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Value Creation and Value Capture Through Internet Business Models

  • Francesco D. Sandulli
  • Antonio Rodríguez-Duarte
  • Daría C. Sánchez-Fernández
Chapter
Part of the Progress in IS book series (PROIS)

Abstract

Firms compete in online markets through business models that have not yet been studied in sufficient detail. First, this chapter contributes to the literature on Internet business models through the study of the main mechanisms for creating and capturing value in electronic markets. The chapter describes how the main mechanisms of value creation on the Internet are aggregation, efficiency and customization. This chapter also discusses how companies can capture value in online markets by increasing the switching costs for consumers or leveraging network effects. Second, the chapter sets out four broad categories of business model based on specific mechanisms of value creation and value capture: Internet Malls, Content Providers, Merchants and Connectors. Finally, the chapter reflects on the dynamic nature of Internet business models and how most online companies tend to adopt hybrid business models which are continuously evolving.

Keywords

Electronic markets Network effects Switching costs Two-sided markets Electronic commerce Social network sites 

Notes

Acknowledgments

The authors acknowledge and are grateful for the cooperation and financial support provided by the Grant-in-Aid for Scientific Research of Ministry of Science and Innovation, Grant number: ECO2010-19787.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  • Francesco D. Sandulli
    • 1
  • Antonio Rodríguez-Duarte
    • 1
  • Daría C. Sánchez-Fernández
    • 2
  1. 1.Grupo de Investigacion de Produccion y Tecnologias de la Informacion y las Comunicaciones (GIPTIC). Departamento de Organización y Dirección de Empresas, School of Economics and ManagementComplutense UniversityMadridSpain
  2. 2.Complutense UniversityMadridSpain

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