Different types of B2C business model.

Portal

•  Portals such as Yahoo, MSN/Windows Live, and AOL offer users powerful Web search tools as well as an integrated package of content and services, such as news, e-mail, instant messaging, calendars, shopping, music downloads, video streaming, and more, all in one place.

• They are marketed as places where consumers will want to start their Web searching and hopefully stay a long time to read news, find entertainment, and meet other people (think of destination resorts). Portals do not sell anything directly—or so it seems— and in that sense, they can present themselves as unbiased.

•  Portals generate revenue primarily by charging advertisers for ad placement, collecting referral fees for steering customers to other sites, and charging for premium services. AOL, MSN, and Yahoo which in addition to being portals are also Internet Service Providers (ISPs) that provide access to the Internet

• Yahoo, AOL, MSN/Windows Live, and others like them are considered horizontal portals because they define their market space to include all Internet users.

• Vertical portals (sometimes called vortals) attempt to provide similar services as horizontal portals but are focused on a particular subject matter or market segment

E-Tailers

• Online retail stores, often called e-tailers, come in all sizes, from giant Amazon to tiny local stores that have Web sites. 

• E-tailers are similar to the typical bricks-and-mortar storefront, except that customers only have to connect to the Internet to check their inventory and place an order. 

• Some etailers, which are referred to as “bricks-and-clicks, ” are subsidiaries or divisions of existing physical stores and carry the same products

 CONTENT PROVIDER 

• Although there are many different ways the Internet can be useful, “information content, ” which can be defined broadly to include all forms of intellectual property, is one of the largest types of Internet usage. Intellectual property refers to all forms of human expression that can be put into a tangible medium such as text, CDs. 

• Content providers distribute information content, such as digital video, music, photos, text, and artwork, over the Web. 

•  Content providers make money by charging a subscription fee. 

 TRANSACTION BROKER 

• Sites that process transactions for consumers normally handled in person, by phone, or by mail are transaction brokers. The largest industries using this model are financial services, travel services, and job placement services. 

• The online transaction broker’s primary value propositions are savings of money and time. 

• In addition, most transaction brokers provide timely information and opinions. Sites such as Monster. com offer job searchers a national marketplace for their talents and employers a national resource for that talent. Both employers and job seekers are attracted by the convenience and currency of information. Online stock brokers charge commissions that are considerably less than traditional brokers, with many offering substantial deals, such as cash and a certain number of free trades, to lure new customers 

MARKET CREATOR

•  Market creators build a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices. Before the Internet and the Web, market creators relied on physical places to establish a market. 

• For example, e. Bay’s auction business model is to create a digital electronic environment for buyers and sellers to meet, agree on a price, and transact. This is different from transaction brokers who actually carry out the transaction for their customers, acting as agents in larger markets. At e. Bay, the buyers, and sellers are their own agents. Each sale one. Bay nets the company a commission based on the percentage of the item’s sales price, in addition to a listing fee

 SERVICE PROVIDER 

• While e-tailers sell products online, service providers offer services online. There’s been an explosion in online services that are often unrecognized. Web 2. 0 applications such as photo sharing, video sharing, and user-generated content (in blogs and social networking sites) are all services provided to customers. 

• Google has led the way in developing online applications such as Google Maps, Google Docs and Spreadsheets, and Gmail. 

• Service providers use a variety of revenue models. Some charge a fee, or monthly subscriptions, while others generate revenue from other sources, such as through advertising and by collecting personal information that is useful in direct marketing. Some services are free but are not complete. 

• For instance, Google Apps’ basic edition is free, but a “Premier” model with virtual conference rooms and advanced tools costs $50 per employee a year.

COMMUNITY PROVIDER 

• sites that create a digital online environment where people with similar interests can transact (buy and sell goods); share interests, photos, and videos; communicate with like-minded people, and receive interest-related information

• The basic value proposition of community providers is to create a fast, convenient, one-stop site where users can focus on their most important concerns and interests, share the experience with friends, and learn more about their own interests. Community providers typically rely on a hybrid revenue model that includes subscription fees, sales revenues, transaction fees, affiliate fees, and advertising fees from other firms that are attracted by a tightly focused audience.

