Overview of the three different online business models

Before you can start an online business, you need to decide what sort of business you would like to have. There are three basic online business models. Each business model has its strengths and weaknesses. We’ll give you a brief summary of what the three Internet business models are and then go into more detail about each one.

1) Advertising based

The first online business model is the advertising based business model. Rather than selling goods to customers, advertising based business models attract visitors to their sites and then sell advertising to companies who wish to reach those visitors.

Think of the online business model as a virtual magazine. Companies advertise in publications to reach certain people with their marketing message. Advertising based web sites work on the same principle, only the ads are online instead of in print. The eBusiness Guide itself is a good example of an advertising based business model.

There are many different ways to generate ad revenue from your web site. We’ll get into those in a little more detail in just a bit.

2) Retail

The next business model is “Retail”. It basically involves selling goods online. The best know business using this model online is probably Amazon.com. They started out selling books and now sell many other items as well.

3) Forums

The final type of online business model is a forum. The best-known example of this is probably eBay. Rather than selling goods itself (as Amazon.com does), or selling advertising itself (as we do), eBay simply acts as a forum, or place, for people to interact - in this case that means buying and selling goods to each other.