Darth Tater – Ringing in the Holidays at Yahoo! Shopping

November 30, 2005

Talked with Rob Solomon, General Manager and Vice President of Yahoo! Shopping, for a quick holiday shopping update…

On Traffic…
“On Thursday, we saw year over year traffic growth of 63% and on Friday we saw growth of 52%. We were expecting growth in the 20-30% range.”

On Hot Products…
“Xbox 360 is an incredibly popular search term, but no one has it. You can buy it at auction for 2-4x list price [Maybe Yahoo! Shopping should put a link up to Yahoo! Auctions on that search results page] iPod nanos, and the iPod itself. Digital cameras. Also, shoes are very popular, with Puma as a stand out brand, rising to the top 20.

On Popular Toys…
-Roboraptor – a robotic dinosaur, this year’s Robosapien
-Darth vader voice changing mask
-The Star Wars Mr. Potato Head Dolls – Darth Tater and Spud Trooper
-Leapfrog products
-‘Shout’ Dancing Elmo
-Bratz dolls.

On the Shoposphere…
“When we launched, there were a lot of great lists created across different themes. Now, a lot of holiday thematic lists are being created; top holiday movie lists, toy lists, wish lists, things people lust after, things people want. We had theorized that themes would be important – the holiday season, Valentine’s day, etc., and people seem to be tapping into [that idea]. We’re really pleased with how it’s taken off. It’s exceeding expectations and being viewed in bigger numbers than expected.”

“We also hoped it would tap into the long tail of products as we now have 100m products on Yahoo! Shopping, and if you look into the lists you will see a good assortment of products that you never would know existed. As people consume and syndicate their lists, it will help with retention and it will spread the word [about the offerings on Yahoo! Shopping]. The reason we created the Shoposphere was to take our notion of Yahoo! Shopping and extend it anywhere. This is a big part of our strategy.”

“Pick lists are definitely a twist on traditional reviews as reviews used to be a one to one thing. [The Shoposphere] is the next generation of how people are reviewing products. It’s turning into a blog meets review platform. We think this is one of the products that will kick off a very rapid phase of innovation from big players in Q1.”

More Yahoo! Shopping Stories:
Comparison Shopping – Important Holiday Season Happenings – November 26, 2005
The Shoposphere – A Closer Look at the New Yahoo! Shopping – November 15, 2005
Integration of Shopping Coupons – October 14, 2005
Interview with Chris Saito (Yahoo! Shopping) on the launch of Yahoo! Shopping Web Services – August 4, 2005
Interview with Rob Solomon, GM & VP Yahoo! Shopping – July 18, 2005


PriceGrabber Autos – For Serious Car Buyers Only

November 30, 2005

December 14, 2005 Update: Read my latest coverage of Experian’s acquisition of PriceGrabber.

Ok, I’m impressed with PriceGrabber Autos because it’s not just another lead gen system. As opposed to collecting an email address and sending it to 10 dealers, PriceGrabber qualifies the lead by forcing potential buyers to jump through a number of hoops. Because of this, the consumer gets motivated dealers bidding for business and the dealer gets a buyer, not just a lead.

While the simpler lead gen services might not always send the highest quality traffic to dealerships, they do get a referral fee from a ton of dealers. This means that these lead gen companies can afford to spend a lot of money on the PPC engines to acquire traffic. If PriceGrabber only gets a referral fee from a couple dealers and fewer leads are making it through the pipeline, theoretically, they will not be able to spend as much money to push the service. Eventually, because PriceGrabber’s referrals are much higher quality, they will get paid more per lead, but I think that means the system might bleed money for the forseeable future as dealers are not going to pay more for an unproven service.

I met with Darren Davis, Business Director for Autos, at PriceGrabber a couple weeks ago. Talking with Darren was a blast as he has some great stories from the early days of the internet boom, having worked at Autobytel (8th employee) from ’95 – ’98 and Goto.com from ’98 – ’03…

A little introduction…
“What [our Autos section] does well is get customers 3 or more quotes from dealers they prescribe – they tell us who to invite and who not to invite. These quotes are every bit as competitive as if you walked into a dealership because the dealers know that other dealers are providing quotes. Also, the dealers want to work with the sites that do more to pre-qualify the buyers.”

“PriceGrabber’s Auto section is the most customer focused, dealer friendly car site. We scrub our customers more than anyone else out there. We actually make it hard to get your request while others have tried to increase volume. We have no problem showing a big, ugly stop sign as a warning. Because of this, dealers know that when they get a PriceGrabber request, that person is going to buy, it’s just a question of whether that person is going to buy from you. There are a lot of garbage providers out there. We are the exact opposite. We’d rather send a dealer 1 request a month from someone who is going to buy a car vs. 10 requests from people who won’t buy.”

