History/Business Models

Discussing historical events in a business context is often times a straightforward proposition. For example, most of us will agree that Wal-Mart has developed a pretty successful business model, given that the firm started out small and over the course of a couple decades went on to become the powerful retailing giant we know today. Sam Walton and his upper management team essentially reinvented the retailing model by adopting innovative logistics methods, pricing strategies, and customer service standards. Operational matter aside, one need simply look to the profit statement and stock valuation to gain an appreciation for Wal-Mart's business model.

Unfortunately, assessing the track records of dot.coms and the deluge of Internet-related business models is not as clear-cut. For one thing, the history of Internet companies stretches back only so far. And, as any historian will tell you, chronicling events that are still unfolding and interpreting the outcome correctly is always difficult (especially if the dice are still in the air). Thus, evaluating Internet business model (i.e., methods for conducting business that allow a firm to sustain operations by generating revenue streams that exceed operational costs), is a tricky matter.

The readings associated with this topic are meant to provide a brief overview of the Internet itself, as well as a general understanding of the kinds of business models that have been developed by many Internet companies. As you read through the articles and papers, keep in mind that while some firms fall squarely into a particular model category, many dot.coms have utilized adoptive strategies and have synthesized specific functionalities from two or more other business models, thus becoming hybrids.