There are seven online business models | Hacker News Reader

There are seven online business models

simplyseven.net

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... among the top 100 companies in the Nielsen Top 100 websites in January 2010.

No kidding. I don't see extortion on the list for instance.

Yelp Business Model

or the BBB

...among 21 companies selected from the top 100...

There are exactly 21 companies that run an online business. No more, no less.

There seems to be a bunch of problems with them making a definitive statement about internet business based on this research.

First, the Nielson list doesn't include data from two of the G8: Japan and Canada. It also doesn't include China, but we could guess (perhaps wrongly) that there's not serious money being made by internet companies there yet.

The list also only includes websites, which does not correlate to "internet businesses" (They freely admit this problem in relation to B2B, but what about something like Blizzard?).

The restriction to the stock market is necessary for the reason they give, but massively narrows their sample based on an awkward criteria (Facebook isn't listed and is making $100 million or something)

21 companies does not have much statistical significance against seven criteria. I think (I'm not in stats) you'd need more like 600, and then I'm pretty sure you don't start with a list and see if they fit (if you start with a larger potentially overlapping set of business models then you could run a series of algorithmic tests to see which subset provided the best fit).

Their list looks somewhat generic, although even at a pinch it looks incomplete. What about selling real goods on subscription? This model has been viable enough offline, and in a way that should translate to online (eg magazine subscription, regular home care product delivery) but it doesn't fit into any of their models.

For a more interesting (yet still incomplete) rundown of business models, check out The Art of Profitability by Adrian Slywotzky: http://sivers.org/book/ArtOfProfitability

I'm looking for a new book. Has anybody read this and/or could recommend it? I hear it mentioned on HN from time to time. Any good? More to the point, has anybody read the book and created something of value from it?

It's a very good read. I liked its style, it's written as a master/tutor discussion a la Socrates. It's also a fairly quick read. Recommended!

After reading it you will be thinking: if a business model can't be explained with four strokes of a pen it's too complex. :)

I would recommend reading the book recommendations in each chapter. It takes a while but you'll read a lot of good stuff

I read it, I liked it. It has many good ideas one can apply. But it's not the definitive business strategy manual. Looks like an introductory guide for more advanced readings; I'm still not sure what such more advanced works would be, probably Porter.

It's a really short and succint book. I would recommend reading it.

I've personally read it, bought it, and loved it.

I don't know whether I've directly "created something of value from it," but it's certainly expanded my toolbox of ways to make money.

I feel like blogging and trolling are now synonymous.

Wait, so Apple gets excluded

> We would have loved to have seen this innovative company included in the financial analysis, but Apple still makes far more than 50% of its revenues off hardware and devices.

But then Dell is included...

> Dell is known for being the classic direct sales company – without a bricks-based retail presence

Apple's brick and mortar stores are doing well, but not _that_ well, right?

'the typical 6,000-square-foot Apple store rang up sales of about $4,700 per square foot in 2008, which was "undoubtedly the highest among retail chains in the country"'

Source: http://www.businessinsider.com/2009/1/apple-stores-now-just-...

Impressive.

Frankly, I'm still not sure that Dell or Apple would be a good choice to include here anyway; of course a place that sells $1000 - $2000 objects is going to have incredibly high revenues, and as you can see on the graph, it kind of skews it a bit...

I would hardly say there are only seven.

http://techcrunch.com/2011/01/07/10-business-models-that-roc...

This is partly related, but fascinating nonetheless: http://news.bbc.co.uk/1/hi/technology/8552410.stm

'mapping the growth of the internet'

8. Cybercrime

Yep, and one of them is to apparently make your site load, then disappear when JavaScript is disabled. Classy way to throw away business...

The eighth business model is of course offering a reward to anyone coming up with a viable business model that is not on the list.

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