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Understanding the different types of online businesses
[There are] sites that sell stuff (called "transaction sites") and information/entertainment destinations (called "content" sites) in addition to business-to-business sales and paid subscription sites.
In the past couple of years, companies doing business on the Internet have begun to separate themselves by meeting the needs of different online market segments. For instance, there are content Web sites, like Yahoo!, that provide information to a very large and general online audience, and others, like Dr. Koop, that focus on a particular niche of the online population. As time progresses, and additional market needs are identified, you can expect to see more and more online businesses focusing on narrower segments of the online market. If you are new to the Internet, or haven't really decided how your online business is going to operate, then you should study what types of businesses are operating on the Internet today. As you begin this study, you will find it useful to categorize Web sites according to the functions they perform. One good classification comes from Jaclyn Easton, in StrikingItRich.com, that identifies Web sites as: content sites, paid subscription sites, or transaction sites. Once you can categorize different Web sites, then you will have a better understanding of their business models and how they make money. Another way to categorize Web sites, is to look at the business models of America Online (AOL), Yahoo!, eBay and Amazon.com. The financial press, like CBS MarketWatch.com, has begun referring to these online businesses as the "four horsemen" of the Internet because they are leading the charge of businesses getting online. Each of these companies has a different business model that meets the needs of their respective online audiences. In addition to Jaclyn Easton's classification, or the models of the four horsemen, there are many other ways that you can categorize online businesses. For instance, you can look at their growth rates, or the number of unique visitors that they attract every month, using studies from 100hot.com or Media Metrix. Alternatively, you might want to look at some of the rankings published by Inc. Technology magazine, that classify the best small business Web sites. If you already have an offline business, then you may want to look at what other offline businesses are now doing online. No matter what method you choose to categorize your Web site, you need to understand what type of online business you are planning to start, and how it is going to make money.
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