Where are the Shopping Engines? Not at Internet Retailer Chicago

March 31, 2010

Over the last couple years, some shopping engines have sat on the sidelines during the bigger etailing conferences. Well, it looks like they’ll continue to sit on the sidelines in June. Only Become.com, Shopzilla, Smarter.com, and TheFind currently have booths at IRCE.

-Google isn’t on the list of current exhibitors. Usually you can find Google Product Search next to Google Checkout, Google AdWords, Google Analytics, and 6 other Google products
-PriceGrabber is a stalwart at these shows. Maybe this was an oversight as the old management team as well as the company’s PR Guru is no longer with the company.
-I see PayPal / BillMeLater, but doubt that they’d share a booth with Shopping.com.
-NexTag never advertises at conferences…no change there.
-Amazon Product Ads isn’t on the list, but I don’t think Amazon is ever allowed to ‘sell’ at these conferences due to tax issue…or something like that.
-Where’s Bing? Like Google, Bing usually promotes a couple products including Bing Cashback at these shows. Did Bing go through their $100M advertising campaign and that’s it?

Even for the established shopping engines, I’d think this show has to be at least break even. Total cost is under $20K ($5000 for a booth, $5000 for booth related things – it’s Chicago!, $3000 for travel/entertainment). All it takes is one new merchant spending $10K/month to make the trip worthwhile. And more importantly, it allows the shopping engines to meet face to face with dozens of their most important merchants. Surprised not to see Shopping.com, PriceGrabber, and Bing on the list.

Maybe they’ll just roam the show floor and cut way down on the cost of the event. Sometimes works.

Herman Leung Talks Ecommerce

March 30, 2010

One of the ecommerce Analysts all merchants should follow is Herman Leung. He recently spoke with The Wall Street Transcript (TSWT) about trends in ecommerce. Check out the teaser, in which he discusses GSI Commerce.

If you don’t know about Herman’s role at Deutsche Bank, here’s his intro in his own words:

Basically I cover e-commerce in general. I cover GSI Commerce in e-commerce outsourcing, Expedia in online travel as well as Blue Nile in the consumer e-commerce space. I also co-cover three other segments with Jeetil Patel, including all the major e-commerce names, like Amazon and eBay, as well as Internet media names, like Google and Yahoo, and the video games, including Electronic Arts and Activision.

SortPrice’s Facebook App & Other Shop Tabs

March 30, 2010

From the press release, Doron Simovitch, SortPrice.com co-founder and CEO says “We’re thrilled to have hit 1,000-store milestone in a little over a year. It indicates just how serious retailers are about expanding their e-commerce efforts to the world of social media.”

SortPrice offers its FaceBook App to all SortPrice merchants for free. The set up is quick and easy. It only takes a couple days to get up and running.

SortPrice is not the only company working on Facebook Store Apps.
ShopTab offers a paid service ($10-$20/mo).
Wishpot offers a Facebook Shop tab as well as Twitter integration. Mercent is working with Wishpot.
Big Commerce was featured in TechCrunch last week. The company’s SocialShop Facebook App is a nice little differentiation point for a small ecommerce platform.

So these are nice apps to have on your Facebook fan pages, but is anyone really driving business through their ‘shop tabs’? And is this really the best social shopping experience? Seems that Facebook itself should work directly with Amazon or Bing Cashback to provide a rich shopping experience for all consumers…and then take a % of the sale.

Undercover Boss – GSI Commerce’s Michael Rubin

March 29, 2010

In case you missed it, Michael Rubin, CEO of GSI Commerce, went undercover for last week’s episode of CBS’s breakout hit, Undercover Boss. Michael was actually undercover during the peak holiday shopping season last year. If you haven’t heard of or seen Undercover Boss, check out this NYTimes article.

Michael was only fired from one of his undercover jobs (packing)…well, maybe 1.5 of them as his truck loading skills weren’t that great. He needs to play a little Tetris.

Watch the complete episode @ cbs.com.

GSI Commerce is featuring the episode on its site and tied it in with career opportunities at the company as well as its member’s only site: Rue La La. Smart move.

Become Adds CFO – A Hint at What’s To Come?

March 27, 2010

Become announced yesterday that the company hired David Mullin as Chief Financial Officer (CFO).

From the release:

Mullin brings over 20 years of experience in high-tech leadership to the position at Become.com. Prior to joining Become.com Dave served as CFO of Borland International, SMART Modular, OnLink Technologies, Securify and NPTest. As CIO and CFO at SMART Modular, Inc., Dave helped the company grow from $150M to over $1B in revenue, take the company through successful IPO and completed a successful secondary equity offering.

