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Chapter 1 Introduction to e-business and e-commerce 27

Consumer-to- to-person, P2P) were relatively rare, but are now very common in the form of the social net-
business (C2B)
works. Hoffman and Novak (1996) suggested that C2C interactions are a key characteristic
Consumers approach the
business with an offer. of the Internet that is important for companies to take into account, but it is only in recent
years with the growth of always-on broadband connections and mobile access to the web
that these have become so popular. P2P transactions are also the main basis for some online
business models for e-businesses such as Betfair (see Mini Case Study 1.2) and eBay
(www.ebay.com, see Case Study 1.2) which are still run on a business basis, and some blogs
which are not run by companies, but by individuals
Finally, the diagram also includes government and public services organizations which
deliver online or e-government services. As well as the models shown in Figure 1.8, it has
also been suggested that employees should be considered as a separate type of consumer
through the use of intranets which are referred to as employee-to-employee or E2E.

Mini Case Study 1.2 Betfair profits with C2C online gambling service

Online gaming has become incredibly popular, with eSuperbrands (2005) reporting that there are over 2,400
online gaming and gambling sites worldwide, generating over £12 billion in profit.
Betfair has introduced a novel form of betting which replaces the typical role of the bookmaker such as
Ladbrokes or William Hill who provide fixed odds and take their own risk on the outcome. With Betfair, all
bets placed are with other Betfair customers rather than with Betfair which has no risks on the outcome. As
with all forms of gambling, there is a risk of corruption ‘throwing the bet’; to reduce this risk Betfair has a
transparent approach where evidence of corruption may be shared with the governing body of a sport.
Through providing an online service, there are additional aspects of its proposition:
You can either place bets conventionally or request your own odds.
You can choose the odds you want to play at.
You can bet whilst the game is in play.
Figure 1.9 shows the international offerings of Betfair. Note how well the proposition is explained.

Betfair’s revenue model
Betfair charges a commission (typically 5%) on each player’s net winnings on a market. If a player loses,
there is no commission. There is a discount on commission, the more bets you place, to encourage and
reward regular punters.

Betfair’s growth
This outline history of Betfair shows how it has extended its product range and partnerships to support its
growth:
1 2000 – The Sporting Exchange Ltd launches Betfair.com from Russell Square, London. At launch funds
were limited, so the company used ‘guerrilla marketing’ to promote it, such as a procession through the
City of London with coffins with banners ‘death of the bookmaker’ and fake demonstrations with ‘Betfair
– unfair’ banners.
2 2001 – Betfair matches £1 million in seven days for the first time.
3 2002 – Betfair announces a merger with competitor Flutter and sponsorship of Fulham Football Club.
4 2003 – Betfair launches sites in German, Danish, Greek, Italian, Swedish, Norwegian, Finnish and Chinese.
5 2004 – Betfair launches Betfair poker, which today has 60,000 registered players. Betfair signs joint venture
with Australia’s Publishing and Broadcasting Limited.
6 2005 – Betfair sponsors the Channel 4 Ashes Cricket coverage and records the highest-ever single market
turnover, matching £36 million on the Fifth Ashes Test Match alone! Betfair signs exclusive deal with Yahoo!
UK and Ireland to launch a simplified betting exchange as well as a co-branded betting exchange.