ComparisonEngines

Rob Solomon is General Manager and Vice President of Yahoo! Shopping. Prior to joining Yahoo! Rob worked at FireDrop, a Kleiner Perkins backed start-up, Cendant Corporation, Electronic Arts, and GolfWeb.

I sat down with Rob at Yahoo’s offices in Sunnyvale and then followed up with a phone call a couple weeks later. Here’s what he had to say.

Background…
“Consumer behavior is changing and people are looking for products on Yahoo!, Google, and MSN. Yahoo! Shopping is a starting point for e-commerce based on search. The trick with Yahoo! Shopping is to create a search experience that is better than general search. We created a vertical experience that’s more valuable. Consumers want to find the right product at the right price with all necessary product information and then make a more informed buying decision. Yahoo! Shopping is becoming a starting point and adding value to the shopping experience.”

Not all stores have an online presence. That’s why PriceGrabber StoreFronts becomes an attractive option…
“Individual sellers and individual listings are important, too. At the end of the day, we’ll integrate them into Yahoo! Shopping. We’ll enable more people to sell online and access an audience. The key, though, is search. The margins of the pure play comparison engines are not that great. Those companies are not as efficient as Yahoo, MSN, and Google. Search engine optimization (SEO) and Pay-per-click (PPC) marketing are fueling the growth of pure play shopping comparison engines. Unless consumers are very savvy, they don’t know about comparison engines.”

Explain how Yahoo! Shopping fits in with Yahoo Small Business, Yahoo Product Submit, Yahoo! Mindset, and Yahoo!
“Yahoo! Shopping is a distribution channel for anyone selling online. Yahoo Small Business takes a hosting centric view, enabling people to get online, and then gives shopping carts to people enabling them to sell. Yahoo Product Submit is a way for anyone to list on Yahoo! Shopping as we’ve decided to be an open platform [users don’t have to host their website through Yahoo Small Business].

“Yahoo! Shopping is a structured program in that we take feeds, but we crawl the web to round out effectiveness. Crawling, however, is not as accurate. Using both methods enables Yahoo! Shopping to be as comprehensive as possible; we currently have 250,000 merchants and 60m products.”

“We are trying to create a shopping service that caters to how people want to shop. People search and browse. We provide a robust comparison shopping experience with as many potential options as possible.”

“People want information and they want it integrated contextually. Yahoo! Mindset is a way to do that. You can get prices or information about the products. We offer a search experience that allows you to find what you are looking for. On Yahoo! Shopping, we’ve only dabbled on the content side with services such as consumer reports. More content will be coming into play over time. People are going from site to site bookmarking, and it’s not easy. We want to make it easy for people to shop. We want to provide the perfect information for the buying mode they’re in. Yahoo! Shopping will pull in content such as ratings, reviews, blogs, etc., so users have as much information as possible.”

What Makes Yahoo! Shopping Different than the other Shopping Comparison Engines?
“Comprehensiveness in terms of the number of product offerings on Yahoo! Shopping and the number of merchants listed on Yahoo! Shopping. Over time there will be a decent gap that Yahoo and Google will create [with their shopping search engines] because of advanced crawling and search capabilities.”

“Looking forward, there will be more focus on personalization and community. Yahoo has 350mm users globally and 150m registered users. We’re making a big bet on community with services like Yahoo! 360. We’ll spend the next 2-4 yrs building out community features and it will factor into the shopping experience. Epinions was good. Ratings are pretty good. The next generation [shopping search] has to do with community features and more robust ratings and review. We will focus on bringing more content into the experience. In the past it’s been over-hyped and ended up scaring people, but there will be more and more personalization and customization within Yahoo Shopping!”

“In the end, it’s about search, content, community, and personalization.”

On Retention/Loyalty…
“Our ultimate philosophy is to build a great product and [make it] better and better. In the end, is it about the user experience or cash back services and points? Ultimately, we think it’s about the user experience. Look at Amazon. Amazon doesn’t have a true loyalty program. We’ve had Yahoo! points throughout the years, but it’s not a big focus.”

