My first reaction: This could be big
The players:
eBay
Largest online auction site where buyers bid to buy products. Arguably the most well-known e-commerce site with over 100 million registered users. Billions in sales are transacted here worldwide.
Shopping.com
Shopping portal that helps shoppers find the least-expensive merchant to buy their desired product from. Shopping.com is one of the largest shopping portals on the Internet. They achieved success by implementing a model that allows online merchants to acquire targeted clicks from shoppers by paying a per-click fee.
eBay Sellers
Individuals, small businesses, and some larger businesses post products for auction on eBay, and also maintain “stores” within the eBay website where shoppers can make purchases without bidding. eBay sellers must maintain a presence on eBay to participate. This means that the shopper never leaves eBay to make a purchase, and the sellers must coordinate a system to process orders through eBay.
Online Merchants
Internet stores, large and small. Stores ranging from independent specialty stores like Surray Luggage, to huge mass-merchants like Amazon.com. Many online merchants do not do business on eBay because it requires them to maintain a separate store, which has both branding and logistical consequences.
What’s happening?
eBay is buying Shopping.com for $620 million. Shopping.com’s key assets include its product comparison technology, large network of product reviewers (formally EPinions.com), brand awareness, and of course, its advertisers.
Background
eBay was originally founded as an online auction where individuals offered used (and sometimes new) products to the highest bidder. Over time, EBay has introduced services to allow merchants to sell directly to buyers through eBay stores that bypass the bidding process. Since everything is done through eBay, merchants are required to have a presence on eBay that is separate from their online store. In other words, the merchant must have two stores: Their current store, and their eBay store.
Analysis
This could go one of two ways:
1) eBay could be buying Shopping.com to monetize its targeted traffic by sending eBay shoppers outside of EBay to the Shopping.com portal. In other words, they will funnel traffic from eBay to Shopping.com, which will then be funneled to the online merchants who currently advertise on Shopping.com.
- Upside to eBay: Increased advertising revenues.
- Upside to eBay Shoppers: Access to more products and increased price competition.
- Upside to Online Merchants: Access to the lucrative community of eBay shoppers.
- Downsides: eBay sellers will face increased competition.
2) eBay could be buying Shopping.com to simply enhance its value to both eBay shoppers and eBay sellers. Shoppers would benefit from the product reviews and price comparison technology that Shopping.com owns. Sellers would benefit from the enhanced shopping experience because demand for their products will further increase.
- Upside to eBay: Increased customer loyalty and listing fees.
- Upside to Shoppers: Better version of the service they’re already comfortable with.
- Upside to Online Merchants: None. Many online merchants have been reluctant to establish an eBay presence because they’ll have to maintain two separate stores.
- Downsides: Online merchants won’t have the streamlined access they’re looking for to reach the eBay community, and the value of advertising on Shopping.com would be diminished.
My Take
I can’t imagine that eBay would spend $620 million on Shopping.com only to disband its network of online merchants who pay a lot of money to be featured there. Accordingly, my prediction is that eBay will maintain a version of Shopping.com’s current advertising network where merchants acquire clicks from buyers (contrary to eBay’s model where buyers never click to leave the eBay website).
If I’m right, eBay’s acquisition of Shopping.com will be huge for advertisers. Advertisers will be able to advertise on Shopping.com like they always have. The only difference will be a massive influx of quality traffic from eBay.
I am concerned because eBay’s press release only talks about creating an enhanced shopping experience for current buyers, and mentions the new opportunity for current eBay sellers. The press release does not mention Shopping.com’s advertisers at all, which makes me question eBay’s true motives. In other words, I may very well be wrong.
Bottom line: Watch this closely. eBay’s acquisition could be a tremendous boon to online advertisers, opening up a fertile new market for online marketing. Or, eBay could be acquiring Shopping.com purely for its technology and product review network with the singular goal of enhancing eBay.com. If so, online merchants will be missing out on a big opportunity.
Online merchants should watch this very closely.
GA-002
About the Author
Scott Smigler has been an evangelist for a serious, ROI-based focus on the online channel since he founded Exclusive Concepts in 1997. Exclusive Concepts provides integrated online marketing strategies, Internet brand consulting, search engine marketing campaigns and results-oriented web sites for hundreds of clients that range in size from small ecommerce firms to public companies. |
|
 |
Gift Shopping Tips For Tight Budget
Have you seen the prices of greeting cards lately? It is hideous! Once you purchase the card and gift-wrap, your overall cost can easily increase by $10 to $15. If you are on a tight budget, this can be difficult as you spend more on the fluff and...
...Read More
Cell Phone Shopping, Buy Mobile Phones
It’s Time To Go Cell Phone Shopping! Find Out How To Buy Mobile Phones And Why Online Shopping Is A Good Option.
The best way to go cell phone shopping is to do it online. Log on, find a quality cell phone search engine and start looking....
...Read More
Win a Super Shopping Spree and Never Have to Buy a Gift Again
(ARA) - The holiday season ushers in a time of joy and a spirit of giving -- as well as frequent frustration at finding the perfect gifts for the special people in your life. But as the gifts add up, so do the bills. Wouldn’t it be nice to do all...
...Read More
How to get the best shopping deals over the Internet?
How to get the best shopping deals over the Internet? Online shopping has taken over the Internet by storm where convenience and simplicity has replaced, or at least complimented, more conventional shopping in specialty stores or malls. Although...
...Read More
5 Ways To Super Saving Internet Shopping
5 ways to super savings when shopping on the internet. Save at least 200 dollars for 1000 dollars of shopping– that is 20% of the total money spent. With common sense and little prudence you can save hundreds of dollars on your holiday shopping...
...Read More
|
