Wednesday, March 17, 2010

Online Business Models

I think the future of online business models, or e-commerce is boundless because of mankind's need to make spend money.

From the videos, I think the "bubble" encompasses the balance of what will survive, occasionally join with other bubbles (economic ventures and mergers), and what will burst, or fail. The readings by Chris Anderson further develops this with the story of freebies, subsidies, recommendations, and overall having to create a demand for a product or service that wasn't there before, like the Gillette disposable razors. In some cases going back and selling more of a product that maybe be forgotten, like Joe Simpson's Touching the Void. Amazon has been found to do that in its suggestions.

I think sites like eBay and Craiglist (which has also become a verb in its own way) allows consumers be their own merchants and traders in this online auction forum. I think that in itself has a kinship with citizen journalism. Facebook even has an online "marketplace." It all plays off the old saying John Heileman alludes to: "one man's trash is another's treasure." Take the story of the red paper clip for example.

I think the challenges online business models face is the trust factor. We are always hearing of these scams people fall for and sometimes are made fun of or portrayed as a victim in the media. The second part of the "Bubble" videos gave me some comfort that my identity and information was thought of to be protected. I just ordered from Amazon the other day without any risk crossing my mind. I've dealt with Amazon on the phone before (and I actually had a pretty pleasant experience - no waiting on hold and a very understanding representative). I know people actually work there, and it's not just some company operated by robots. Being an unsecured business would be an easy way to lose revenue and profits.

I believe any business can survive if it 1) finds a niche that has never been served or created and 2) is marketable and is marketed well. Opportunities for online businesses are limitless. Just when we believe things can't get any better, another genius crosses the finish line as a billionaire in the venture capitalist game. I think the companies that involve the consumer in multiple ways, is interactive, will succeed.

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