Classifying Internet business models

There are many business model classifications ranging from observed lists with no consistent classification criteria (e.g. Kotzberg 2001; Applegate 2001b; Eisenmann 2002; Laudon and Traver 2003; Rappa 2006), to a more systematic approach which classifies models using as few as two variables (Timmers 1998; Linder and Cantrell 2000) and as many as four variables (Weill and Vitale 2001; Afuah and Tucci 2003) (Lambert, 2006b).

Pateli & Giaglis (2003) stated that business models in the same category usually shared common characteristics, such as pricing or the customer relationship model. They found that category frameworks of business models are based on:

Lambert (2006b) believed that existing business model typologies could be consolidated to create a more comprehensive typology. However creating a ‘master’ typology would require considerable subjective judgment and it may lose its potential to simplify reality.

Lambert (2006a) finds that there is no taxonomy of business models largely because there is no widely agreed upon concept of a business model.  This view is echoed by Osterwalder & Pigneur (2005) and Weill et al. (2005) who find no accepted taxonomy of business models.

Hawkins (2002) goes further to say “Attempts to create taxonomies of business models mostly amount to no more than random, unrelated lists of business activities that just happen to occur on Internet platforms”.

Many of the models discussed are simply extensions of a traditional model such as e-shops, where as some of the models have been created because of the openness and connectivity of the Internet (see Table 2 below).  In addition early classifications are out of date or do not include newer models such as social networking or cloud services.

For my thesis I reviewed the following classifications and summarised them below.