Shopzilla Realizes Its a Search Company

September 27, 2007

Ok, it seems to be in a test phase so you might not see it yourself, but Shopzilla dramatically increased the size of the search box on its site and completely removed the staid browsing experience on those pages.

New…
Shopzilla search

Old…
Shopzilla shopping search

Shopzilla owns the URL http://www.shoppingsearch.com (what I originally wanted to call this blog), so it’s nice to see the company is coming to grips with an identity it knew about years ago.

More on Shopzilla in a bit. The company lost its recently hired CMO, Rysa Pinter, a couple weeks back so I caught up with Bill Glass earlier this week. Will write up the post very soon.


Epic 2014

September 23, 2007

Big surprises from Shop.org:
-Google didn’t seem to be on everyone’s mind
-I think I was the only person who brought up the R word

In my presentation with the snowboard king, Nathan Decker, I talked about the potential for Google Base for a bit. I’ve already discussed in past posts some of what I covered, but just think about Google Product Search getting together with Google AdWords while working more closely with Google Analytics and Google Checkout.

And I showed a snippet of Epic 2014. Don’t know how, but everyone seems to have forgotten about that little video as well as forgetting about Googlezon.

Epic 2014’s description of Googlezon: “Social recommendation engine, commercial infrastructure, detailed knowledge of every users social network, demographics, consumption habits, and interests to provide total customization of content and advertising.”

Googlezon was later referred to as Googazon by Gartner Analyst Hung LeHong: “Googazon will sit between your customers and your company. It will be able to provide access to all retailers. It will close 30 percent of transactions and guide 50 percent of purchases in any channel. It will force full retail transparency, and will dictate how we compete,” LeHong said. A Googazon could help consumers by finding deals and matching them to the buyer’s financial profile.”

The one missing piece of Googazon was the fact that Google didn’t have the retail credibility of Amazon: “Although Google might evolve in this direction on its own, LeHong said, the company does not yet have the retail credibility of Amazon.com, which would be needed to generate trust among both buyers and sellers—hence, his suggestion that the two companies could combine.”

Isn’t Google building that retail credibility with Google Checkout?

Amazing how so much of what was presented in Epic 2014 is coming true. If you can get by the whole Fourth Estate talk, it’s a great video to watch/discuss.


Stranger In A Strange Land

September 22, 2007

I’m a strange person in a strange world. I’ve been on the web since late 1994. I remember what I was doing the day Netscape went public (August 9, 1995). In 1996, I read with wonder The Road Ahead by Bill Gates (which came with a CD) and The Internet Report by Mary Meeker and Chris Depuy.

Fast forward about 11 years. I finally understand MySpace, at least as well as an over the internet hill 31yr old can. I use Flickr, Photobucket, YouTube. My brother runs a virtual world for kids. I’m active on Facebook. I read TechCrunch. I interact with people like Om Malik or Matt Mullenweg every week. I work out of my VC’s office that happens to invest in companies like Meebo, SendMe, and BrightRoll.

All of which basically means that I’m completely out of whack with what the normal internet user goes through on a daily basis. Attending Shop.org was a nice slap in the face. The first two Keynote presentations talked about the new rule of law for marketers – basically, that marketers are no longer the stewards of the brand. The users are in control. Companies that fight that control are closed (very very bad word) and will be left in the dust by more open organizations.

While I was smuggly sitting there thinking ‘I could give this presentation’, after talking with some friends after the conference, I realized that I’m an idiot. Well, I knew that a long time ago, it’s just that the conference helped jog my memory.

You see, all these nice Web 2.0 social networked widgetized thingamagigies are great, and adoption of these technologies is advancing at an incredible clip, but for mainstream Jane web user, she doesn’t care about the latest and greatest from some random new start up. She wants her life online to be simpler. She wants to shop with ease. She definitely thinks she’s in control, and if someone treats her otherwise, she’ll go to the next site.

I need to do a better job at looking at new technologies in this light.


@ Shop.org – Lots of News

September 18, 2007

Lots of press releases coming out. It’s only 6:50am, and I’m already playing catch up. Expect quick updates throughout the day…probably not much in depth analysis this week. Also, with quick updates come lots of typos. I apologize in advance if my English ain’t to ok.


TheFind Adds New Advertising Option – Mouse Over Banner

September 18, 2007

TheFind announced today an innovative new advertising unit: Mouse Over Banners. Here’s the press release.

