summary

1. Executive Summary
The success of web-stores or businesses depends on how much revenue they generate. The unique economic, technological and supply/demand features of web commerce have prompted people to develop different ways of charging consumers for goods and services rendered. This paper examines four major revenue generating models on the web (charging for goods/services, subscription, advertisement and content). In each model, the authors examine the characteristics of players involved, the expected value to each party and the delivery characteristics.

With an affluent, well-educated, active and busy online population, more retailers are trying to capitalize on their needs for convenience and information. Their efforts are, however, hampered by major technological and psychological barriers. The wholesalers try to use the net to improve overall efficiency and the model of the supply chain. Their ability to go further down the distribution channel, however, is inhibited by concerns of relationships with existing channels.

The online advertisement business is growing with the growth of Internet usage. The net has some technological advantages over the physical media. The ease of tracking real-time search activities and purchase behaviors makes it an attractive medium for advertisers. The technological features also allow media providers to charge advertisers in different ways, e.g., $/per 1000 impressions, click-through rate, and pay-per-sale rate. The overall net spending is, however, small.

The Internet provides a natural and efficient information dissemination channel. A great number of content creators traditionally offered information for free and made money through advertisement revenues. Increasingly, however, they are also collecting subscription revenues. A significant barrier to wider subscription base is probably the lack of portability of the net, the ergonomics of the display and search speed. The content field also tends to be crowed.

Many factors favor cyber-intermediaries over physical intermediaries. The advantages bolster the use of the web as a mechanism to merely broker transactions instead of selling tangible goods. The Internet is particularly helpful in assisting buyers to locate hard-to-find providers, to reduce risks associated with high value items and to preview information rich products.

The diverse and capricious nature of mankind makes it very difficult to condemn any particular modes of selling on the net. The uncertain nature of the various aspects of the net technology development also makes it difficult to determine which modes will popularize the web commerce. Far too much effort is being directed at defining e-commerce standards. Far too little effort is being spent on making the net easy to use, the display comfortable to stare at, the device portable to carry and the search technology pleasant to apply.