Beat of Passion

An example of business-to-consumers (B2C) failure is eToys.com.

Edward Lenk, who was previously a vice president of Walt Disney Co.began eToys, following in the footsteps of the Internet super-success Amazon.com, Inc. Lenk intention was to use the Internet to sell products in a better way. The arrival of Christmas provided him with an idea for the perfect product: toys.

EToys beat the retail chains to the Web and thus secured important deals with some of the most popular Internet Service Providers (ISPs) in 1997. However, the industry's leading competitors that led by Toys "R" Us, soon rose to the challenge and began offering toys on-line. At first, without being tied to stores, as its competitors were, the company was able to carry a light load of inventory. Unfortunetely, overoptimisic predictions for its second Christmas season caused the company to abandon this advantage, leading to its ultimate downfall.

Potential causes for eToys.com failure:

• Lack of business experience

Most wrong decisions were made because the founder of eToys that previously worked for the Walt Disney Corporation, but had no experience with the retail toy industry, lacked a clear understanding of business fundamentals in the areas of finance, marketing, distribution and inventory and were not able to formulate a sound business strategy which was required before the launch of any products or services in the market. Without industry-specific information and start-up experience, mortality risk increases.

• Vulnerable financial structure (back-up funds)

The financial capital is a significant predictor of business failure. Although eToys start-ups raised funds through venture capital for initial operations, the company struggled to bring additional capital from an increasing number of reluctant investors. This affects the company ability to raise capital, as well as to finance its development by using internal resources. EToys which demonstrates a fast sales growth actually need more outside financing. The reason for this is that the company has to prepare for the increased sales by making considerable investments in equipment, manpower, raw materials and inventory, which are made before the proceeds from the sales are received. EToys failed to plan their cash needs for accelerated growth and run into financial difficulties at times that are supposed to be good from the company's point of view.

• Slow delivery

When e-commerce was new it was unproven territory for both customers and businesses alike. The nature of demand for products and services on the Net was still not known well, and to make matters worse, customers' expectations were sky high. Because of the resulting dynamic changes posed by e-commerce, eToys was caught off guard and was too slow to respond to the changes. For example, customers in many cases expected next-day delivery from the suppliers. Suppliers, on the other hand, did not have proper back-end distribution operations in place to deliver products in a reasonable time period. Late delivery combined with the shipping and handling costs, to a certain extent, were responsible for reduced interest in online purchases. For example, eToys was accused of falling short of one of its initial goals-speedy and reliable customer service. Thousands of customers complained that their orders were either late in arriving at their destination or contained the wrong merchandise, which resulted in paying for pick-ups, refunds and reordering.

• Inefficient promotion

The Internet has abundant free information that can be used to do effective marketing research. However, most online companies invested massively on promotion without the backing of sound market research and, thus, failed to use the most effective media to penetrate the target market for the company's products or services. EToys believed that advertisement was the key to success and acted accordingly by outrageously overspending on promotion and that, ultimately, was responsible for the demise of eToys.com.

• Mushroom growth

Another cause of failure is the competition environment. EToy.com was competing with companies such as Toys R’ Us that had not only an online presence, but also the perceived stable infrastructure of bricks and mortar. EToys.com strategy to offer more diverse products conflicted with the strong “toy store” branding they had created. The price wars and high customer acquisition costs also caused problems for eToys.

The main source of Google’s revenue is from advertising since Google is adopting advertising revenue model, where a company provides a forum for advertisements and receives fees from the companies that advertise their products. For the 2006 fiscal year, the company reported US$10.492billion in total advertising revenues and only US$112million in licensing and other revenues. Google advertising revenue model includes Google AdWords, Google AdSense and Google Answers.

Google AdWords is pay per click advertising program of Google designed to allow the advertisers to present advertisement to people who are looking for information related to what the advertiser has to offer. Revenue is generated on a per-click advertising (having maximum amount pay per click) or placement targeted advertisements (base on CPM or CPC) for both text and banner advertisements. This program includes local, national, and international distribution. Google generate most of the revenue from Google AdWords.

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Read more information: Google revenue models , Google advertising program


Amazon.com's revenue model:

Amazon.com is an e-commerce business which generates revenue primarily by selling books, videos, electronics, and kitchen equipment on domestic and international Web sites, such as Amazon Marketplace.

