Internet Business Develops New Business Models
Online Businesses Expand the Potential of Traditional Businesses
Jun 9, 2009
Starting an Internet business is easy but succeeding with the business is not all that easy. Some "models," such as the pre 2000 dot.com businesses, went bust. Others, like Google, eBay and Amazon, succeeded beyond expectations. Then there are the numerous obscure Internet small businesses that manage to make money.
Internet for Business
The original dot.com businesses did not have a clear business model. They put up a website and then sought to publicize it using the huge amounts of venture capital that was available. A large number of these businesses crashed during the stock market downturn of 2000 giving rise to the term "dot-com bust." On the other hand, the spectacular successes of businesses like Google, eBay and Amazon, validated the viability potential of Internet business.
We look at major web business models below:
- E-Commerce: Merchants and manufacturers sell their products on the Web. An on-line catalog of products allows customers to shop from the convenience of their homes. They add selected products to a virtual shopping cart and pay for the order using a credit card. Selling on the Web can reduce costs by eliminating expensive showrooms and an army of middlemen.
- E-Auctions:The traditional auction business, typically carried out in bazaars or auction halls, got transformed on the Internet. Now bidders can be anywhere in the world provided the merchant can deliver to all the places. Customer preferences and the prices they are willing to pay can be analyzed to provide high value insights.
- E-Brokerage: On-line brokers not only bring buyers and sellers together, as eBay and Amazon's Z Shops do, but also provide a range of facilitating services. For example, PayPal facilitates payment for purchases and fulfillment houses help convenient order fulfillment. There are also individual affiliates who promote the products of merchants in return for a commission.
- Content Sites: People surf the Web mainly for information and websites that provide informative content can sell advertising space on their Web pages. Content sites targeted at particular niches can attract advertisers interested in selling to those niches.
- Information Sellers: Certain kinds of information can attract paid customers. Investment tips, market research reports, audience measurement services and technical research articles are examples. While some of these are sold as services to specific customers, others are sold through subscription sites where paid members are allowed access to restricted-access information.
- Community Sites: People with similar interests gather at social networking sites where they can meet other similarly interested persons and carry on conversations. Just like informative content sites, community sites also offer monetization opportunities.
- Internet Services: Internet has given rise to new kinds of requirements, and businesses have not been slow to tap these. For example, there are web hosting service providers, domain name registrars, search engine optimization specialists and keyword research facilitators offering Web-specific services.
The variety of offers under each of the above broad models is amazingly large, and still growing. Web hosting, for example, can come in the form of a package suited for highly technical persons who prefer to do everything themselves, or as value-added packages that require no technical know-how and also include Internet business marketing help.
Internet Business Strategy
While Internet business opportunities are huge and growing, tapping these opportunities is not a simple task. Almost all models involve creating a loyal or large following of visitors. Not all visitors will buy what the site offers. Thousands of visitors must regularly come to the website to generate a respectable volume of business.
The strategy for attracting visitors involves many tactics. Successful tactics change from time to time, and new tactics are constantly appearing in the fast changing Web scenario. Creating great content, developing search engine friendly pages, ad campaigns designed to attract the right prospects, recruiting affiliates and networking through various networking forums are examples of tactics used.
Internet business has added a new dimension to the way business is done. Home based internet businesses, for example, have enabled small businesspersons (including stay-at-home moms) to reach global markets at affordable costs. Larger businesses have found new ways to expand their reach and serve customers better. To succeed, the businessperson has to adopt Internet business strategies that will work for the business and in the prevailing environment.
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