web auctions

Online auctions mirror traditional auctions and usually involve multiple bidder
participation. In both scenarios, bidders and sellers buy and sell tangible and
intangible products and services. Starting bids are low but increase at steady rates
to meet market demand and item popularity. The time span of an online auction
ranges from one to 10 days for items offered 24/7 worldwide.

Online auctions are a widely accepted business model for the following reasons:

• No fixed time constraint

• Flexible time limits
• No geographical limitations
• Offers highly intensive social interactions
• Includes a large number of sellers and bidders, which encourages a high-volume online
business

Online auctions include business to business (B2B), business to consumer (B2C),

and consumer to consumer (C2C) auctions. eBay is the best example of an auction
site that uses all three methodologies.

The online auction business model continues to evolve according to market

needs. Examples include eBay, Webstore, Online Auction and Overstock.

Virtual Communities

• A virtual community is a gathering place for people and

businesses that does not have a physical
existence
• They exist on the Internet in various forms:
• Usenet newsgroups
• Chat rooms
• Web sites
• They offer people a way to connect with each other and
discuss common issues and interests
• Virtual learning community
• One form of a virtual community
 • Virtual communities can help companies, their customers,
and their suppliers plan, collaborate,
and transact business
• Google Answers
• Gives people a place to ask questions that are
answered by an expert for a fee

Revenue Models for Web Portals and Virtual Communities

• Web portals are so named because the goal is to be every

Web surfer’s doorway to the Web
• One rough measure of stickiness is how long each user
spends at the site
• Nielsen//Net Ratings determine site popularity by
measuring the number of unique visitors
• Web portals
• High visitor counts can yield high advertising rates
• Companies that run Web portals add sticky
features such as chat rooms, e-mail, and
calendar functions

Mixed Revenue Portals and Virtual Communities

• Time Warner’s AOL unit

• One of the most successful Web portals
• Charges a fee to users and has always run
advertising on its site
• Yahoo!
• Now charges for the Internet phone service
originally offered at no cost