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Chapter 2 E-commerce fundamentals 77
Number of searches through the Google Keyword Tool.
Figure 2.12
Source: Google https://adwords.google.com/select/KeywordTool
Business models for e-commerce
Online business A review of the different online business models made available through e-commerce is of
model relevance to existing companies, but in particular, start-up companies and online intermedi-
A summary of how a aries. Venkatram (2000) points out that existing businesses need to use the Internet to build
company will generate a
profit identifying its core on current business models, while at the same time experimenting with new business
product or service value models. New business models may be important to gain a competitive advantage over exist-
proposition, target
customers in different ing competitors, while at the same time heading off similar business models created by new
markets, position in the entrants. More commonly, they may simply offer a different revenue stream through adver-
competitive online tising or charging for services in a new way. For Internet start-ups the viability of a business
marketplace or value
chain and its projections model and in particular their sources of revenue will be crucial to funding from venture
for revenue and costs. capitalists. But what is a business model? Timmers (1999) defines a ‘business model’ as:
An architecture for product, service and information flows, including a description of the
various business actors and their roles; and a description of the potential benefits for the
various business actors; and a description of the sources of revenue.
The business model for e-commerce requires consideration of a company and its position in
which relate to structure of the micro-environment shown in Figure 2.1. Investors will
require eight key elements of the business model to be defined which will summarize the
organization’s e-business strategy:
