Unrealized goal of the health care industry.
· Trouble in cash for the trademark, website and others.
· Difficult to build trust and brand value with their name especially through via internet. Moreover, it is related to health which needs more approval and confidence by the government.
· The Company did NOT understand their customer, needs to identify demands, needs of customers as well as understand the market in health industry business.

In conclusion, the DrKoop.com needs to implementation of effective business strategies and a strategic management process for the betterment of the company desirable for achieving long lasting success of an e-commerce company.

Related link:
1. http://www.drkoop.com/
2. http://www.thestandard.com/