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MAJOR BUSINESS-TO-CONSUMER (B2C) BUSINESS MODELS 

Online businesses seek to reach individual consumers. This is the most well-known and familiar type of e-commerce E-tailer, Community provider (social network),  Content provider, Portal, Transaction broker,  Market creator,  Service provider

E-Tailer 

• These are online retail stores. They come in all sizes varying from giant Amazon to small tiny stores that have a web presence. 

• Similar to typical brick-and-mortar storefronts except that customers only have to connect to the Internet to check their inventory and place orders. 

• Some have a solely online presence and others have a complimentary web presence (brick-and-click) Extremely competitive sector since the barrier to entry is very low and tens of thousands of small e-tail shops have sprung up on the web. 

• The revenue model is the sale of goods Amazon.com, Drugstore.com, Dell.com, Walmart.com ISM 

 Community Provider 

• Sites where individuals with particular interests, hobbies, common experiences, or social networks can come together and “meet” online, where people with similar interests can transact (buy and sell goods) Share interests, photos, and videos Communicate with like-minded people and receive interest-related information 

• The social network sites Facebook, LinkedIn, Twitter, and Pinterest, and hundreds of other similar, niche sites all offer users community-building tools and services

•  The revenue model is hybrid including subscription fees, sales revenues, transaction fees, affiliate fees, and advertising fees from other firms that are attracted by the tightly focused audience 

Content Provider

•  Information and entertainment providers such as newspapers, sports sites, and other sources that offer customers up-to-date news and special interest how-to guidance and tips and or information sales. 

• Content providers distribute information content, such as digital video, music, photos, text, and artworks, over the Web. 

• Any e-commerce start-up that intends to make money by providing content is likely to face difficulties unless it has a unique information source that others cannot access. 

• Business model: advertising, subscription fees, affiliate referral fees 

Portal

•  Offers an integrated package of content, content-search, and social network services: news, e-mail, chat, music downloads, video streaming, calendars, etc. and they seek to be a user’s home base 

• Business model: advertising, subscription fees, transaction fee Yahoo, AOL, MSN, Facebook ISM 

Transaction Broker

•  Processors of online sales transactions, such as stockbrokers and travel agents, that increase customers’ productivity by helping to get things done faster and more cheaply. E*Trade (etrade.com), Hotels.com, Travelocity.com 

• Business model: transaction fees

 Market Creator 

• Web-based businesses that use Internet technology to create markets buyers and sellers can meet, display products, search for products and establish prices. 

• In Priceline.com consumers are allowed to set the price they are willing to pay for various travel accommodations and other products (sometimes called reverse auction) eBay, the online auction site, is utilized by both businesses and consumers. 

• Its model is to create a digital electronic environment for buyers and sellers to meet, agree on a price, and transact. Business model: transaction fees eBay, Amazon, Priceline 

Service Provider

•  Companies that make money by selling users a service, rather than a product Web 2.0 ( the second stage of development of the Internet, characterized especially by the change from static web pages to dynamic or user-generated content and the growth of social media ) applications such as photo sharing video sharing, etc. are all services provided to customers. 

• Google delivers online application services such as Google Docs and Gmail visanow.com (immigration service), rocketlawyer.com (online legal service)

•  Business model: sale of service 

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Portal

Portals are gateways to the Web and are often defined as those sites which users set as their home page. Some definitions of a portal include search engines like Google and Bing even if few make these sites their home page. Portals such as Yahoo, Facebook, MSN, and AOL offer powerful Web search tools as well as an integrated package of content and services, such as news, e-mail, instant messaging, maps, calendars, shopping, music downloads, video streaming, and more, all in one place. Initially, portals were primarily “gateways” to the Internet. Today, however, the portal business model provides a destination site where users start their Web searching and linger to read news, find entertainment, meet other people, and be exposed to advertising. Portals generate revenue primarily by attracting very large audiences, charging advertisers for ad placement, collecting referral fees for steering customers to other sites, and charging for premium services. In 2012, portals (not including Google or Bing) generated an estimated $8.5 billion in revenues. Although there are hundreds of portal/search engine sites, the top four portals (Yahoo, Facebook, MSN, and AOL) gather more than 95 percent of the Internet portal traffic because of their superior brand recognition

