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82 Part 1 Introduction

5 Transaction fee revenue. A company receives a fee for facilitating a transaction. Examples
include eBay and Paypal who charge a percentage of the transaction cost between buyer
and seller.
6 Subscription access to content or services. A range of documents can be accessed from a
publisher for a period of a month or typically a year. These are often referred to as
premium services on web sites. For example, I subscribe to the FT (www.ft.com) for access
to the digital technology section for around €80 per year.
7 Pay-per-view access to documents. Here payment occurs for single access to a document,
video or music clip which can be downloaded. It may or may not be protected with a pass-
Digital rights word or digital rights management. I pay to access detailed best-practice guides on
management (DRM) Internet marketing from Marketing Sherpa (www.marketingsherpa.com).
The use of different 8 Subscriber data access for e-mail marketing. The data a site owner has about its customers
technologies to protect
the distribution of digital are also potentially valuable since it can send different forms of e-mail to its customers if
services or content such they have given their permission that they are happy to receive e-mail from either the
as software, music,
movies or other digital publisher or third parties. The site owner can charge for adverts placed in its newletter or can
data. deliver a separate message on behalf of the advertiser (sometimes known as ‘list rental’). A
related approach is to conduct market research with the site customers.
Now complete Activity 2.3 to review alternative revenue sources for an online intermediary.

Activity 2.3 Portal services and revenue models – the Yahoo! example

Purpose
To illustrate the range and depth of services available at leading portals and how this
contributes to revenue models.
visit the
www
Background
Yahoo! has arguably the widest range of services of any portal and it has been
successful in growing revenue and achieving profitability despite tough competition
from Google and MSN. You can see the success of the Yahoo! revenue models from
its financial results. At the time of writing the fourth edition, the future of Yahoo! as an
independent company was in doubt, but revenues, for full year 2007 were $6,969
million, an 8 per cent increase compared to $6,426 million for 2006.

Question
Visit the Yahoo! site relevant to your country (from www.yahoo.com) and identify the
range of services offered. Which are pure services, and which are basically providing
information from other sources? You can update on the level of revenue from these
services at the Yahoo! Investor Relations portal (http://yahoo.client.shareholder.com).

Tip
To answer this question you may find it useful to refer to Figure 2.13 where different
business and revenue models are summarized.
Answers to activities can be found at www.pearsoned.co.uk/chaffey

Calculating revenue for an online business
Site owners can develop models (Figure 2.13) of potential revenue depending on the mix of
revenue-generating techniques from the four main revenue options they use on the site
given in the options above.