Management – Part 4

“Business model” is one of those terms of art that were central to the Internet boom; it glorified all manner of half-baked plans. All it really meant was how you planned to make money. The “business model” of Microsoft, for instance, was to sell software for 120 bucks a pop that cost fifty cents to manufacture. The “business model” for Healtheon was to add a few pennies to every bill or order or request that emanated from a doctor’s office. The “business model” for Netscape was a work in progress; no one ever really did figure out how to make money from Netscape; in its brief life Netscape had lost money. The “business model” of most Internet companies was to attract huge crowds of people to a Web site, and then sell others the chance to advertise products to the crowds. It was still not clear that the model made sense Michael Lewis