So why hire a CFO? Well, you could go public. As CEO Michael Yang says:

We are thrilled to have Dave, who is a world class CFO, join us at a critical inflection point of our growth to help us scale our business globally and take the company public,” said CEO Michael Yang.

Ok, so this isn’t going to happen overnight, but Become has always performed well for merchants in the US for SingleFeed customers and the company has definitely jumped on the international opportunity, with sites in Japan, UK, Germany, Italy, and France. The company is also hiring, with 22 open positions.

Shopzilla’s 2009 Results

March 26, 2010

According to the 10-K, Shopzilla’s 2009 revenue was down aprx. 21% compared with 2008 and segment profit was down aprx. 50% over the same period.

Here are the details:
2007 Revenue: $219.9M, Segment Profit: $46.6M
2008 Revenue: $238.5M, Segment Profit: $62.5M
2009 Revenue: $173.9M, Segment Profit: $30.7M

From the filing:

Interactive Services’ results in 2009 compared with 2008 have been affected by the downturn in the economy, a less favorable sponsored-link contract with Google and the decision to competitively reposition Shopzilla for long-term growth. Reduced spending by customers resulted in lower volume and cost per click prices during the year. As a result of the repositioning, we are foregoing near-term margin with the underlying intention of engaging consumers more deeply in the product.

The increases in operating revenues in 2008 compared with 2007 reflected growth in revenues from Western European markets and Shopzilla’s effectiveness in increasing and monetizing user traffic. The downturn in the economy and its related impact on the retail marketplace in the fourth quarter of 2008 partially offset these increases in operating revenues.

The decrease in segment costs and expenses for 2009 compared with 2008 reflects efforts to align costs with the current business conditions.

In the fourth quarter of 2008, we recorded a goodwill impairment charge of $244 million for our Shopzilla business. The write-down was a function of both the changing competitive environment for online comparison shopping services and our subsequent decision to reposition Shopzilla within that marketplace for maximum long-term growth. The repositioning, which involves some meaningful changes in our existing business model, coupled with Shopzilla’s exposure to the slowing retail market negatively impacted our near-term operating outlook for the business.

Interactive Services is expected to generate segment profits of approximately $33 million to $35 million for the full-year of 2010.

In the course of performing our 2008 impairment review, we determined that the goodwill of our Shopzilla business was impaired. The impairment was a function of both the changing competitive environment for online comparison shopping services and our subsequent decision to reposition Shopzilla within that marketplace for maximum long-term growth. The goodwill impairment charge totaling $244 million was recorded in 2008.

Other notes:
-In 2009, Interactive Services was aprx. 11% of revenue for Scripps Network Interactive (SNI) ($173M/$1.541B).
-In 2009, the segment profit for Interactive Services of arpx. $30M was dwarfed by the aprx. $636M for its Lifestyle Media division.

(via PaidContent – story about uSwitch sale)

Mobile Comparison Shopping Apps

March 26, 2010

Many of the shopping engines have mobile versions or mobile shopping apps. Here’s a quick rundown:
-Shopping.com just launched its iPhone app, according to this article.
-Google Product Search recently launched their blue dots. And find out more about Google Shopper for Android here.
-TheFind has Shop Nearby.
-PriceGrabber has an iPhone App.
-NexTag has a mobile app for Android, iPhone, and Blackberry.

Oh, and NexTag seems to see some nice potential in the space and is hiring a Mobile Product Manager.

Solid Cactus Selling Price Just $3.5M?

March 26, 2010

Last year Solid Cactus, which owns the shopping engine feed service Feed Perfect, sold to Web.com. Thanks to Web.com’s 10-K filing, the price tag might have been just $3.5M.

Here’s the problem, though. According to Inc’s 2009 top 5000 company list, Solid Cactus was #3002, with revenue of $22.4M in 2008. You’d usually expect a company to sell for a multiple of revenue. A positive multiple of revenue, especially if the company is profitable.

So I’m thinking that $3.5M price tag has to be wrong, but Web.com Group’s 10-K filing states the following:

During the year ended December 31, 2009, we acquired substantially all the assets and select liabilities of Solid Cactus for approximately $3.5 million.

Under the terms of the asset purchase agreement, the Company paid cash consideration of approximately $3.5 million. In addition, the Company expects to pay Solid Cactus contingent consideration of up to an additional $500 thousand in April 2012. Although a reduction is not anticipated, this amount may be reduced by the amount of any unaccrued liabilities that existed at the acquisition date that the Company later discovers.

