Farhad Mohit, Shopzilla’s Chief Product Officer, is a great evangelist for the company and always drives home 2 points when I speak with him. First, Shopzilla is a technology company. Second, the key to Shopzilla’s success is its focus on bringing together the smartest people to build the fastest and smartest shopping comparison engine; Shopzilla does not getting caught up with ancillary offerings. This second point has sparked my interest over the past couple months as Shopzilla has moved ahead of Shopping.com in terms of revenue while Shopping.com touted new offerings (Hotels & Mortgages) and talked a lot about international expansion. Maybe it’s time for Shopping.com to focus. [Yes, I'm trying to stir things up a bit...a nice rivalry is hard to find.]
I caught up with Farhad Mohit at Shopzilla’s office in LA 2 weeks ago…
What were the top 3 things you learned last year that prompted changes going into this holiday season?
“1. Functionality wise, you better have it locked and loaded. 2. Scalability. Last year we were scrambling to get capacity. We’re better prepared in terms of certain areas which will become hot. You have to be in front of the curve in terms of SEM, making sure to get the holiday words out their through bidding and optimizing. It starts with Halloween. We did an unbelievable amount of Halloween costumes. 3. Be prepared. You can’t rush and jam things in at the last minute. Right now we have code freeze, and we’re not releasing new stuff going into busiest time of the year. “
What have you done behind the scenes from a technology perspective to prepare?
“We’re building our indexes faster – now 8 times a day. It’s a big deal as you don’t want vendors to show stale inventory. The search engine code was optimized. We dropped from clusters of 60 to clusters of 24 which means we have a 70% faster search engine that can handle more queries for same amount of hardware. We have a more scalable search engine. One example of this is how we work with AOL; they hit our engine every query – they pass us the query and we tell them if we have something available. The usual way is to pass a keyword list, but that limits you to the number of keywords on a list and you have to constantly update that list for seasonal products, mis-spellings, etc. With us, they send queries all day long. Depending on the time of day, a different product will come up. Around Halloween, when you say ‘witch’ it might return results for witches costumes, but around summer, we won’t return anything. During the summer, a search for ‘genie’ would return garage door openers. AOL sends everything and we return live results. “
“It’s very taxing on our servers, and we developed a much starter and faster algorithm for returning those results. It’s what they like most about us.”
When do you expect to see holiday sales start to come in?
“They are already coming in. The Monday after Thanksgiving is big. There are a couple peaks. January is also very big for us as people are cold [they don’t want to go outside] and there are lots of sales. “
You haven’t rolled out ‘fancy extras’ like RSS feeds or mobile shopping apps? Why not?
“It’s a matter of focus. We are focused on getting people into the site and giving them relevant results. RSS doesn’t do that. We have a lot of technology openings in the company. Our technologists are working at the main problem. For every single product, we want to have all the information organized perfectly so we can take a query and match it with the relevant set of results. Once we solve that problem, having it deliverable with RSS or having it work on your cell phone will come. [RSS and WAP] are interesting and relevant in the future. You choose Google first and then go to use their WAP application. “
“[RSS, etc.] also requires a different level of engineer – someone who can make your content wappable is different than someone who can get your search algorithm working faster. I wish I could do it all, but we’re focusing on what we thing is important. We’re passed the press release stage. “
Can you explain the seasonal increase in CPC rates? Is it because Shopzilla’s PPC costs go up? Is it because of higher conversion on the site?
“Both are related. Around the holiday season, people are buying much more and they are forced to buy, so conversion rate goes up. When you’re gift buying, conversion goes up automatically because you have a broader threshold [for what’s acceptable] and you’re in a time crunch. Conversion rates jump dramatically around Christmas. If markets were as fluid as possible, you wouldn’t have to have these increases. But we still leave money on the table. Everybody wins.”
“I don’t think that all the participants are in tune with it. As we grow, these changes will be less and less relevant. It’s going to become more of a perfect market. We want to make it as easy as possible for vendors to bid and drive as many qualified leads as possible, but it just takes time.”
Will you be doing any offline marketing through Scripps this holiday season?
“Stay tuned.”
Can you discuss growth internationally?
“We believe the best product will win. The best product from the US can be exported to other countries. We understand SEM and SEO to get the exposure. We don’t have a significant international presence compared to our rivals, we don’t have services like mortgages and hotels, and we’re growing faster. How will it bode for them next year when we do push internationally? The product is what’s going to win, so we’re happy where we are.”
What’s it like working with a $7B company?
“So far it’s been a joy. We have one point of contact, the VP of Corporate Development, and he leverages the organization to our benefit. There have been very small things that suck – dealing with Sarbanes-Oxley, switching to their calendar, etc., but it has been a joy.”
Can you discuss the plans?
“Overall we’ve said it – we’re planning to leverage their Scripps network and get the Shopzilla name out there. They are betting big on our technology, people, and name. They have a lot of resources, but they are betting on us. As for integration, just look at the content sites such as HGTV.com. [Check out HGTV’s Decorating page for an idea. The integration is happening, and we’re planning more – the biggest thing is that they are giving us all support and no corporate weigh down.”
What are you most excited about?
“There are two things. First, they have a great demographic for where we are headed. The demographic is women between the ages of 25-50. As online shopping goes mainstream, it will mimic the mainstream audience. Women between 25-50 are the maintstream, and we’ve seen that transition over the years. Scripps has experience building lifestyle brands, and we’re interested to see how effectively we can leverage that to build Shopzilla into a brand as well known as HGTV.”
“Second, being part of a $7-8B organization that is betting on you. It allows us to think about how to win in the space more globablly than before. When we were stand alone, we always had to be looking at the next quarter. It was more about survival mode. We have a different perspective now. We will be a player in the space, it’s just a question of how big we will be. Before the deal, I never could think about these things. “
How do you think the recent acquisition will affect Shopzilla?