Shopzilla’s Q2 2006 Revenue and Earnings

July 24, 2006

From the Scripps earnings release:

At the company’s interactive media division, which includes Shopzilla and uSwitch, second quarter segment profit reached $16.5 million on revenue of $65.0 million. On a pro forma basis, as if Scripps had owned Shopzilla and uSwitch since Jan. 1, 2005, interactive media division revenue nearly doubled.

Rapid growth at Shopzilla and uSwitch is attributable to growing consumer acceptance of Internet search and price comparison services in the United States and United Kingdom. Shopzilla is a leading search and price comparison Web site for consumer products in the U.S. In the United Kingdom, uSwitch is a leading Web site for consumers who want to find, compare and switch essential home services.

Forecast – from the conference call:
-Segment profit for the interactive division up 8% y/y in third quarter, which is less than expected due to increased costs for European expansion, overhead, and technology. Willing to give up some margin this year on Shopzilla to make improvements.
-Segment profit of $65m still expected for full fiscal year, $50 – 55m of which is expected from Shopzilla
-uSwitch 3rd quarter is very low seasonally.

Don’t think Scripps broke out Q2 2006 numbers for Shopzilla and uSwitch. Will contact investor relations…or if someone from Shopzilla reads this, please let me know.

For comparison, Q2 2005 numbers for Shopzilla: revenue of $29.5 million and earnings of $7.6 million.

-Question on the call about integrating Shopzilla and uSwitch into other media divisions. Answer: Shopzilla is “working with everyone on cross-promotion. Integrating Shopzilla contextually across all Scripps web sites.” Also leveraging newspapers and TV stations. [Poor Tim Peterman, senior vice president, interactive media, he lost his voice and couldn't answer the question himself.]

Related Posts:
Scripps’ (SSP) Q1 2006 Results – April 25, 2006
Wall Street Wrong about Scripps (SSP) – March 16, 2006
Comments on the uSwitch Acquisition – March 16, 2006
Shopping.com Revenue Numbers – February 3, 2006
Another Stellar Quarter for Shopzilla – Revenue and Segment Profit Up – February 2, 2006
Scripps Provides 2006 Guidance for Shopzilla – December 5, 2005
Shopzilla’s Revenue Up. Earnings Down? – October 26, 2005


Proxy Errors, Merchant Center Down, and FTP Location Not Accepted. Oh My!

July 22, 2006

For the last couple days, I’ve tried to carefully document the sign up process of the top shopping comparison engines. Sadly, I can’t do it.

I’ve gone through 8 engines and run into problems in almost every case. No lions, tigers, and bears here, but ‘Proxy Error’, ‘Merchant Center Down’, and ‘FTP Location Not Accepted’ messages are just as bad.

No need to call out which sites had which errors. I’d just encourage every engine to set up a focus group to look at the sign up process…if I’m having this much trouble, I have a feeling that you’re losing potential customers.


Become Launches Filtering Feature Called Search Zoom

July 21, 2006

No longer do you have to weed through hundreds or thousands of search results to find a discussion forum or product specs for Aston Martin’s Vanquish. With Become, you can search for ‘Aston Martin Vanquish’ or any other product and then filter by Product Reveiws, Buying Guides, Discussion Forums, and Product Details.

As Jon Glick, Become’s Sr. Director of Product Search told me, “users can see what type of listing it is before going into it.” I think this is an extremely useful feature. My original search results for ‘Aston Martin Vanquish’ (yes, I’m obsessed) contained 171, 573 results vs. the 51 returns for discussion forums (which I really wanted). This is a search engine starting to answer my questions as opposed to just returning a bunch of irrelevant results.