On Strengths & Opportunities…
“We provide comprehensiveness through search. Search technology is the key. Inktomi, Altavista, Fast, and Overture have found their way into Yahoo! Shopping. But Yahoo! Shopping is just a 1st generation vertical search platform. Shopping search will come to mean a lot more than just products, but when you’re in shopping mode [no matter what the product or service], you want access to experts, guides, and content. Shopping search 2.0 involves things like wikis and blogs.”

“There are 2 uniquely qualified companies in the space; Yahoo and Google. In order [for a pure play comparison engine] to get scale, they have to ride the search bandwagon. The pure plays have great functionality, but how do they get to 20m users?”

Shopping.com always talks about productization and structure as being key…
“There’s a strong browsing component of the shopping experience. Walmart, Amazon, and pure retailers have done better than aggregators. We’ve done the best on the shopping side. People like browsing because they like the discovery process.”

“We have an offshore group in Bangalore extracting attributes. But categorization goes beyond the attributes. It’s also about what kind of merchandising elements you have on the site, what kind of graphical media. This comes into play when searching for the hottest fashions or for women’s shoes. Ads aren’t evil when they’re the right ads and they are part of the merchandising experience. Also, on the content side, we offer access to top 100 lists, and top products from sources like PC World. All of these conspire to help you make your decision.”

More on Merchandising…
“In highly structured categories, merchandizing is done by top 10 lists. We also have semi-automated merchandising which is based on clicks and searches; we know what the top products are. We create seasonals (mother’s day, father’s day, valentine’s day) and for that specific holiday, we have our editors picking out things relevant to trends. We offer a gift recommender. Merchandising is also done through machine based learning. We’re trying to merchandise the site in an automated fashion as much as possible, but then also add human elements where possible.”

“In the future, we hope to do more merchandising in the soft categories; an area that we have to get better at. We’ll rely on our partners on the merchandising front as they are the experts.”

On Feeds vs. Crawling…
“We mix the crawled results in with the feed based and let the algorithm determine what is relevant. When relevance is equal, we will put feed based results on top of crawl based results. At this point, the crawling is just not as precise as a feed. No crawler out there is smart enough to determine all the attributes and things that we get through a feed; the title, description, price, etc. This information is more accurate through a feed because someone took the time to put the feed together. The biggest issue today is how to get a high quality crawl.”

“We don’t see a time in the near future where the crawler will be as good. As consumers demand more information and retailers want to share more information and more attributes and want to present data accurately over time, crawlers will have to take more and more information into account. This will not happen soon although 24-48 months could change the equation. Gap has retail stores, an internet site, cataloging, etc. and will want to present things accurately over time. They will want to tell a user that in a certain zip code, we have this item in stock. In multi-channel retailing, they are going to want to send as accurate and up to date information as possible. A feed allows them to do it.”

What does the future of comparison shopping look like?
“Vertical search is here to stay and the VCs are funding the growth. It will be interesting to see how it evolves. The big challenge is customer acquisition. How will they [pure plays] get people to use their site when you have Yahoo and Google out there? It’s such a competitive space and Yahoo realizes how important it is. Microsoft will do it also. The big guys will define it. We’re only in the first iteration of vertical search. The next question is how we marry products, content, and community.”

On the Recent M&A Activity…
“We’ve been predicting consolidation for a while although we thought one of the portals or search engines would acquire a comparison engine. Scripps has a great media business, but not an e-commerce business. Will they have the appetite to spend to fund the growth? Shopzilla was spending a lot of money to grow. Will that same type of growth be possible with a big media parent?”

“For eBay, it made perfect sense. The seller community was asking for more options. Shopping.com opens up the community, but eBay still controls it. The questions you have to ask are: Do they really need to own the asset? Are they comfortable with opening up? In the end, it’s good for Yahoo as we already work closely with eBay. eBay has an incredible destination and user base and we look forward to working with them more.”

This entry was posted on Monday, July 18th, 2005 at 8:30 pm and is filed under Comparison Engines, Yahoo! Shopping. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.