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Categorizing the different types of online businesses

In her book StrikingItRich.com (CommercenNet Press, 1999), Jaclyn Easton identifies Web sites by three major categories: content sites; paid subscription sites, and transaction (e-commerce) sites. She also goes on to say that most Web sites typically fall into at least two of these categories. Although you may not be familiar with all of the sites mentioned in her book, you are probably familiar with some popular Web sites that fall into these categories. For instance, Yahoo!  is a content site; The Wall Street Journal  is a paid subscription site; and Amazon.com is a transaction site.

Content sites

Content sites provide useful information for their visitors and are commonly separated into two categories: general and niche content sites. The general content sites are designed to appeal to as wide an online audience as possible, and provide a lot of different content covering many subjects. The niche content sites, on the other hand, are designed for a specific group, or segment, of the online audience and limit their content to a single subject area.

General content sites are much like the large broadcast television networks, including ABC, NBC and CBS that your are familiar with. They are similar because they provide a variety of different content (programming) that appeals to many different viewers. For instance, large content sites like Yahoo!  and Excite have the latest news stories, online interviews with rock bands, chat rooms, stock quotes, auctions, and other information that is of interest to the general online audience.

General Content Sites

Yahoo! 
America Online (AOL)
Excite
AskJeeves
Lycos

Niche content sites are more similar to some of the cable stations, like the History Channel or the Food Network, since they only provide useful information for a single group, or segment, of the online audience. For instance, there is Dr. Koop that has only medical content, iVillage that provides content for women, and CBS MarketWatch.com that has up to date financial news.

Niche content sites Type of content
EarthWeb Information technology
CareerBuilder Recruiting and hiring
Autobytel.com Automobile services
Alloy Interests for Generation Y
Dr. Koop Medical advice

The other main similarity that you can draw between content sites and television stations is that they are free to watch (understanding of course that you have to pay for cable service). In order to read and see any of the content on the sites discussed above, you don't need to pay or subscribe, you only need a Web browser and access to the Internet. Just like the television networks, these content sites make their money from advertising.

Paid subscription sites

Think of paid subscription sites as being analogous to magazines that you buy in the offline world. For the most part, paid subscription sites like TheStreet.com (www.thestreet.com) and The Wall Street Journal (www.wsj.com) provide narrowly focused content that you have to pay for. Like in the offline world, where you pay for an annual magazine subscription, in the online world you pay to access the content (or news and advice) on these Web sites.

Paid subscription sites also share other characteristics with their offline counterparts. For instance, many offline magazines will normally provide you with a couple of free issues in order to get you to subscribe. In the online world, some paid subscription sites will let you access a portion of their content for free, but require a payment if you want to see it all. In other instances, you get a free trial membership, through a temporary password, that allows you to access the entire Web site for a set period of time. Then you either have to pay, or your password expires and you can no longer access the site.

Transaction or e-commerce sites

Transaction sites also have real world counterparts, like mail order catalogs and retail outlets. Today, probably the most famous online transaction site is Amazon.com. Visitors to Amazon.com can browse through its Web pages of merchandise, like books, music, electronics, an more, an make a purchase online using their credit cards. This is similar to the way you might look through a mail order catalog of merchandise, and then call an 800 number to make your purchase by credit card. The main difference being that you actually speak to a customer service representative from the mail order catalog, while at Amazon.com you fill out your order form online.

One rapidly expanding trend is for traditional retail outlets to establish an extension of their offline business online. This trend is commonly called "clicks and mortar," since consumers can buy online with a "click" of a mouse, or offline at a store made out of "bricks and mortar." In fact it is not uncommon for many traditional retailers to employ all three channels of distribution, including: retail outlets, online sales, and mail order catalogs.

Breaking down the walls between the Web site categories

As Jaclyn Easton points out, most Web sites typically fall into at least two of these the three categories. For instance, while Yahoo! is typically considered a content site, it also has online stores and auctions that are characteristic of transaction sites. However, what separates Yahoo! from Amazon.com, is that Yahoo! does not have warehouses full of merchandise like Amazon.com, rather it acts as a middleman (or storefront) for its merchants.

Also, with the advent of affiliate programs, every content and paid transaction Web site has the ability to sell merchandise without having a warehouse full of inventory. In their simplest form, affiliate programs give Web site owners the ability to sell the products and services of other merchants for a commission, or flat fee, by placing links to these merchants on their own Web sites.

Using other categories for Web sites

While the previous discussion has used the Web site categories defined by Jaclyn Easton in StrikingItRich.com, there are many other ways to categorize Web sites. For instance, in its FrontPage Web site development software, Microsoft allows you to choose from templates that identify the following types of Web sites:

  • Corporate presence
  • Customer support
  • Discussion group
  • Project site

The corporate presence Web site is very popular amongst many businesses, and it usually represents their first attempt at getting their business online. For the most part, corporate presence sites display content that provides more information about a business, like the names of the owners, directions to its different locations, phone numbers for customer service, and descriptions of its products and services.

A couple of other terms that you have probably heard to describe a Web site, are search engine and portal. Yahoo!, already described above as a content site, began its early days as a directory that helped users search the Internet for any information that they were looking for. Now, in addition to including a "Search box" prominently on its home page, Yahoo! also provides numerous links and services for its user population, including: chat rooms, stock quotes, retailing locations, travel services, and much more. It has become a portal, or gateway, for Internet users

 

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