TheFind Mouse Over Banner

While the other shopping engines struggle to create a loyal user base (partly because they’re incentivized not to – if they are paying for an incoming click, they have to monetize that user with an outgoing click ASAP), TheFind continues to provide a pleasurable shopping experience where consumers can leisurely browse through a ton of products. As opposed to monetizing on a quick CPC exit, TheFind is taking advantage of high CPM rates.

Not sure exactly how this Mouse Over Banner program will play out. Siva’s language in the press release made me think of Adware *cringe*. I really hope merchants are not able to use the Mouse Over Banner as an Adware module; mouse over a Macy’s product and see an ad for Nordstroms. This would be a terrible step in the absolutely wrong direction. I’d much rather see these banners allow merchants to highlight promotional messaging – coupons, sales, special offers, cross-sell, in-store offers, etc. Think of it as an ‘add on’ service that you see on Shopping.com and the rest of the shopping engines.


Shopping.com Gets With The Program

September 18, 2007

I’d like to think that all my nagging had something to do with it, but I have a feeling the new management team at Shopping.com recognized early this year that not all was right for merchants submitting products to the shopping engine. Because of this, Shopping.com is announcing a slew of programs for Q4 to help merchants sell more effectively on Shopping.com.

The press release highlights:
-Value Based Pricing – addressing some concerns over its syndication partners, Shopping.com seems to realize that not all clicks are created equal. Merchants will be charged different CPC rates based on a number of factors including the quality of the leads they are being sent. I have some concerns about the transparency of the program and the inability for merchants to opt out of the ‘content’ network, but I’m encouraged by this step. Here’s what Shopping.com is sharing with its partners

-SKU Level Bidding – FINALLY. After getting the party line for the last 2 years that merchants aren’t ready for SKU Level Bidding or that it’s on ‘the list’, Shopping.com is moving forward with this program. Merchants will actually be able to move beyond the category level and optimize individual SKUs. After harping on this point for about 2.5yrs, it’s odd to think that this is actually going to happen. Thank you, Shopping.com.

There are a number of details about these programs which I discussed with Alisa, Tomer, and Dariana last night, but I’m actually not sure what was on or off the record, so I’m going to hold off for now discussing specifics.

I think these moves show that Shopping.com actually wants to improve its relationship with its merchants. I can’t remember the last time I associated such a thought with Shopping.com. Have we reached a detente in this chilly relationship which started years ago? ;)

There were two other ‘innovations’ highlighted in the press release:
-shopping cart program – now connected with eBay Express
-distributed commerce program – monetize the 99% of your traffic that doesn’t convert

I’ve covered both of these programs before to some extent, so I’ll let eTail dTail or CSE Strategies pick up my slack…will probably re-visit soon.

Previous Posts
-SKU Level Bidding – June 5, 2006
-JP Werlin’s comments on SKU Level Bidding – June 6, 2006
-Impending Ecommerce Doom – September 4, 2007
-Shopping Engines, Beware of Google Checkout – July 6, 2007


ChannelAdvisor Acquires Marketworks

September 17, 2007

Last week ChannelAdvisor acquired Marketworks. The purchase price was undisclosed.

According to the press release, the combined company will have 5,500 companies on a global basis. I believe ChannelAdvisor had aprx. 3,600 customers before the acquisition, so Marketworks added about 1,900 customers to the mix.

According to Scot Wingo, ChannelAdvisor CEO, this acquisition “gives us an entry-level product that we haven’t had until now. So we have a real cradle-to-grave solution, where as before we only had adolescent and up.” (from newobserver.com)

This acquisition follows a $30m venture capital round led by NEA.

A popular question of late has been why ChannelAdvisor hasn’t gone public yet. One hypothesis is that Wall St. liked, but didn’t love what they saw. None of the following ideas have been confirmed by ChannelAdvisor, they are just my thoughts after talking to a number of Analysts.
-A majority of ChannelAdvisor’s clients (maybe 3,300 out of 3,600?) were small eBay sellers paying ChannelAdvisor almost nothing in fees. Even though the company has done an incredible job of moving past eBay, the company is still known as the eBay seller helper. And for all the talk that eBay sellers are graduating from eBay onto marketplaces and comparison shopping engines, this is not happening quickly as the vast majority of eBay sellers are not sophisticated enough to move on at this point.
-ChannelAdvisor had already up-sold or attempted to upsell the majority of its 300 or so larger merchants multiple services – search marketing, marketplaces, comparison shopping – and therefore the company wasn’t going to significantly grow revenue from its current client base.
-ChannelAdvisor (for the most part) charges merchants a flat rate + % of sales. As merchants perform better, they expect a discount on the % of sales which means that as ChannelAdvisor grows revenue for its clients, it doesn’t participate fully in that growth.

