The document discusses business models and strategies for companies operating in the internet economy. It provides examples of how major internet companies like eBay, Google, Facebook, and Apple generate revenue. The key ways discussed are advertising, subscriptions, transaction fees, and selling virtual goods/premium content/data. For example, eBay earns money from fees on transactions conducted through its marketplace, and Google earns most of its revenue from advertising on its sites and networks.

1. MARATHA MANDIR’S
BABASAHEB GAWADE INSTITUTE OF MANAGEMENT
STUDIES
(ACADEMIC YEAR 2014-15)
SUBJECT
STRATEGIC MANAGEMENT
TOPIC
New Business Models & Strategies for Internet Economy
PRESENTED TO
Prof. Ishita Tanna
Roll No. Name
A-3 Dipika Bhagwat
A-16 Hitesh Kathekar
B-1 Abhishek Ayare
B-22 Pawan Punmaji

2. INTERNET BUSINESS MODELS
• Information Sales
• Service Sales
• Brokerage
• Advertising
• Merchant
• Manufacturer (Direct)
• Affiliate Community
• Subscription
• Utility

3. THE ECONOMIC POTENTIAL OF
THE INTERNET REVOLUTION
• Reducing the cost
• Manage supply chain more effectively
• Easy communication
• Increasing competition
• Making prices more transparent
• Broadening markets for buyers and sellers
• Increasing the effectiveness of marketing and pricing
• Increasing consumer choice, convenience and
satisfaction in a variety of ways.

4. CONTRIBUTION OF INTERNET
• India will overtake the U.S. to become country
with the second highest number of Internet
users after China.
Current By 2015
GDP $30 billion $100 Billion
Internet Users 120 million 330 million-370
million
Internet Jobs 6 million 22 million

5. EBAY
• Incorporated in California in 1996
• 1998 IPO in September 1998
• Provides online marketplace for the sale of goods
and services, online payment and communication
• Price: $55.20
• Market Cap: 42.40B
• Total Cash: 3.20B
• Total Debt: 0
• P/E: 39.22

6. PAYPAL & SKYPE
• Revenue: $5.6 billion (2012) ,Acquired @ $1.5 billion in 2002
• April 2000, more than 1,000,000 eBay auctions used the PayPal
service
• In 2008, PayPal's total value of transactions was $60 billion
• Skype: Acquired @ $2.5 billion in 2005
• 75 million members
• Serves 225 countries
• Microsoft agreed to acquire Skype for $8.5 billion in cash in 2011
• Skype is a market leader in VoIP offerings in all countries in which
it does business.
• Core of Communications business: Allow communication between
buyers and sellers over the Internet

7. HOW DOES EBAY EARNS
• Business Operates in
three segments:
• Communications
• Skype Credit
• Monthly subscription.
• Payments
• Marketplaces
• Insertion fee
• Penalties
• Upgrade fee
• Final value fee
Paypal Fee Table
under $3000 USD 2.9% + $0.30
$3000.01 to $10,000 2.5% + $0.30
$10,000.01 to $100,000 2.2% + $0.30
over $100,000 1.9% + $0.30

8. INDIAN EXAMPLE
How does OLX and
Quikr Make money
• AdSense
• Premium and
featured posting
How does Flipkart
make money
• Promoting Product
• Merchandising
• Manufacturer (Direct)

9. HOW FACEBOOK MAKES MONEY
• Total Revenue for 2013 Q1:$1.46 billion

10. HOW DOES FACEBOOK
MAKE MONEY IF IT'S FREE?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties

11. HOW DOES INSTAGRAM
MAKE MONEY?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Before selling to Facebook they were not
making money.

12. HOW DOES GOOGLE MAKE MONEY
• Google generated $9.7 billion of total gross
revenue

13. HOW DOES GOOGLE MAKE
MONEY FROM ANDROID?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Google takes a 30% transaction fee for
each app sold, plus profits from in-app
advertising.

14. HOW DOES GOOGLE MAKE
MONEY FROM DOCS?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Google Apps for Business gives subscribing businesses more
control and security of their documents and data stored
online. Users can rent additional storage (shared between
Picasa, Docs, and Gmail) from 25 GB (US $2.49 / month) to
16 TB (US $799.99 / month).

15. HOW DOES GOOGLE MAKE
MONEY FROM GMAIL?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Gmail is supported with ads from adwords

16. HOW DOES GOOGLE MAKE
MONEY FROM YOUTUBE?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Ads on site and throughout embedded videos.

17. HOW DOES GOOGLE MAKE
MONEY FROM CHROME?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Google Chrome makes money indirectly
through Google search advertising.
Google.com is the default search engine for
the Google Chrome browser.

18. HOW DOES APPLE MAKE
MONEY ON APPS?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties

19. HOW DOES ADOBE MAKE
MONEY FROM FLASH?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Adobe sells the flash development software
but then does not charge users for the
software to play flash on PCs.

20. HOW DOES FARMVILLE MAKE
MONEY FOR ZYNGA?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Depends on how you look at accounting. In-game
purchases of virtual goods and in-game
advertising are the main sources of revenue.

21. HOW DOES TWITTER
MAKE MONEY?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties

22. HOW DOES TUMBLR
MAKE MONEY?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Revenue from premium themes and
paid inclusion to their blog directory -
not profitable - investor backed.

23. HOW DOES MICROSOFT MAKE
MONEY FROM XBOX?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Xbox live charges users $50 annually for
subscriptions to their service in addition
to the virtual goods that are sold on the
service.

24. HOW DOES LINKEDIN MAKE
MONEY ?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
Selling Data - Companies and recruiters
are able to pay and gain access to
LinkedIn databases.

25. HOW DOES APPLE MAKE
MONEY FROM ITUNES?
Advertising
Subscribers
Lead Gen / Affiliate
Selling Data
Freemium
Royalties
30% of revenue from iTunes sales goes
to Apple.