Page 165 - Electronic Commerce

Chapter 3

Real Estate and Mortgage Loans
Other fee-for-transaction businesses use Web sites to solicit business, including real estate
brokers and mortgage loan brokers. Most real estate brokerage firms have a strong online
presence, including information about properties they have for sale or rent, along with
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contact information for individual brokers affiliated with their offices. Many individual real
estate brokers operate their own Web sites as well. The industry’s trade association, the
National Association of Realtors, sponsors a Web site, Realtor.com, that carries detailed
descriptions and photos of houses listed for sale by its member firms. Although very few
(if any) real estate transactions are completed online, these Web sites play an important
role in bringing buyers and sellers together.
Although the financial crisis of 2008 dramatically reduced the number of mortgage
brokers in business, a number of them continue to do business online. For example,
E-LOAN still provides information and takes mortgage loan applications online.
The complexity and size of real estate transactions have made it difficult for online
activities to displace completely the work done by individual real estate and mortgage
brokers. Thus, this is one line of business that has been highly resistant to disinter-
mediation caused by online technologies. The changes caused by online elements in the
real estate and mortgage businesses have been minor.

Fee-for-Service Revenue Models
Companies are offering an increasing variety of services on the Web for which they charge
a fee. These are neither broker services nor services for which the charge is based on the
number or size of transactions processed. The fee is based on the value of the service
provided. These fee-for-service revenue models range from games and entertainment to
financial advice and the professional services of accountants, lawyers, and physicians.

Online Games
Computer and video games are a $66 billion worldwide industry. Although many sites that
offer games relied on advertising revenue in the past (and some, such as GSN.com, still do), a
growing number, including MSN Games and Sony Online Entertainment, include premium
games in their offerings. Site visitors must pay to play these premium games, either by buying
and downloading software to install on their computers, or by paying a subscription fee to
enter the premium games area on the site. Almost all game sites include some elements of
advertising in their revenue models, but an increasing number of them rely on a “hook and
pay” strategy. In this approach, a new game player is drawn in (hooked) by free play on a
game that has a limited number of levels. The game then offers access to higher levels of game
play, hints, or tools for playing the game better for a small fee.
One of the fastest growing segments of the online games business is in the
development and sale of games designed to be played on mobile devices such as
smartphones and tablets. You will learn more about these revenue models in Chapter 6,
which includes detailed information about mobile commerce.

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