“[After customizing a car], the customer has to answer a couple simple questions. First, the customer has to specify exactly which dealer he wants to compete for his business. You can refine the choices by distance [and specify that you only want to see dealers within a 50 mile radius] or you may have already talked to a couple dealers [and want to skip them]. In this way, the customer has complete control. Next, we verify the customer’s contact phone number. The user gets an automated call with an authorized code. [Darren demonstrated this on the spot.] You also have to create a user name and password as your quotes appear through PriceGrabber.com.”

Read the rest of this entry »


PriceGrabber Suitors

November 30, 2005

December 14, 2005 Update: Read my latest coverage of Experian’s acquisition of PriceGrabber.

Ok, I’ve received way too many emails asking if I know anything about PriceGrabber being acquired. I can truthfully say that I know nothing and (obviously) PriceGrabber won’t comment on the rumors.

I find the timing of an acquisition odd as I believe that this holiday season will blow away expectations and that any agreement now could leave money on the table, but I bet there are a million reasons why an end of year sale makes sense.

The rumors started last week when Josh Stomel said “according to multiple sources… Pricegrabber.com will be acquired very soon.” (Read his full post) Jay Weintraub picked up on this the next day and yesterday he pointed users to David Lewis’ Shopping Comparison Scorecard post from June 6, 2005, where he talks about Experian as a likely suitor. Back to Josh Stomel, his most recent post asks the question of whether the “placement of the categories being moved around” [on PriceGrabber] gives a hint at the likely acquirer. I’d be embarrassed to say that I’ve memorized the layouts of all the comparison engines, but if Experian (owner of LowerMyBills) is indeed the likely acquirer, then he’s probably hinting at Mortgages getting great placement on the homepage…although Autos and Cell Phones & Accessories also fit in well with LowerMyBills.

Ok, that’s a recap. I’m not in the business of perpetuating rumors, but too many people seem to have already ‘confirmed’ this story.

Here’s a look at the potential suitors:
Experian – owner of MetaReward, Affiliate Fuel, and LowerMyBills.
MSN – while Microsoft is definitely in the business of building rather than buying, the company has been pushing MSN Shopping (they even had Cedric the Entertainer promoting the site in Times Square in his underwear) and they are the only one of their peer group (Google & Yahoo!) without their own shopping comparison engine as they use PriceGrabber and Shopping.com listings.
Amazon – quick way to pick up thousands of merchants (they’ve been more aggressive recently in contacting prospective merchants).
FIM – I’ve said it before…these guys have community and content, but no commerce.
IAC – while Diller has said he thinks comparison engines make no sense, and Red Carpet is about to launch, you never know.
Oh, and Niki Scevak, former Jupiter Analyst, mentions Marchex – in his post.

Ok, so how much would PriceGrabber be worth? The company should fetch a premium for a number of reasons: 1) they are one of only two major independent comparison shopping sites left (NexTag being the other), 2) revenue on the site is from shopping comparison results (which I view as more valuable than Google AdSense ads), 3) quality sources of traffic (organic & distribution partnerships) – Pricegrabber doesn’t seem to rely as much on PPC advertising as other comparison engines, and 4) we’re going into what should be a breakout season for comparison engines.

At the same time, I don’t think PriceGrabber does anywhere near the revenue of Shopping.com and Shopzilla. I’d guesstimate a price between $300m – $400m.

Update – Looks like Experian is buying PriceGrabber. Read my follow up post.

More PriceGrabber posts:
PriceGrabber Autos – For Serious Car Buyers Only – November 30, 2005
PriceGrabber – Interview with Kamran Pourzanjani – November 29, 2005


PriceGrabber – Interview with Kamran Pourzanjani

November 29, 2005

What have you done behind the scenes (tech or otherwise) to prepare for the holiday season?
“We have amazing availability time – the redundancy of hardware down to reliability of software – there’s a lot of work to make sure everything is running. That’s one of the things that we always do going into Q4 – a lot of time goes into predicting load on the machines.”

