InternetRetailer.com Article

October 31, 2005

Mary Wagner from InternetRetailer is just learning about the shopping comparison engines. She writes a quality survey piece…although I wish she would have mentioned ComparisonEngines.com – as opposed to just ‘Brian Smith, the blogger.’

-b


Holiday Shopping at Yahoo! Shopping

October 30, 2005

I’m hoping to really quickly get out a number of reports on what the comparison engines are doing to prepare for the holiday rush. Here’s the first; an interview with Rob Solomon & Chris Saito from Yahoo! Shopping…

When do holiday sales start coming in? When do you see or expect to see a pick up in traffic due to holiday sales?
Rob: “We start seeing an up-tick with the back to school season. Traffic goes nuts at the end of November. Our busiest day is the 1st or 2nd Monday in December.”

Do you have any specific expectations that you can share in terms of year over year growth in traffic? Or in terms of GMV/GMS growth?
Rob: “We’re seeing 20-30% year over year growth in traffic in general to date. Also, order item size is up year over year.”

Which categories/products do you expect to be breakouts? How about the iPod nano or Leapfrog’s FLY pentop computer?
Rob: “We’re seeing fantastic growth in apparel. Apparel is the breakaway category.
“The iPod nano is getting interest from a search perspective. Digital cameras are always in top.”

Chris: “We’ve seen woodstoves and pellet stoves in the top 50 – where they’ve never been before – because of the rise in heating costs due to Katrina. There are a lot of Halloween costume queries right now as well as the usual suspects like PlayStations and iPods. However, there isn’t a ‘must have’ product this year. There’s no phenomenon around a particular product.”

How do you expect most people to shop – browse or search?
Rob: “People are still doing both, but search is a much bigger driver; people end up on the site through search queries, search engine optimization (SEO), and search engine marketing (SEM). More people start in a search destination and then get into search and browse. Probably 65-70% of people are searching,”

Chris: “Certain categories lend themselves to browsing – like apparel. Browse is driven by category.”

Rob: “We view vertical search as one of the most important things that we’re doing. Browsing is a big part of the shopping experience and it always will be. Once you’re in the shoes category, you see people clicking on women’s shoes, then selecting a style, then size. That’s the type of browsing we’re seeing.”

What do you have planned for the holiday season? What were the top 3 things that you learned last year that might be driving changes on the site this year – people wanting coupons – people wanting fraud protection, people wanting more choices of products, etc.

Rob: “First, people want more and better information. We’ve made it easier to access information about products. There’s a much more detailed product page and all information is on one page. Second, value is a big driver of internet shopping, and we’re aggregating deals, coupons, and rebates. Third, overall usability; everyone has a different way to shop.”

“And obviously [through it all] we’re making search better – that’s part of our DNA and will always be important. We want to make search more comprehensive and relevant.

Chris: “Integration of our service with the rest of the Yahoo! network and being open with our search database; both within Yahoo! and outside of the Yahoo! network. Our APIs are an example; we launched the Yahoo! Shopping Web Service APIs last August and recently added access to user reviews. [Editor’s Note: Find out more about Yahoo Shopping Web Service APIs through my interview with Chris.]

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Thanks!

October 27, 2005

Thanks for making this a great week for ComparisonEngines.com. I really appreciate your feedback and the many quality comments on the site. I’m (way) behind on email (ughhh) and posts (lots in the hopper), and as I’m packing up my NYC apartment, I’m going to fall further behind. So I apologize in advance. Also, I noticed a lot of spelling and grammatical errors over the last week…I try to be careful, but I’m not a copy editor, so please bear with me.

My goal for the month was to write an average of 1 post per day. Not counting some ‘weak’ posts, I’m pretty much on target. Expect the same effort in November. If you have any ideas for stories or topics you’d like me to investigate, post a comment below or email me.

I’m heading to Silicon Valley next week, then LA the following week, and then back to Silicon Valley for about a month. I’m just now setting up my LA meetings and will move onto my Silicon Valley scheduling early next week. Please let me know if you’d like to meet.

Thanks again for reading!
-b


Kaboodle – An Experiment in Social Shopping

October 27, 2005

A lot of players are working on melding community and commerce – and yes, I still think that MySpace needs a commerce component. Kaboodle is getting some great buzz. Wanted to pass along the site in case you’re looking for interesting new shopping tools. I’m still playing around with the service, and I’ll hopefully talk with the company next week.