In conjunction with the acquisition of substantially all of the assets and select liabilities of Solid Cactus in April 2009, the Company granted stock awards to 125 new employees from Solid Cactus under the Company’s 2009 Inducement Award Plan (the “2009 Plan”), adopted in anticipation of the acquisition. The awards consisted of options to purchase an aggregate of 146,900 shares of the Company’s common stock. The options have a ten year term and an exercise price equal to the closing price of the Company’s common stock on the date of grant.

In other words, something just seems funky.
-Is the $22.8M figure in Inc.com a fabrication?
-Were there skeletons in the closet?
-Was there an equity component to the sale worth $40m?
-Was the company bleeding money and basically running out of cash? If they had 150 employees, we could guesstimate that expenses for just employees were at least $12M ($80k/employee all in is probably low, though). And if the $22.8M is inflated, then this could have just been a fire sale.
-I can’t add 1 + 1 and one of you investment bankers or VCs is going to teach me a lesson tomorrow…which I look forward to.


Changing of the Shopping Engine Guard – Purnendu Ojha Retires from NexTag

March 25, 2010

You could say it’s the end of an era. The old guard has left the building.

Dan Ciporin left Shopping.com a long time ago. And since then, Josh Silverman and Lorrie Norrington also moved on.
Kamran Pourzanjani left PriceGrabber a long time ago. And since then, Ron LaPierre also moved on.
Farhad Mohit, Chuck Davis, and John Phelps, have all left Shopzilla.
Rob Solomon left Yahoo! Shopping. And now that PriceGrabber has taken over control of Yahoo! Shopping, Greg Hintz is now heading up Listings at Yahoo!
And Purnendu Ojha has retired as President & CEO of NexTag. Not sure if co-founder, Rafael Ortiz has also moved on, but that would make sense. According to this article, Jeffrey Katz, former CEO of Orbitz, took over on March 1st.

There have been many other Presidents, CEOs and key executives involved with Shopping.com, PriceGrabber, Shopzilla, Yahoo! Shopping, and NexTag who have come and gone. But as I heard about Rob Solomon moving to Groupon and read about Purnendu retiring, I felt compelled to write something.

Hard to believe that I’m coming up on my 5 year anniversary of launching ComparisonEngines.

Google Product Search Mobile – Look for the Blue Dots

March 24, 2010

Google announced on March 11 that Blue Dots are coming. Blue dots indicate that a product is not just available locally, but actually in-stock at a local retailer. Best Buy, Sears, Williams-Sonoma, Pottery Barn, and West Elm are some of the initial partners for launch, but expect more retailers to participate soon.

As I said in a post yesterday about Milo, I think we’re finally at the point where local/mobile matters. 5 yrs ago, when I first started ComparisonEngines.com, I said mobile was not quite there yet. I said the same thing 4 yrs ago, 3yrs ago, 2yrs ago, and last year. As one former CEO of a comparison shopping engine emailed me this morning, “merchants and consumers just weren’t ready.” But now that retailers have to understand local inventory to manage their ‘buy online, pick up at the store’ programs and consumers have 24/7 access to iPhone apps, we’ve hit a tipping point.

Google’s effort is just getting started. More merchants will join the program, which will make their local/mobile product much more valuable. I’m not going to get into the he said, she said debate about which company is actually providing true real time inventory vs. guesstimates. That’s not the point of this post and not important right now, although it will become important towards the holiday shopping season.

So what is the point? Local/Mobile commerce is important and Google is going to be a major player. Consumers will want to know if a product is in stock nearby vs. wasting time running from store to store checking the shelves. This is a no-brainer service.

The trick now for Google is to get merchants to take advantage of this program. Right now the blue dots seemed anemic. In the official post by Google, a search for Wii Fit in New York, NY showed 13 nearby stores which had the Wii Fit Plus [Wii Game]. When I did the same search, on the first page of results, only the EA Sports Active [Wii Game] had a Blue Dot, but was available at 0 nearby stores. On the next page of results, there were a 2 products which had Blue Dots, both the Daisy Fuentes Pilates [Wii Game] and Jillian Micahels Fitness Ultimatum [Wii Game] were available at 10 nearby stores, all Best Buy stores. I did some other searches in San Francisco for Home and Garden type products and came up with only a couple products with Blue Dots and only a couple local options.

In other words, more Blue Dots are needed!

For merchants to participate in the program, they need to fill out this form. Google also recommends making sure your Google Local Business Center Listing is up to date and that you’re submitting a great Product Search Data Feed, which of course, SingleFeed or the other Google Merchant Center partners, can help you with.


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