Are you going to create a special holiday section? Does a special section like that really make a difference, or is it just a nice thing to have?
“Yes, we always do it. Part of it is that people don’t always know what to buy – we have top products throughout the site, but the holiday section gives you some ideas of what’s hot, if you have to buy something for your nephew or niece, for instance. In the end, though, we’re helping people make the decisions. It’s not meant to induce people to buy, it’s meant as a guide.” [Editor's Note: Check out PriceGrabber's holiday shopping guide made up of Featured Products, Shopping Ideas, Editor's Picks, and How-to-Buy Guides]

How many merchants do you have? How many Storefronts?
“9000 total sellers on our site; 6500 storefronts and 2500 merchants.”

What expectations have you set for your team in terms of traffic or revenue growth?
“We’re a private company, so we don’t have to make numbers. As a company, we’re about customer service – it starts with the consumers, merchants, and manufacturers that work with us. The outcome [of this approach] will be better numbers in terms of unique users and revenue and profit – the goal is to build a business that’s sustainable. Today, I can go to Google and double my traffic, but a lot of [PriceGrabber’s] traffic is organic and from distribution partners. One of the problems with the business (and the internet) is that people are still talking about unique visitors. Unique visitors are great, but there’s a difference between unique visitors and valuable visitors. Imagine you have a coffee shop. If you have 1m people coming through and none of them buy a cup of coffee, it’s great for wearing down the carpet, but not good for business. The quality of the traffic matters and people are getting smarter in this respect. Some of the measuring companies, too – look at Alexa [which looks at] reach and the quality of the visitor (page views, etc.) – they are not just counting the number of visitors. Over time, whoever has dominance in terms of organic traffic will do well.”

“The question is who is walking the walk. We’ve never had a pop up ad on our site. We don’t advertise through spyware/adware. If an ink cartridge is generic, we call it generic. “

“I believe that we’re the only company that loses money on the PPC engines as we take you to a product page; we’re saying here’s a digital camera, there are no Google results. This is our investment to bring more people to understand what comparison shopping is. And if that’s what you’re doing, why have the ads at all? A preponderance of people will click on the Google ads, and we’re trying to get people to what they’re looking for as quickly as possible. PriceGrabber is taking people through a complete shopping comparison experience. Let’s build brand equity as opposed to see how I can monetize the click as quickly as possible.”

“In 2004 our revenue from Google was 2% of total revenue. We don’t do arbitrage.”

Read the rest of this entry »


Comparison Shopping – Strategies for Merchants – Tip #2

November 28, 2005

Tip #2: Create Unique Product Feeds for Each Comparison Shopping Engine

Most hosting providers allow you to easily syndicate your product feed to a number of comparison shopping sites. Shopping.com, Shopzilla, NexTag and others let you to point to your XML feed and be done with it. I know it’s easy, but DON’T do it. Seriously.

It’s a simple way to get up on multiple comparison shopping sites, but the feed is not optimized for the individual sites. Again, your listings will not be optimized if you use the automated submission option; products will be in the wrong categories, titles and descriptions will be too long or too short, ancillary information – everything from special shipping deals to product details (new, refurbished, etc.) – will be left out. In other words, the details will be missing. It’s these details which make the difference on the comparison shopping sites.

I know it’s a pain in the ass to create separate feeds for NexTag, Yahoo! Product Submit, Shopping.com, PriceGrabber, Shopzilla, and the 8 other sites you might be on, but if you’re looking for an edge on your competition, it’s worth it. Go ahead and take a risk; disengage the automatic submission feature immediately and create unique feeds for each comparison engine.

Many comparison engines also allow you to submit another site’s feed. Again, DON’T do it…for all the reasons stated above. Each comparison engine has a unique set of feed requirements. Using your Shopping.com feed on NexTag is not taking advantage of all the information which NexTag allows you to submit.

There’s one caveat to this tip. Some sites have a delay between the time you disengage one submission option (automated XML feed from hosting provider, for instance) and engage a new submission option (self submission through FTP, for instance). As I don’t want you to miss out on holiday sales, check with the individual comparison engines to see how long this lag will be. In some cases, it might be smarter to make the change right around New Year’s Eve.

See all data feed optimization strategies.


Comparison Shopping – Strategies for Merchants – Tip #8

November 27, 2005

Tip #8: Add a Logo

Most of the comparison shopping sites allow you to add a logo to your listing. Shopping.com even explicity states “stores that include logos get more leads.” This is a no brainer. There are many ways to stand out on a search result page (and I’ll cover a lot of them in upcoming tips) but one way NOT to stand out is to stick with a regular text listing.