In the meantime, check out my Kaboodle Notebook Computer page. I’m now leaning towards the Dell.


Shopzilla’s Revenue Up. Earnings Down?

October 26, 2005

Just in case you thought I was picking on Shopping.com the other day, I also took a closer look at Shopzilla’s numbers through Scripps’ earnings call.

Q2 2005 revenue of $29.5 million and earnings of $7.6 million.
Q3 2005 revenue of $32.5 $35.2 million and earnings of $7.3 million.

I like the 19% increase in revenue, but why did earnings decrease 4% quarter to quarter? As Shopzilla is now part of a larger entity, I didn’t get the kind of answer I was looking for.

According to Farhad Mohit, Founder and Chief Product Officer, “at this stage in the game where gaining marketshare is most important, we are very very pleased with the topline revenue growth that we are experiencing and take that as a sign that we are helping more and more consumers and sending an increasing number of quality leads to our retail partners.”


Shopping Toolbars – Clippy the Paper Clip on Steroids

October 26, 2005

Clippy the Paper Clip
Remember Clippy the Paper Clip? Remember how much you hated Clippy?

On the surface, Shopping toolbars make sense. A consumer is on an ecommerce site looking at computers, he goes to a product page, and comparative pricing information pops up in front of the browser, as a sidebar, or from the top/bottom of the page. The consumer then sees that the product can be acquired at a better rate on another site and therefore clicks through to the other merchant and orders the product. In this scenario, the consumer is happy because he gets a better price. The company providing the shopping toolbar and the comparative pricing information is happy because the consumer clicked on what is most likely (although not always) a paid link which = $$$. The merchant who made the sale is happy as that merchant’s marketing dollars were well spent on that shopping toolbar.

Doesn’t that sound simple? Everyone except the original merchant is benefiting…and that original merchant probably has his own deal with the toolbar company and steals customers away from competitors all the time. So again, on the surface, shopping toolbars seem great.

However, I’m not going to be using NexTag’s toolbar, Dealio’s toolbar (Beta), ActiveShopper’s toolbar, or SquareTrade’s SideBar, and I wouldn’t recommend these toolbars to anyone.

For many reason, I’m sticking with my Yahoo!, Google, and SideStep toobars, plus DING!.

To understand my opinion on shopping toolbars, you need to know a little more about my history with downloadable applications. My name is Brian Smith, and I worked at WhenU for 9 months. Keep coming back, it works if you work it. [I have a feeling that the majority of readers will not get that joke and that's a good thing!]

While at WhenU, I worked on downloadable applications such as toolbars. In my 9 months at the company, I helped develop and market a football news toolbar (it’s not active anymore, but read through the about us/help section for details), coupon toolbar, anti-spyware toolbar, and a general searchbar. Were these toolbars successful? It depends on your definition of success. I’m not going to share specific numbers since I’m under a nice little WhenU NDA, but just ask yourself if you’re using a WhenU toolbar. Do you know anyone who is using a WhenU toolbar?
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Shopping.com and eBay, PayPal and Shopping.com

October 26, 2005

Updated: See below for more on Shopping.com and PayPal UK.

Since I’m not sure everyone who reads the blog checks out comments, I wanted to point out that an ad for Shopping.com is now showing up on eBay searches. Right now it’s pretty hidden (at the bottom of the page), and clicking through on the ad brings you to the Shopping.com homepage as opposed to being contextually relevant to an eBay search, but it’s a start. Thanks, Scot, for pointing this out!

This screenshot is from a search for halloween costumes:

Shopping.com on eBay

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eBay’s Earnings Call – Shopping.com Oddities

October 25, 2005

Meg Whitman, President and CEO of eBay, said a couple strange things in regards to Shopping.com in last week’s eBay earnings call.

First, she said “Shopping.com remains the number one shopping comparison site covering all kinds of products from shoes and iPods to hotels and mortgages.”

I have to question this statement, and I’m really surprised that all the analysts let it slide. What does ‘number one’ mean?

#1 in revenue? I don’t think so. Shopzilla now has had better revenue the last 2 quarters.
#1 in mortgages? No. I think NexTag probably kicks Shopping.com’s tail here.
#1 in hotels? Ahhh…are you communicating with the Shopping.com team? Iggy Fanlo said in an interview with me that “Our hotels category got a little bit clouded because of our talks with eBay. It’s something that we’re still exploring.” Meg, maybe you should sign up for my blog – email newletter and RSS feeds can be found to the right.
#1 in traffic? Hmmm. That’s a distinct possiblity. But if that’s what you mean, then be specific!

