The principal research objective of this paper is to examine how e-business models impact the success of real estate websites. A business model is a conceptual instrument that represents the approach that an organization takes to create, deliver, and capture value, such as through the allocation of resources. Specifically, this paper examines the similarities and differences among four e-business models and how this differentiation impacts the six companies covered that have real estate websites.

The four e-business models are web advertising, brokerage, value chain, and diversified. In the web-advertising model, the site provides free content, but advertisers are charged for banner ads. In the brokerage model, a real estate person generates a commission fee through the sale of a property. The virtual value-chain model is one in which products and services in the form of digital information may be a value-generating opportunity. A diversified model is one where real estate is only part of a combined product-service package. Although the real estate sites use multiple models, none of them use the diversified model.

The authors use a business model framework called Canvas Framework, which has nine dimensions (including key resources, customer relationships, and revenue streams), to examine the six web real estate sites along with their e-business models. The six sites are Realestate.yahoo.com, Redfin.com, Realtor.com, Trulia.com, Zillow.com, and Craigslist.com. The paper examines the factors that affect each site’s success. The authors feel that potential new entrants would benefit from understanding how different e-business model components affect company success.