Amazon.com is a pioneer of using affiliate marketing and nowadays it having about 40% of its sales is from affiliates and third party sellers who list and sell goods on the web site. Affiliate revenue model is a method whereby a company receives commissions for referring customers to others web sites by using CPM (cost per thousand impressions), CPC (cost per click) and CPA (cost per acquisition/action). Amazon Kindle is a software and hardware platform which is developed by Amazon.com web site.

Ebay's revenue model:

EBay inc. is the world’s largest online auction site originally called Auction Web. EBay's mission is to provide a global trading platform where practically anyone can trade anything and it main source revenue is from transaction fees.EBay generates revenue from a number of fees. There are insertion fees, promotional fees, and final value fees.

• Insertion fees: Nonrefundable fee is charged when an item is listed on Ebay.
  
• Promotional fees: Fees that charged for additional listing options that help attract attention for an item, such as highlighted or bold listings.
  
• Final value fees: Commission that charged to the seller at the end of the auction.
  

EBay also generate revenue by charging a 15% commission on the complete sale. Beside that eBay also own PayPal, Skype, and Half.com.

Read more information: About eBay, About eBay Business, Reasons to still love eBay

Other related information: EBay vs Amazon.com, eBay vs the Google Juggernaut

Electronic commerce, more commonly known as e-commerce, is the pre-eminent buzzword of the online business revolution. It captures the excitement and focus of this fast emerging market. E-commerce systems replace all or key parts of paper-based workflow with faster, cheaper, more efficient, and more reliable communications between machines.

Tim Berners-Lee wrote the first web browser program and invented the World Wide Web (WWW) in 1990. WWW, the Internet's client-server, opened up a new age by combining the open Internet and the easy user interface.

In 1994, in Internet began to become popular worldwide. In this year Netscape arrived. Giving general consumer a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer.

In 1995, two of the biggest names in e-commerce are launched:

• Jeff Bezos launches Amazon.com and the first commercial-free 24 hour, internet-only radio stations, Radio HK and Net Radio start broadcasting.
  

• EBay is founded by computer programmer Pierre Omidyar as Auction Web and shopping website in which business and consumer buy and sell a broad variety goods and services worldwide.
  
  

In 1998, security protocols and DSL or Digital Subscriber Line were introduced, allowing continual connection to the Internet. In January 2000, AOL or American On-Line and Time Warner announced their merger, worth over $350 million. In February 2000, many e-commerce titans including yahoo.com, amazon.com, buy.com, and e-bay.com were attacked by computer hackers. The attacks raised concerns about the security of shopping online, which the industry responded to with (obvious) security upgrades. However, e-commerce was still there to stay.

Air Asia was the first budget airline company which practiced business-to-consumer (B2C) transaction in the airline industry in Asia. Furthermore, it has been the biggest stimulator of local e-commerce activities. Since Air Asia introduced online booking air ticket through its website in May 2002 and used computer network to conduct its business operationally, it had recorded about 40% of the total revenue which were made via Internet transactions. The following are some reasons why Air Asia's E-Commerce websites flourish in the recent years.

• Clear vision and goal
  Air Asia has a clear vison of being the largest low cost airline in Asia and serving 3 billion people who are currently underserved with poor connectivity and high fares. In the process of achieving the target, Air Asia has actually formed a dedication in building a successful online business.

• Multi-lingual
  Air Asia is the first airline in Asian to introduce a multi-lingual website with its new Bahasa Malaysia and Mandarin websites. It is much more convenience for all races, especially in a multi-racial country like Malaysia, to book online and browse through the whole content of the site including latest promotions, new updates and information about the airline such as latest quality statistics.
  

• Low Fare
  Air Asia offers very cheap ticket price for domestic as well as international flights. Therefore, Air Asia, the leading low fare airline in Asia has been expanding rapidly since 2001, to become an award winning and the largest low cost carrier in Asia.

• Air Asia Vista Gadget
  It allows customers to instantly manage and access live travel information and web-based services directly from their Windows Vista desktop computers. With the leading-edge technology, such as Windows Vista, it enhances the customer experience with Air Asia and the quality of customer service. Moreover, the collaboration between Air Asia and Microsoft allows Air Asia to expand their marketing channels by providing instant information on AirAsia’s promotions and updates to the region.
  