E-tailer

Online retail stores, often called e-tailers, come in all sizes, from giant Amazon with 2011 revenues of more than $48 billion, to tiny local stores that have Web sites. An e-tailer is similar to the typical bricks-and-mortar storefront, except that customers only need to connect to the Internet to check their inventory and place an order. Altogether, online retail will generate about $224 billion in revenues for 2012. The value proposition of e-tailers is to provide convenient, low-cost shopping 24/7, offering large selections and consumer choice. Some e-tailers, such as Walmart.com or Staples.com, referred to as “bricks and- clicks,” are subsidiaries or divisions of existing physical stores and carry the same products. Others, however, operate only in the virtual world, without any ties to physical locations. Amazon, BlueNile.com, and Drugstore.com are examples of this type of e-tailer. Several other variations of e-tailers—such as online versions of direct mail catalogs, online malls, and manufacturer-direct online sales—also exist.

Content Provider

While e-commerce began as a retail product channel, it has increasingly turned into a global content channel. “Content” is defined broadly to include all forms of intellectual property. Intellectual property refers to all forms of human expression that can be put into a tangible medium such as text, CDs, or DVDs, or stored on any digital (or other) media, including the Web. Content providers distribute information content, such as digital video, music, photos, text, and artwork, over the Web. The value proposition of online content providers is that consumers can find a wide range of content online, conveniently, and purchase this content inexpensively, to be played, or viewed, on multiple computer devices or smartphones.

Providers do not have to be the creators of the content (although sometimes they are, like Disney.com), and are more likely to be Internet-based distributors of content produced and created by others. For example, Apple sells music tracks at its iTunes Store, but it does not create or commission new music. The phenomenal popularity of the iTunes Store, and Apple’s Internet-connected devices like the iPhone, iPod, and iPad, have enabled new forms of digital content delivery from podcasting to mobile streaming. Podcasting is a method of publishing audio or video broadcasts via the Internet, allowing subscribing users to download audio or video files onto their personal computers or portable music players. Streaming is a publishing method for music and video files that flows a continuous stream of content to a user’s device without being stored locally on the device. Estimates vary, but total download, streaming, and subscription media revenues for 2012 are estimated at $19 billion annually. They are the fastest-growing segment within e-commerce, growing at an estimated 20 percent annual rate.

Transaction Broker

Sites that process transactions for consumers normally handled in person, by phone, or by mail are transaction brokers. The largest industries using this model are financial services and travel services. The online transaction broker’s primary value propositions are savings of money and time, as well as providing an extraordinary inventory of financial products and travel packages, in a single location. Online stockbrokers and travel booking services charge fees that are considerably less than traditional versions of these services.

Market Creator

Market creators build a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices. The value proposition of online market creators is that they provide a platform where sellers can easily display their wares and where purchasers can buy directly from sellers. Online auction markets like eBay and Priceline are good examples of the market creator business model. Another example is Amazon’s Merchants platform (and similar programs at eBay) where merchants are allowed to set up stores on Amazon’s Web site and sell goods at fixed prices to consumers. This is reminiscent of open-air markets where the market creator operates a facility (a town square) where merchants and consumers meet. Online market creators will generate about $18 billion in revenues for 2012.

Service Provider

While e-tailers sell products online, service providers offer services online. There’s been an explosion in online services. Web 2.0 applications, photo sharing, and online sites for data backup and storage all use a service provider business model. Software is no longer a physical product with a CD in a box, but increasingly software as a service (SaaS) that you subscribe to online rather than purchase from a retailer, or an app that you download. Google has led the way in developing online software service applications such as Google Apps, Google Sites, Gmail, and online data storage services.