So how does this work? Jon immediately went over my head in his explanation (all of you know how sophomoric my tech undertanding is), but here’s what I was able to grok. The 4 month project started with human input to define the parameters for a buying guide or discussion forum (a buying guide has characteristics X, Y, and Z while a discussion forum has characteristics D, R, Q, and Y). Then the machine learning takes over, looking at each and every page that Become.com crawls to try to put it in a bucket. But this has to be done in an efficient manner balancing precision and recall and this has to be done for all 4 filters. And then there’s the added issue that one web page can be both a product review and product detail page (think Amazon’s product pages). As a marketer, I have no idea how difficult this is to pull off, but it didn’t sound easy and I don’t see many other companies with a similar feature set.

What immediately came to mind when Jon explained Search Zoom was Kosmix’s filtering and personalization options. Kosmix also crawls the web, searching over 3.2b pages, and has what I’d consider advanced filtering options. The company also looks at individual web pages, not just the website as a whole.

So if I find the results from Become’s Search Zoom so helpful, why don’t the general search engines do this? Jon explained “If you’re a general purpose search engine, you can’t have 30 buttons across the top. As a vertical search engine, we just wanted to limit the choices to the decisions that people who need to make a buying decision need. We have a more constrained problem. We can help people in ways that Google as a general search engine can’t.”

With Search Zoom, Become has an extremely useful and easy to understand product which it should try to syndicate. As I mentioned last week in reference to Zillow’s partnership with Yahoo!, biz dev deals are an attractive alternative to spending millions on the PPC engines. First on the biz dev list should be Shopping.com. Become is syndicating Shopping.com’s price comparison listings to supplement its own…there’s already a relationship. Shopping.com recently added a ‘Buying Guides’ section…this could be 227x better with Become’s assistance.


Buy.com’s Shopping Comparison Engine

July 20, 2006

Thanks to a tip this morning, I discovered that Buy.com has entered the comparison shopping space…and it looked like a great implementation. Since I don’t follow Buy.com that closely, I’m not sure if this is really ‘new’, but it’s the first I’ve seen or heard of it.

Now notice that I said ‘looked’ in the first sentence above. Unfortunately, 8 hours later, all signs of the shopping comparison engine listings are gone. When I played around with the listings this morning, I noticed both PriceGrabber and Channel Intelligence (CI) in the click-out URLs. Unfortunately, neither company would comment for this post and suggested I contact Buy.com. Emailed Buy.com this morning, but haven’t heard back.

Obviously this looks like a win for PriceGrabber over Shopping.com and Yahoo! Shopping in the battle for partners/affiliates.

Supplementing the main results with shopping comparison engine listings is a smart move. I’ve been playing around with the site and there are a ton of products which are out of stock. Such a frustrating experience! And such a costly problem for Buy.com.

I’ll tell you more when there’s more to tell.

Now I’m just waiting for Amazon to realize the power of shopping comparison engine listings and bring their ‘used and new’ items to the forefront. Aren’t the Amazon Marketplace listings more profitable for Amazon than their own products which they have to warehouse and fulfill? Check out the listing and commission fees Amazon collects from it’s Marketplace sellers.


How not to be a dot com bomb

July 18, 2006

I get a couple emails a week about incredible new companies launching innovative artificial yada yada yada. Before you contact me, make sure your site can stand up to Dead2.0′s 11 Suggestions For Not Being a Dot-Bomb 2.0.


ShopWiki Raises $6.2m

July 18, 2006

Here’s the official company release.

The financing came from Generation Partners, a private equity firm with past investments in a seemingly random mix of companies. John Hawkins, Managing Partner of Generation Partners, will join ShopWiki’s Board of Directors.

It took me a while to make the connection between John Hawkings and Kevin Ryan (ShopWiki’s CEO)…turns out they were both on the board of HotJobs back in the day. And Red Herring figured that out before I did. Grrr.

According to Shopwiki, the funding will be used for marketing, infrastructure, international expansion, and growing the staff (now up to 30).