• Air Asia online system is conducted worldwide
  For sure, everyone can get their transaction done by using phone call, facsimile, mail and etc but Air Asia online system enables people to complete any transaction through internet. For instance, a customer from bangalore, India can book air ticket to depart from Low Cost Carrier Terminal (LCCT) to Perth, Australia.

• Air tickets can be booked 24-7
  As long as Air Asia has a reliable e-commerce host, the web runs 24 hours a day and 7 days a week to generate sales. For examples, Air Asia usually allows customers to book free air tickets during 12 mid night.

• Security and reliability
  Air Asia protects information and information system from unauthorized access, use, disclosure, disruption, modification, or destruction so that the customers’ data is safely kept and access to suitably controlled. All transactions will go through a secure transaction line by the company's financial institution and handled by the bank, thus, ensuring a highly secure line that will in still customers with trust.
  

• Don't wait
  The Internet is evolving at a rapid pace. Obtaining a Web presence is essential, those businesses that were making huge profit margins a few years ago, are beginning to see the market flatten out with increased competition. There's still the potential to make a lot of money through e-commerce, and Air Asia is now on the track.

AirAsia.com -----> Now everyone can fly

*Clapssss***

Welcome to "Beat of Passion". I'm waiyin, and I will be your blogger here. I’ve started this blog because I needed a new, more eclectic bloggy home, because as much as I’d like to have some sort of unifying theme to my posts, and possibly my life, I have come to acknowledge that that’s not happening anymore. So it’s time to embrace the fact that I no longer have to direct my thoughts in any particular direction, and my mind is free to wander to its heart’s content....**Tee-Hee**

Basic information: I’m from Seremban, 5'4" tall, crave for chocolates, like sincere people and adore Robert Pattinson (best known for his role as Edward Cullen in the movie adaptation of the Twilight Series). My hobbies are hanging out with friends, swimming, watching TvB series, shopping and photography **oopz*. If i had more money, traveling would definitely be a more frequently indulged hobby.

The top five websites which I visited the most are:

• http://www.google.com/
• http://www.facebook.com/
• http://www.youtube.com/
• http://www.gsc.com.my/
• http://www.dawnyang.com/ (Dawn Yang is the latest blogging craze. A regular Singaporean girl who made herself uber hot sexy through plastic surgery, she's been the focus of a firestorm on Asian blog.)
  

• http://www.hotmail.com/
• http://www.tvjiemu.com/
• http://www.lelong.com.my/
• http://www.cari.com.my/
• http://www.gsc.com.my/

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Hello everyone, I'm Audrey and also one of the person who take charge in managing this blog. I'm originally from Kuala Lumpur, Malaysia and I'm currently studying in University Tunku Abdul Rahman (UTAR) Sg. Long Campus. My main field of study is accountancy but i, hereby need to clarify that I'm just not as "stingy" as most people's first thought of accounting student.
I love to swim, play badminton, dancing and of course TRAVELING. As long as I can go travelling around the country / world, I will NEVER get tired easily, energetic young girl. >.<>

• http://uk.yahoo.com/
  I surf this web approximately once a day to check my mail or even to forward/share some useful information to all my lovely friends (as quoted : sharing is caring)..
• http://www.facebook.com/
  It's a superb website which gathers many people around the world. There are several applications which actually attracted me and there is no way for anyone who complain about the obstacles of contacting people from the other corner of the world.
• http://www.google.com/
  I do surf this website nearly few times a day. Google has now becoming a part of my brain, it provides me most information for what I want and during assignment period, google is even closer to me than anyone else.
• http://www.malaysiaairlines.com/my/en/home.aspx
  It's for me to check out what's the latest promotion. Moreover, I can also get the first hand information if there is 500,000 free seats fly to anywhere.
• http://www.thestar.com.my/
  It's a very useful website. It provides me the latest information (politic, economy, society, entertainment, sports and etc).. Especially nowadays security issue has become the main concern of everyone and I gotto get myself up-to-date about what's going on in our surrounding area.

It has to come to an end for my brief introduction.