How Do Internet Companies Like YouTube, eBay, Airbnb and Wikipedia Make Money

How Do Internet Companies Like YouTube, eBay, Airbnb and Wikipedia Make MoneyIn this article we will talk about business models of the largest Internet companies: YouTube, eBay, Airbnb and Wikipedia. Each story is evidence that serious money can be earned where, at first glance, this seems completely impossible.

YouTube was created in 2005 by three programmers as a dating site – wishing to find a couple or just a friend needed to record video business. A year later, Google bought the service for $ 1.65 billion.

To date YouTube is the largest video sharing site and the second largest search engine. In total, daily visitors spend billions of hours watching videos.

The platform earns most of the money not on content, but on the attention of viewers – 30 million visitors a day. Here are ways to monetize:

1. Sponsorship advertising
When you search for a video, at the first places in the issuance of several videos with the tag “Advertisement” is a paid advertisement. The service receives money from advertisers for promoting their materials. The amount depends on the number of views received.

2. Built-in advertising
Embedded ads are ads that are played before the video starts or when it is viewed, as well as pop-up ads. The owner of the channel receives the share of earnings, on whose roller advertising is placed.

3. Ads on the home page
If a user does not sign in to their account, a banner with an image or video will be displayed on the YouTube home page. In some cases, its conversion can reach 80%.

4. YouTube Red (Premium)
This is a subscription service ($ 10 per month) that provides a person with enhanced access to YouTube:

  • The ability to use YouTube Music and YouTube Gaming;
  • View videos without ads;
  • Access to exclusive content YouTube Red;
  • Background music playback when running other applications and when the screen is off;
  • Free subscription to Google Play Music.

5. Paid content
YouTube is willing to collaborate with content creators who want to charge a fee for viewing their video. In this case, the user has to pay for the subscription or buy the right to access the content of the channel. Exact figures do not disclose, but according to rumors, the income between the content owner and the platform is distributed in a proportion of 55:45.

6. YouTube TV
This is an exclusive live broadcast of channels, available to subscribers on a subscription basis. Monthly subscription costs $ 35. There are also premium channels, which are charged separately. YouTube TV can be broadcast on any device.

7. Affiliate Program
Under some of the ads there may be advertising of thematic products. These products are affiliate advertising. If you buy the product, YouTube will receive a percentage.

The company was founded in 1995 as an auction for collectibles. Realizing the promise of the idea, the owners dramatically changed the main vector. Now the site is one of the leaders in the e-commerce market. On the platform, the product is sold as a fixed price (Buy It Now), and in the form of an auction.

Buy It Now – the most common way of trading sites on the Internet. But on eBay, the concept of Buy It Now has three different variations:

  • The client can participate in the auction or buy the liked position directly. The difference will be that the Buy It Now price is at least 30% higher than the auction’s starting price;
  • In auctions with reserve prices, the Buy It Now option is displayed only after the reserve price is reached;
  • The third option – Buy It Now without participation in the auction. This option is standard for all trading platforms. The goods are bought for a fixed price.

For customers, most functions are provided free of charge or included in the final price of the goods. Sellers also have to pay for some services:

1. Placement fee
Each seller is charged a certain fee for placing an ad on the platform. Also, the seller pays for the listing, the price varies from the product category (from 5 to 30 cents). Everyone has 50 free listings per month.

2. Sales commission
eBay also charges sellers a commission for each sale. Depending on the product category, it varies from 3.5% to 10%.

3. Enhanced Listing Tariffs
In addition to the standard listing service, eBay provides other options for promotion: selection, replication of the item on the platform, and so on. These functions are available for both classical and auction trading.

4. Income from subsidiaries
eBay receives significant revenues from the activities of its subsidiaries. GittiGidiyor is a Turkish shopping center, eBay Enterprise is a multinational e-commerce corporation specializing in the creation, development and management of online store sites, Corrigon is a visual search engine.

In Wikipedia now about 6 million articles, 33 million registered users, 32.5 million active editors. At the same time, about 600 new materials appear only in the English-speaking segment every day.

This is a very successful and profitable project, which in 2017 earned $ 91 million. At the same time, not a cent was earned on advertising, branches or paid services.

Wikipedia is an encyclopedia written together with people who use it. This is a special type of online manual designed to facilitate collaboration and data creation, where volunteers from around the world contribute and edit content using reliable sources.

Due to the fact that the main content is provided by volunteers for free, the organization focuses only on site maintenance, servers and administration. The owner of the resource is the Wikimedia Foundation, a non-profit organization that supports not only Wikipedia, but also other sites in the field of education and knowledge.

There are only three sources of income:

  • The company receives the bulk of the funds in the form of donations from millions of people and companies around the world;
  • Kind Services are natural donations in the form of supplies, equipment and services;
  • The organization sells branded goods under its own brand: T-shirts, mugs, laptops and much more.

All profits go to support Wikipedia, its affiliated projects, for awards and grants.

Airbnb is an online site for accommodation, search and short-term rental of private housing worldwide.

The founders created a simple website with a map offering bed and breakfast. As more and more people began to use it, the owners began to improve the platform.

Today Airbnb is present in 34 thousand cities in more than 190 countries. Since the inception of the service helped to find housing 35 million guests. In 2012, Airbnb outscored Hilton Hotels in the number of booked nights. In March 2017, the company was estimated at $ 30 billion, and the personal fortunes of its three founders were estimated at $ 1 billion from each.

For the traditional hotel business, millions have to be invested in the construction, development and maintenance of their facilities. The Airbnb resource is people, and therefore nothing to do the above is not necessary.

Airbnb allows travelers to communicate with owners and pay for living at home, saving money, instead of visiting expensive hotels. Personal profiles and rating / review systems help to make a measured decision about the owners and what they are offered. Owners, in turn, can also choose whom to rent their homes.

The company receives revenue in two ways:

1. Commission from homeowners
Airbnb charges 10% for homeowners from homeowners for each reservation. Also, the receiving party must pay 3% for processing the payments of the guests.

2. Transaction fee from travelers / guests
6-12% of the booking amount – travelers’ fees for each confirmed stay. This amount is not refundable. And depending on the country’s legislation, VAT is charged.

Also, the company earns a share of revenues from the sale of the Airbnbmag guidebook and the organization of business trips of managers of various companies with the provision of all necessary reporting.

Picture Credit: geralt

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