Community Provider

Community providers are sites that create a digital online environment where people with similar interests can transact (buy and sell goods); share interests, photos, videos; communicate with like-minded people; receive interest-related information, and even play out fantasies by adopting online personalities called avatars. The social networking sites Facebook, Google+, Tumblr, LinkedIn, and Twitter; online communities such as iVillage; and hundreds of other smaller, niche sites such as Doostang and Sportsvite all offer users community-building tools and services. Social networking sites have been the fastest-growing Web sites in recent years, often doubling their audience size in a year. However, they are struggling to achieve profitability.

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Description of the figure.(B2C Business Model)

Portal

E-tailer

Community provider (social network)

Content provider

Transaction broker

Market creator

Service provider

 Portal

• Search plus an integrated package of content and services

• Types: Horizontal Portal, Vertical Portal or Vortal and Search Portal

• Horizontal Portal

Horizontal portals are directories like yahoo.com!. They're called "horizontal" because their list of websites covers a broad range of topics (such as News, Search, Other Website links, Premium Services, and Online Storage, etc.

Examples: Yahoo.com, MSN.Com, Google.com, Aol.com, pakistan.gov.pk 

• Vertical Portal

Vertical portals on the other hand are narrow, covering only one topic or one type of Product or Services. Convert-Files.com 

Examples: Convert-Files.com, exportall.com, quicken.intuit.com

• Facts: - No of the user of portal Greater than vortal users

•  Vortal users pay more than portal users

• Revenue model: Advertising, referral fees, transaction fees, subscriptions

E-Tailer

• The online version of traditional retailer (Physical Retail Stores)

• Variations: Virtual merchant (Click-and-Click)

• Examples:- Shophive, tcs-connect, Amazon , BlueNile , DrugStore

• Bricks-and-Mortar (Only have Physical Store’s)

• Examples:- All offline Retailers(Have no Presence over the Internet/Web )

• Bricks-and-clicks (Online as well offline)

• Examples:- JC-Penney, Wal-Mart, Staples

• Catalog merchant | LLBean.com (also process orders via and Phone)

• Manufacturer-direct | Dell.com

• Shopping Mall | malloflahore.pk

• Low barriers to entry | Cost for entering into an E-Retail is low than startup a Physical Retail Store.

• Revenue model: Direct Sales, Advertisement

 Community Provider

• Provide an online environment (social network) where people with similar interests can transact, share content, and communicate

• Examples: Facebook, Linked In, Twitter, Pinterest, and About.com. Visitors can share tips and buy recommended books from amazon, giving about.com a commission on every purchase. Well.com provides a forum for technology and internet-related discussions Fool.com which provides financial advice, news, and opinions.

• Revenue models: Typically hybrid, combining advertising, subscriptions, sales, transaction fees, and so on

Content Provider

• Sell or provide digital content (News, music, video, text, artwork) on the Web

• Examples: consumerreports.org, wallstreatjournal.com, CNN.com, espn.com

OR

• Sell or provide Intellectual Property on the Web

• Intellectual Property: refers to all forms of human expression that can be put into a tangible medium such as text, cd’s or the web

• Revenue models: Subscription; pay per download (micropayment); advertising; affiliate referral

Transaction Broker

• Process online transactions for consumers

• Primary value proposition—saving time and money

• the site that processes transactions for consumers that are normally handled in person, by phone, or by mail.

• Examples: travelocity.com, xpedia.com, rozee.pk, ubl.com, bukharigroup.com.pk

• Revenue model: Transaction fees

• Industries using this model: Financial services, Travel services, Job placement services

Market Creator

• Create a digital environment (a C2C e-commerce website) where buyers and sellers can meet, display products, search for products and establish a price for products.

• Examples: Priceline, eBay

• Revenue model: Transaction fees, fees to merchants for access

Service Provider

• Use IT / IS Infrastructure of well-known companies . . .

• Web 2.0 applications such as photo sharing, video sharing and user-generated content(Blogs, WIKI’S, and Social networking sites) are all services provided to customers.

• SAAS – Software as a Service Providers (Examples)

• Google Developing online applications such as Google Maps, Google Drive, Sky Drive, Gmail, Salesforce.com, etc.

• Value proposition: Valuable, convenient, time-saving, low-cost alternatives to traditional service providers

• Revenue models: Sales of services, subscription fees, advertising, sales of marketing data