In this search for a Sharp R-820B 900 Watts Convection / Microwave Oven, the first store, BeverageFactory.com has a logo while Web Stores America and eTronics do not. There are a lot of things to look at on the page (reviews, price, notes, etc.), but my eye is drawn to BeverageFactory.com because of the logo:

Logos on comparison shopping sites

Why not upload a logo, run a test for a week, and see what happens? This could be a great way for you to stand out and compete with the big boys in your industry. Don’t have a logo or think it’s too expensive to get one? Check out LogoMaker where you can build a quality custom logo in minutes for just $99. Looking for something more professional, check out LogoWorks.

See all data feed optimization strategies.


Comparison Shopping – Important Holiday Season Happenings

November 26, 2005

Rachel Rosemarin’s Google’s Empty Stocking in Forbes.com turned out to be a Froogle story. When she interviewed me, though, she asked me what I was looking at which might make the difference for the comparison shopping sites this holiday season.

Here’s my top 3 list:

1. CNET Shopper local inventory information.
This is by far the most interesting development I’ve seen in terms of comparison shopping this holiday season. Almost real time inventory at your local Best Buy, Circuit City, etc. Wow. Google has since stolen CNET’s thunder with Froogle Local, but Froogle does not have inventory information worked into the system. This is a misconception that seems to be spreading throughout the blogosphere and mainstream media. The local information is provided by ShopLocal, which manages local circulars (actually, they do a lot more, but we’ll get to that soon) for well established national chains. While inventory information is probably coming sometime next year, that’s not what is currenlty offered through Froogle Local.

2. eBay/Shopping.com & Scripps/Shopzilla.
With multi-billion dollar companies behind them, I’m excited to see if eBay or Scripps really push their new acquisions this holiday season.

At this point, eBay has listed Shopping.com on its homepage, but that’s about it. Last month, Scot Wingo pointed out that Shopping.com ads were showing up on some eBay searches, but I haven’t seen any for a while. I think this is smart. Why push a lower margin business? That’s what Shopping.com is, right? While we’re not going to see eBay break out operating profit for Shopping.com going forward, past earnings statements show a much lower margin than eBay gets through its traditional auction business.

It’s important to remember that eBay bought Shopping.com to retain its own sellers who were starting to venture out of the eBay universe. I’d hope there’s more integration on that side of the business – pushing eBay sellers to also list on Shopping.com – but I haven’t seen any signs of that happening yet. It’s one of the first questions on my list when I make it back into Shopping.com…I’ve been told they’re too busy right now to talk. Grrrr.

Scripps acquisition of Shopzilla, on the other hand, is a totally different situation. Scripps believes in Shopzilla’s business and wants to help it grow. You can now see integration of Shopzilla listings on many of Scripps’ Network websites (including FineLiving, DIY, HGTV, Food Network, etc.) Scripps’ Broadcasting websites (including KJRH Channel 2 in Tulsa, OK, WMAR Channel 2 in Baltimore, MD, WPTV Channel 5 in West Palm Beach, FL, etc.), and Scripps’ Daily Newspapers (including the Abilene Reporter-News, Corpus Christ Caller-Times, Denver Rocky Mountain News, Wichita Falls Times Record News, etc.). In most cases, the ads look something like this:
Shopzilla on Scripps

It’s nothing special at this point…there’s a lot of room for optimization of the ads and deeper integration. Shopzilla should be showing more than text links. I think that image ads (such as the ones seen on AOL Search) have the potential to replace some Google Adwords ads which are prevalent throughout Scripps’ sites.

But that’s just online. Greg Yardley told me that he saw outdoor advertising (on buses and taxis) for Shopzilla in NYC. What about in the actual newspapers and on TV? There’s great potential to leverage the power of Scripps and become less dependant on the PPC networks for traffic (although if that works, I’m not going to knock it).

3. Yahoo! Shopping – Shoposphere, Coupons/Deals, Gift Recommendations
Yahoo! Shopping packs a big punch this holiday season beyond regular offerings like Top 10 Lists and Free Shipping Deals.

Yes, Yahoo! Shopping launched the Shoposphere, but I don’t think pick lists will have that much of an impact on holiday sales (although I’d love to be proved wrong). However, I think Yahoo’s integration of coupons and deals, will have an immediate impact, as everyone is looking for some sort of savings when buying online. I expect Coupons, Rebates, and Free Offers to have a strong impact on clickthrough and conversion rates:
Coupons, Rebates, and Free Offers from Yahoo! Shopping

Also, Yahoo! Shopping has a Gift Finder service (now out of Beta) which I’ve heard has been tremendously successful in increasing clickthrough rates (I’ll ask for actual data, but I’m not sure they’ll share the information).


Follow

Get every new post delivered to your Inbox.

Join 295 other followers

%d bloggers like this: