Firstly, let’s identify the revenue model of these three companies.
Google Inc is an American public corporation, earning revenue mainly from advertising related to its Internet search, web-based e-mail, and online mapping as well as selling advertising-free versions of the same technologies. For the 2006 fiscal year, the company reported US$10.492 billion in total advertising revenues and only US$112 million in licensing and other revenues. This indicates how significant the propotion of advertising revenue on Google's total revenue.Among the advertising products of Google, AdWords is the flagship advertising product and main source of revenue ($21 billion in 2008). AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. Another advertising product is AdSense. It allows website owners to enroll in the program to enable text, image, and more recently, video advertisements on their websites. These advertisements are administered by Google and generate revenue on either a per-click or per-impression basis.
Moreover, Google uses its Internet search technology to serve advertisements based on website content, the user's geographical location, and other factors. Those wanting to advertise with Google's targeted advertisement system may enroll through AdWords. AdSense has become a popular method of placing advertising on a website because the advertisements are less intrusive than most banners, and the content of the advertisements is often relevant to the website.
Amazon.com, Inc. is an American-based multinational electronic commerce company. It is America's largest online retailer, with nearly three times the internet sales revenue of runner up Staples, Inc. Amazon.com has incorporated a number of products and services into its shopping model, either through development or acquisition.According to the Internet audience measurement website Compete.com, Amazon.com attracts approximately 50 million U.S. consumers to its website on a monthly basis. For the revenue model of Amazon.com, that meant selling new items, or allowing thousands of users to sell them used.
Amazon.com is pioneer affiliate partnership marketing. An Amazon.com 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.com pays a commission for the sale to the site owner.
eBay is an online shopping and auction website in which
people and businesses buy and sell a broad variety of goods and services worldwide. For eBay, it meant bringing together auctioneers and auction buyers. Once you got everything started, this approach was extremely profitable. It was fast. It was managed by phone calls, emails, and database applications.eBay popularized the auction format listin. Like most auction companies, eBay does not actually sell goods that it owns itself. It merely facilitates the process of listing and displaying goods, bidding on items, and paying for them. It acts as a marketplace for individuals and businesses that use the site to auction off goods and services. Therefore, the revenue model of eBay is deemed to be based on commissions received through transaction fees.
The difference in the revenue models, broadly: Advertising for Google, commissions for eBay and sales minus costs for Amazon.com means different competencies, capabilities, supply chains, distribution, business relationships, alliances and so specializing and focus will definitely help in ensuring efficiency in operations.
In comparison, Amazon.com and eBay both worked as virtual marketplaces. They outsourced as much inventory as possible (in eBay's case, that was all the inventory, but Amazon.com also kept as little stock on hand as it could). Then, through a variety of methods, each brought together buyers and sellers, taking a cut of every transaction. For Google, by 2002, it was the search engine, and its ad sales were picking up. By looking at the revenue generated and the growth rate of the company, Google deemed to have the most profitable and sustainable revenue model among the three companies.
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