With the exuberant amount of internet start-ups popping up everyday, one of the top questions each founder gets asked is "what is your business model?". Business models are many amongst start-ups, you have the freemium model being used by companies like dropbox or subscription type services like spotify. No matter the type of business model across the web, they all spawn from one of or are a combination of one or more of 9 main business models of internet companies.
They are as follows.
1. Brokerage Model- Brokers are market makers; they bring buyers and sellers together and facilitate transactions. Eg. Amazon, Ebay
2. Advertising- The web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case the website, provides content and services (like email, IM, Blog) mixed with advertising messages in the form of banner ads. Eg. Forbes, NYTimes, Yahoo!
3. Infomediary- Independently collected data about producers and their products are useful to consumers when considering a purchase. Some forms act as infomediaries assisting buyers and/or sellers understand a given market. Eg. Double Click, Yelp
4. Merchant- Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction. Eg. Amazon, iTunes Store
5. Affiliate- In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, the affiliate model, provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives to affiliate partner sites. Eg. Amazon, Groupon
6. Community- The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services.
7. Subscription- Users are charged a periodic-daily, monthly or annual fee to subscribe to a service. Eg. NetFlix
8. Utility- The utility or "on-demand" model is based on metering usage, or a "pay-as-you go" approach. Eg. Slashdot
9. Direct- The manufacturer or "direct model", it is predicated on the power of the web to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel. The manufacturer model can be based on efficiency, improved customer service, and a better understanding of customer preferences. Eg. Dell
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