The purpose of this report is to develop an insight about the growing use of the web and the number of business opportunities that resulted from it. The report describes some online business opportunities along with the pros and cons of stepping into such businesses. This report will later examine how Facebook has become a successful business enterprise and how it continues to develop in the competitive market of social networking.
There are 389 million online users worldwide and most of them have home internet connections. Figure-1 in the Appendix shows internet user ship by world regions. The figure shows that the major chunk of internet users is in Asia, Europe and North America. The user ship among women and senior citizens especially in the US is increasing. The youth in the US spends a major proportion of their income using the internet and spends many times more than adults do via the internet.
Businesses have realized that there are many marketing opportunities that can be realized through the internet. It is predicted that the online advertising expenditure will exceed $106 billion in 2011. Search and Display advertisements will be the major type of internet advertisements and company spending in such advertisements is expected to grow by 50% till 2011.
Online Business Opportunities Of Today
Below are some types of online businesses opportunities:
Affiliate marketing is a way of selling goods on the internet through affiliations or partnerships. The affiliate seller earns commissions for selling the other party’s products. The Amazon.com was the pioneer of the affiliate marketing concept(Holzner,2008).
Network Marketing is a direct marketing technique. The goods are generally promoted directly using word of mouth and references to consumers in return for compensations. Promoters can keep their own sales force and also earn part of the revenues the sales force brings to them.
It is not feasible to compete with bigger and established businesses online or otherwise as these businesses have the necessary resources and expertise to drive out smaller competitors. Through niche internet marketing one can identify the areas ignored by these huge companies and cater to them effectively and efficiently. Hence this requires limiting the focus and target customers. Selling a specialty product or service is an example of niche marketing(Goldman,2008).
One can sell advertisements on blogs and make money as viewership increases. Topics such as love and relationships generate more traffic.
Selling private label rights products
In such a business you have the authority to modify and sell a pre-existing product such as an online book. The seller even has the right to sell the product under his own brand name and keep all the profits earned.
This is a great way to promote goods and services using email. Sending personal emails to target customers regarding latest promotions, sending newsletters and carrying out promotions on third party sites are some examples of email marketing.
Talented writers can access sites such as elance.com to find customers .Bidding on subjects you are knowledgeable about is the best approach(Gillin,2008).
Online Business Advantages
Following are the advantages of starting a business online:
· The capital and overhead costs are low as there is no need to acquire new assets.
· You have control over your life. Hence you are your own boss.
· Internet connection is easy to acquire. The speed of the internet is a bonus and not a requirement.
Internet businesses are often private and do not require too much interaction with the outside world(Jag,2008).
· There is no need to commute to another location.
· There is no fixed timing. Work schedules are flexible. One can take a vacation or work part time.
· Internet allows access to millions of people worldwide efficiently and effectively.
· The internet provides many promotional opportunities often for free.
· One can start many businesses at once.
· The internet business does not require good communication and sales skills. However one must be hard working and determined(Gerakines,2008).
Online Business Disadvantages
The business owner must be computer literate order to work efficiently. This must be so regardless of the fact that he can hire experts to work for him.
Even though many good security mechanisms can be used to protect information online, there are still security issues especially with credit card transactions. Confidential information can be hacked and misused relatively easily.
Intellectual Property Rights
Law enforcing bodies find it hard to impose copyright restrictions on online businesses as effectively as they can on other businesses. This is because internet is without boundaries. A business plan can easily be copied and regardless of its origin(Facebook,n.d.).
The internet is accessible to everyone hence focusing communication to the right market is difficult and leads to wastage.
Interruptions from family, friends, pets, television etc can affect productivity( Veer,2008).
Internet businesses require the owners to be self disciplined and self motivated. It is tempting to delay tasks as there is no accountability to anyone but to oneself.
Jiggling family, friends and the online business can be even harder when one has a full time job or other online businesses.