If history is any indication, this financing is good news for the company. Almost every venture backed shopping comparison engine had a successful exit:

Jango acquired by Excite ($35m)
Junglee acquired by Amazon ($250m)
C2b acquired by Inktomi Product Search ($90m)
MySimon acquired by CNET ($700m)
Dealtime/Epinions formed Shopping.com, acquired by eBay ($476m)
Bizrate renamed Shopzilla acquired by EW Scripps ($560m)
PriceGrabber acquired by Experian ($485m)

Related Posts:
ShopWiki – Shop By Color – June 14, 2006
eCommerce, Microsoft Style – May 19, 2006
Former DoubleClick Execs Launch ShopWiki – April 19, 2006
Dulance – We hardly knew you – March 29, 2006


Google & Vertical Search

July 18, 2006

In case you had any doubt that Google was interested in chasing down higher value vertical search revenue, check out these NYC based sales positions.

Verticals mentioned include: Finance, Travel, Local/Classifieds, Pharma, Entertainment, Consumer Packaged Goods (CPG), B2b Industrial Markets, etc.

Seems like a lot Columbia Alums were interested in careers at Google after the recent Google networking reception.


Stopping a Spammer

July 18, 2006

I’m getting a ton of comment spam from EveryDepot.com (don’t go to the site). Anyone know how I report the site? Here’s the fake WHOIS information.


Post Volume

July 18, 2006

Sorry for the lack of posts recently. I’m getting close to launching the private test version of my data feed creation, management, submission, and optimization service…ok, it won’t be all that on day one, but my incredible team has put together a very user friendly, self-service option for feed management.

And as I do need to make a living, that’s been the priority the last couple weeks.

I have to get out a couple posts this week on bigger picture analysis type stuff (very specific, I know), but after this week, expect those type of posts to be put on the back-burner until August 1. In the meantime, I’ll definitely post more ‘newsy’ items. Thanks for sticking with me.


PR in the Age of the Blogosphere

July 16, 2006

A couple months ago a PR rep at a shopping comparison engine anonymously left the following feedback in response to my Shopzilla/Scripps Howard News Service article:

“You asked for feedback and seem genuinely surprised that you don’t have more participation on your site. Ok, here goes: when you bite the hand that feeds you with articles like this (and numerous other examples), you provide a massive disincentive for people to get involved.

Most of your articles seem to try to “find the dirt”, whether at Shopzilla/Scripps, Froogle, Shopping.com, et al. Since getting mentioned on comparison engines often means that you will take a shot at our employer, it’s simply not worth it. It’s better to stay under the radar.

Recognize that your audience is a bunch of industry participants that want to learn more about competitive feature sets, new developments, etc. We can get investigative journalism elsewhere, particularly when it means that we might be your next target.

This is genuinely meant as feedback, not criticism, so I hope it’s taken as such. You’ll note, though, that I’m not willing to put my name either.”

I didn’t respond to this comment. There didn’t seem to be any need to do so. I viewed the comment as constructive criticism. I thought about it for a bit…but that was it. In fact, I completely forgot all about it until I read Marc Cuban’s recent post on criticism.

If I can take the feedback, I hope that the person who wrote the comment and her company can handle my feedback as I think there’s a good lesson here for PR executives and general management teams living in the age of the blogosphere…

Dear Anonymous,

Thank you for reading ComparisonEngines. Whether you like what I’m doing or not, I appreciate that you took the time to air your thoughts.

Unfortunately, though, I think that you and your company are living dangerously if you think that not talking to a blogger like me and trying to stay under the radar is smart. As Glenn Reynolds, author of An Army of Davids said in a Guardian Unlimited article back in April, “You can bury your head in the sand, but very quickly you’ll look like a very old-fashioned company.”

While I’m still not completely clear how it happened, at some point over the last year, I became a Malcolm Gladwell – esque influencer. Now before I sound a like I’m getting too big for my britches, I freely admit that I’m not the biggest blogger out there, but within the shopping comparison engine and vertical search industries, my posts are fairly well followed. And through working with Danny Sullivan’s Search Engine Watch, I’ve increased my profile a bit.

You commented that “when you bite the hand that feeds you with articles like this (and numerous other examples), you provide a massive disincentive for people to get involved.”