So what is this acquisition all about?
-ChannelAdvisor quickly grows its client base and revenue.
-ChannelAdvisor becomes a bigger piece of the eBay, Amazon, Adwords, AdSense, Shopzilla, Shopping.com, etc. pie, thereby potentially achieving pricing power in some channels (although not all marketing channels work this way) or at least getting better attention/customer service in some channels.
-Marketworks primes the up-sell pump for ChannelAdvisor as ChannelAdvisor’s search marketing and comparison shopping solutions (at least) seem more sophisticated than Marketwork’s solutions which start at a very low $29.95/month.

So what’s next for ChannelAdvisor? I have a feeling it will take a bit to swallow the Marketworks acquisition, but if I were Scot Wingo, I’d look to other online marketing channels which I’m not currently selling to my client base – either developing new systems in-house or acquiring service providers in the following areas: email marketing, graphical advertising, video advertising, affiliate marketing, lead generation, domain parking.


Shopzilla Starts up TV Commercials

September 16, 2007

Haven’t seen the ad(s) yet, but Shopzilla/Scripps got a bunch of press touting the commercial(s).


Shopping.com Increases CPC Rates for Some Categories

September 16, 2007

On Friday @ 5:15pm, Shopping.com announced some category minimum decreases and some category minimum increases.

OUCH! A Pre-holiday shopping season increase in some category minimums.

Ok, good news first. Beginning October 1, Shopping.com will decrease the category minimum CPC rates for Books, Music, and Video (BMV) as well as Car Seats, Cribs & Bassinets, Strollers, and Watches.

Shopping.com Rate Decrease

Now to the bad news. Beginning October 1, Shopping.com will increase the category minimum CPC rates for Auto Parts & Accessories, Clothing, Cosmetics, Furniture, Garden, Handbags & Wallets, Health Aids, Home Furnishings, Jewelry, Kitchen, and Personal Care.

Shopping.com Rate Increase

Not sure yet if there will be additional rate increases November 1, when they usually take effect for the holiday shopping season.

So why would there be rate increases now? Here are some thoughts:
-These are early rate increases for the holidays. While holiday shopping doesn’t actually start for another couple weeks, the trend is for the holiday shopping season to start earlier and earlier. This is possibly a reflection of that. Last year’s increase was announced in early October and went into effect November 1.
-Shopping.com is giving away too much of the pie for syndication deals – when negotiations start at 80%+ for partner deals, Shopping.com needs to find new ways to make money.
-Adwords rates are generally getting more expensive for Shopping.com. The Quality Score for Adwords depends partly on the click-through rate (CTR) of the advertisement. More Google Checkout icons are showing up on merchants’ Google Adwords listings, so I wouldn’t be surprised if Shopping.com and the rest of the shopping engines are seeing their minimum bid requirements increase.
-Another factor for Quality Score is the quality of the landing page. When the first 5 listings and the last 5 listings on a page are Google AdSense listings, I have a feeling Google doesn’t consider that page so relevant. Here’s an example of a landing page for a Google search for ‘Prince Tennis Racket‘.
-This could be an attempt by Shopping.com to move more of its merchants to the new Buy it on Shopping.com program.

Now as for the decreases in click rates:
-BMV is a very low margin group. I wouldn’t be surprised if Shopping.com was having trouble attracting and retaining merchants in this category. However, Shopping.com also needs to make it easier to submit BMVs – there shouldn’t be a separate feed necessary.
-As for the baby goods, not really sure.
-As for the Watches, maybe Shopping.com was just too out of line with the going industry average of $0.50/click.

Again, I’ll let you know what Shopping.com says when I hear back from Tomer. Oh, and Shopping.com, you really need to get your phone tree up and running. Couldn’t figure out Tomer’s extension and only 1 person (in Ops) answered his phone @ 5:45pm on Friday.


Mobile Shopping…We’re Not Ready

September 13, 2007

Sprint got tons of press this morning in launching its partnership with mShopper.

I’ve written about Frucall, GPShopper, Neven Vision (acquired by Google), Riya/Like.com, and Scanbuy. Sorry, but it’s still too early for mobile shopping to take off. This is not a big deal, just a nice little press release for Sprint in the wake of continued good news for Apple’s iPhone.


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