In fact, traffic is exactly what Meg meant. According to a representative from Shopping.com, “based on unique visitor numbers from ComScore, we’re number one.”

The problem I have here is that #1 in traffic does not necessarily translate to #1 in revenue or earnings. This should be a major concern, not something to be proud of. The real question here is why Shopping.com is not able to monetize its traffic as well as Shopzilla does. If I had to guess, I’d say that it has something to do with the sources of traffic for Shopping.com. While Shopping.com and Shopzilla both get a ton of traffic from the PPC engines, Shopping.com also gets some traffic from Adware providers where the quality of traffic is often questionable.

Second, Meg said:
“Shopping.com, which we acquired on August 30, had revenues of $29 million, $10 million of which is included in our Q3 results” AND
“Considering these factors, we now expect full-year 2005 net revenues to approximate $4.5 billion, including approximately $45 million from shopping.com, and up to $20 million from Skype”
WHICH TAKEN TOGETHER MEAN that eBay is expecting Shopping.com to have revenue of $35 million for Q4.

Just $35m for Q4? Seriously? What happened to the growth? In Q4 of 2004, Shopping.com had revenue of $31.7m which means that Shopping.com is only expecting year over year growth of 10%. This is abysmal considering that most online retailers expect 15-20% sales growth and everyone talks about the incredible growth within the comparison shopping space. With eBay backing Shopping.com, I’d expect to see an acceleration of growth…like you see at Shopzilla.

Shopzilla has seen their revenues climb consistently the last 3 quarters, bucking the seasonal trends at Shopping.com.

Take a look at the chart to compare Shopzilla’s revenue growth to Shopping.com’s stagnation? seasonal drift? [insert clever phrase]?

Shopping.com Revenue and Shopzilla Revenue

Q4 2005 revenue numbers are obviously estimates. Since eBay gave guidance for Shopping.com of $35 million which equals 20% quarter to quarter growth, I applied the same growth rate to Shopzilla which would produce revenue of approximately $42 million.

So who do you think is #1?


Kayak – Interview with Steve Hafner

October 24, 2005

Yes, I’m still very interested in travel search, and you will see many articles on the subject over the next couple months. I went out to Norwalk, CT to sit down with Steve Hafner, co-founder and CEO of Kayak.com. Here’s what he had to say…

Very briefly, what is Kayak?
Kayak is a new breed of travel site which helps consumers find great deals in a more comprehensive fashion than online travel agents (OTAs).”

How do you get the information from the travel providers?
“We get Air information in 3 ways:
1. Spidering/Scraping – going in real time to a third party website
2. APIs, XML or another way like RSS feeds.
3. An air travel engine. We licensed software from ITA Software, the same technology that Orbitz uses. The software costs about $2m per year, but brings our search cost to $0.”

What are Kayak’s strengths?
“We put a premium on comprehensiveness, and we have commercial relationships with other websites who agree to participate. Ease of use through our design – AJAX is a critical differentiating point. We offer rich filters on left hand side that update [searches automatically]. Choice – we offer more results than found on other websites. We’re focused on UI and words per page. Objectivity – Kayak.com has no opinion on where the consumer buys and we offer direct access to the supplier to buy your tickets.”

Where can Kayak improve?
“Comprehensiveness – there are suppliers and agencies we still need. For hotels, there are 300,000 that you’d want to stay in. Kayak has more than 91,000 hotels and with our new Every Hotel on Earth program, we will surpass 100,000 by yearend.”

“Ease of use – tweaking the interface to make results more relevant and personalized. We are working on personalization functionality that will remember preferences for business and leisure trips such as airline preference, car class or star-rating. “

“The site is just a year old. We need to add cruises and vacations, and we’ll get there. In November, we are adding multi-city and seat class.”

“Speed – We aspire to have Google-like speed. For non-date specific air travel search – window shopping – it’s instantaneous. No travel site has ever had Google like speed when you’re talking about a specific search for air travel.”
Read the rest of this entry »


Cairo Hires Frank Han as President & CEO

October 21, 2005

I have to learn more about Cairo and ShopLocal; two companies which focus on sales and specials at local retailers. Both companies have contacted me, but I haven’t yet had time to investigate.

As reported by Internet Retailer, Frank Han has left HSN.com for Cairo. Read the article. Frank was a co-founder at eToys before becoming EVP and GM of HSN.com. Read the company press release.


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