I ran this by a couple people much smarter than I. Mike Manuel of Media Guerrila replied: “It’s like saying ‘play nicely, or else.’ Which is just BS.”

You have to realize that in the age of the blogosphere, you no longer control the story. Stop and think about that for a second. That’s a HUGE change from 10 years ago. You can help shape the story if you and the executives you work for are involved, but hiding under a rock just means that you can’t stand up to a transparent critique.

As Garrett French of Search Engine Lowdown commented, “The more open we are with criticism – as long as it’s reasoned and non-malicious – the better we serve the online space.”

I’m not out to ‘dig up dirt’, but the beauty of the blogosphere is that anyone can post anything and if a company goes ‘dark’ and doesn’t talk to the media, this type of behavior is going to attract even more attention. You said that talking to me means that I might take a ‘shot’ at your employer and ‘it’s simply not worth it.’ To me that means that I’m right on target in my analysis and you don’t have a story that’s going to prove me wrong or change my opinion. Yes, your job is to get the best story possible written about your company, but if you can’t handle the more critical pieces and view them as constructive feedback, then we’ll never have any relationship and my coverage of your company will probably just continue down a rocky path.

But it doesn’t end there. You incorrectly said in your comment that my audience ‘is a bunch of industry participants’. That’s not at all the case. Employees at comparison engines make up an estimated third of my audience. Another third is made up of financial analysts/VCs/media. Another third is made up of merchants who are trying to figure out where to allocate their monthly budget. Oh, and don’t forget about the people who are interviewing with your company…the smart ones contact me for my opinion before they take an offer.

As for the comment on ‘biting the hand that feeds me’, if you’re literally talking about feeding me, I have probably taken less than $875 in food and schwag from the shopping comparison engines over the last year. And please note that there aren’t even Google Adsense or Yahoo! Publisher Network ads on my site. If you’re talking about feeding me news stories…that’s not how it works with me. I write what I want to write about, this is not a press release regurgitation site.

I’m here to shed light on what’s happening in this industry. If you completely disagree with what I write, then rip my opinions apart with solid facts. Better yet, have your CEO or a member of management call me and honestly answer my questions. I realize that you can’t share everything, and I don’t expect you to. Just know that there aren’t many rocks to hide under these days. This is not a threat. Just reality.

Mike Frigden (of Farecast) wrote a post recently about Steve Rubel’s comments on how traditional marketers should approach bloggers:

Steve Rubel, of Edelman Public Relations…mentioned that one of the biggest issues is that “every marketer is too worried about giving up control”. He quoted [Thomas] Friedman’s book The World is Flat, “we’re moving from command and control to collaboration and connectivity”.

Some comments that were made by the audience on how to connect with bloggers:
- Demonstrate that you have read their blog
- Do not ask a blogger to blog about something they are obviously not interested in
- Do not expect them to write anything other than what they think

2 points here go hand in hand. You are no longer in control AND you can’t expect me to write anything other than what I think. Sorry, I know this sucks for you. Your job is to get positive press about your company, and as a fiercely independent analyst, I’m throwing a wrench in your plans. There are plenty of bloggers who will mindlessly write what you say, but I’m going to dig a little deeper than most and offer up my opinion.

You can completely shut me out, but that’s only telling me what I already know, that your company is facing an uncertain future. It’s time for you to embrace that uncertainty or else you might crush yourself under the weight of that rock you’re hiding under.

I know it’s scary to put yourself out there without controlling the story, but view this as an opportunity. Many executives at the shopping comparison engines talk to me and other bloggers on and off the record to get our feedback on plans or strategies. It might be time for some of your management team to do the same.

-brian

Brian Smith
Analyst (and proud Blogger), ComparisonEngines.com & VerticalSearch.net
Vertical Search Correspondent, Search Engine Watch


Follow

Get every new post delivered to your Inbox.

Join 295 other followers

%d bloggers like this: