Business Models

Bit Vendor

a merchant that deals strictly in digital products and services and, in its purest form, conducts both sales and distribution over the web. [Apple iTunes Music Store]

Search Agent

a software agent or "robot" used to search-out the price and availability for a good or service specified by the buyer, or to locate hard to find information.

Metered Subscriptions

allows subscribers to purchase access to content in metered portions (e.g., numbers of pages viewed). [Slashdot]

Intromercials

animated full-screen ads placed at the entry of a site before a user reaches the intended content. [MarketWatch]

Person-to-Person Networking Services

are conduits for the distribution of user-submitted information, such as individuals searching for former schoolmates. [Classmates]

Trust Services

come in the form of membership associations that abide by an explicit code of conduct, and in which members pay a subscription fee. [Truste]

Auction Broker

conducts auctions for sellers (individuals or merchants). Broker charges the seller a listing fee and commission scaled with the value of the transaction. Auctions vary widely in terms of the offering and bidding rules. [eBay]

Buy/Sell Fulfillment

takes customer orders to buy or sell a product or service, including terms like price and delivery. [CarsDirect, Respond.com]

Demand Collection System

the patented "name-your-price" model pioneered by Priceline.com. Prospective buyer makes a final (binding) bid for a specified good or service, and the broker arranges fulfillment. [Priceline.com]

Purchase

the sale of a product in which the right of ownership is transferred to the buyer.

User Registration

content-based sites that are free to access but require users to register and provide demographic data. Registration allows inter-session tracking of user surfing habits and thereby generates data of potential value in targeted advertising campaigns. [NYTimes]

Incentive Marketing

customer loyalty program that provides incentives to customers such as redeemable points or coupons for making purchases from associated retailers. Data collected about users is sold for targeted advertising. [Coolsavings]

Metamediary

facilitates transactions between buyer and sellers by providing comprehensive information and ancillary services, without being involved in the actual exchange of goods or services between the parties. [Edmunds]

Advertising Networks

feed banner ads to a network of member sites, thereby enabling advertisers to deploy large marketing campaigns. Ad networks collect data about web users that can be used to analyze marketing effectiveness. [DoubleClick]

Contextual Advertising / Behavioral Marketing

freeware developers who bundle adware with their product. For example, a browser extension that automates authentication and form fill-ins, also delivers advertising links or pop-ups as the user surfs the web. Contextual advertisers can sell targeted advertising based on an individual user's surfing activity. [Claria]

Brand Integrated Content

in contrast to the sponsored-content approach (i.e., the advertising model), brand-integrated content is created by the manufacturer itself for the sole basis of product placement.

Lease

in exchange for a rental fee, the buyer receives the right to use the product under a "terms of use" agreement. The product is returned to the seller upon expiration or default of the lease agreement. One type of agreement may include a right of purchase upon expiration of the lease.

Ultramercials

interactive online ads that require the user to respond intermittently in order to wade through the message before reaching the intended content. [Salon in cooperation with Mercedes-Benz]

Distributor

is a catalog operation that connects a large number of product manufacturers with volume and retail buyers. Broker facilitates business transactions between franchised distributors and their trading partners.

Classifieds

list items for sale or wanted for purchase. Listing fees are common, but there also may be a membership fee. [Monster.com, Craigslist, Match.com]

Catalog Merchant

mail-order business with a web-based catalog. Combines mail, telephone and online ordering. [Lands' End]

Metered Usage

measures and bills users based on actual usage of a service.

Internet Services Providers

offer network connectivity and related services on a monthly subscription. [America Online]

Marketplace Exchange

offers a full range of services covering the transaction process, from market assessment to negotiation and fulfillment. Exchanges operate independently or are backed by an industry consortium. [Orbitz, ChemConnect]

Revenue Sharing

offers a percent-of-sale commission based on a user click-through in which the user subsequently purchases a product.

Audience Measurement Services

online audience market research agencies. [Nielsen/Netratings]

Open Content

openly accessible content developed collaboratively by a global community of contributors who work voluntarily. [Wikipedia]

Virtual Merchant

or e-tailer, is a retail merchant that operates solely over the web. [Amazon.com]

Virtual Marketplace

or virtual mall, a hosting service for online merchants that charges setup, monthly listing, and/or transaction fees. May also provide automated transaction and relationship marketing services. [zShops and Merchant Services at Amazon.com]

Content-Targeted Advertising

pioneered by Google, it extends the precision of search advertising to the rest of the web. Google identifies the meaning of a web page and then automatically delivers relevant ads when a user visits that page. [Google]

Content Services

provide text, audio, or video content to users who subscribe for a fee to gain access to the service. [Listen.com, Netflix]

Transaction Broker

provides a third-party payment mechanism for buyers and sellers to settle a transaction. [PayPal, Escrow.com]

Query-based Paid Placement

sells favorable link positioning (i.e., sponsored links) or advertising keyed to particular search terms in a user query, such as Overture's trademark "pay-for-performance" model. [Google, Overture (acquired by Yaho

Pay-per-click

site that pays affiliates for a user click-through.

Social Networking Services

sites that provide individuals with the ability to connect to other individuals along a defined common interest (professional, hobby, romance). Social networking services can provide opportunities for contextual advertising and subscriptions for premium services. [Flickr, Friendster, Orkut]

Open Source

software developed collaboratively by a global community of programmers who share code openly. Instead of licensing code for a fee, open source relies on revenue generated from related services like systems integration, product support, tutorials and user documentation. [Red Hat]

License

the sale of a product that involves only the transfer of usage rights to the buyer, in accordance with a "terms of use" agreement. Ownership rights remain with the manufacturer (e.g., with software licensing).

Banner Exchange

trades banner placement among a network of affiliated sites.

Click and Mortar

traditional brick-and-mortar retail establishment with web storefront. [Barnes & Noble]

Public Broadcasting

user-supported model used by not-for-profit radio and television broadcasting extended to the web. A community of users support the site through voluntary donations. [The Classical Station (WCPE.org)]

Portal

usually a search engine that may include varied content or services. A high volume of user traffic makes advertising profitable and permits further diversification of site services. A personalized portal allows customization of the interface and content to the user. A niche portal cultivates a well-defined user demographic. [Yahoo!]