This report was established to investigate the concept of the business model concerning internet startups as well as its relationship with other important components especially the business strategy. The study first looks at the relationship from a theoretical perspective to identify the various elements of internet startups that are important to the concept of business models. The study further collects information and data on the trends of success and failures of these ventures and the factors behind the trends. In discussing the findings, the study balances the aspects of business strategy with the choices made on business models. The study is not complete without the analysis of these findings such that the business model is evaluated according to issues about its application in the online environment. Finally, the lessons learned from the success and failures of internet startups are highlighted in form of recommendations to entrepreneurs deciding to enter the online market. ​Introduction ​Background The concept of the Business Model appeared with internet startups in the early 19 th century. This philosophy described the effort of entrepreneurs to model their ventures to make them more easily understandable by potential stakeholders. Like other concepts of internet trends, the use of the Business Model has widened, though its meaning is not universally accepted by its users. At present, however, a real research community has emerged sharing a universal interest in this concept. It appears to suggest that Business Model is not just a trend. The fact that researches on the concept are being published in popular scientific reviews such as Management Science and Strategic Management Journals is also an encouraging indicator. According to MacKenzie (2006), a model is not a mere camera but can be an engine. Economic models can silhouette the real economic world as alternative models for financial markets. Thus, the efforts of developing desirable business models affect the practical world implementation of businesses. The concept implies a methodical approach to designing and evaluating new business ventures, especially technology-based initiatives. For instance, a business model for a technology firm is the framework that arbitrates the process of value creation between the economic and technical domains, choosing and refining technologies and putting them into specific designs to be offered to the marketplace (Chesbrough & Rosenbloom, 2002). Despite the concept of the business model is potentially relevant to all firms, an investigation of the organization, strategy, and economic literature found limited papers on the business model. Most of them were done in the context of e-commerce or new approaches to business enabled by information technology. Studies on e-commerce models have focused mostly on two corresponding streams: the definition of elements of business models and classifications of business models (see figure 1). For instance, Timmers (1998) defined a business model as to include the architecture of the good, service, and data flow, a definition of the gains for the business player involved, and an account of the sources of revenue. Even though this definition does not restrict the idea of a business model to e-business, it applies the concept to that domain through two dimensions: the deg