eBay buys Shopping.com - Boon or Bust to Online Merchants?
by:
Scott Smigler
My 1st reaction: This could be big
The players:
eBay
Largest online auction site wherever
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 merchandiser to buy their desired product from. Shopping.com is one of the largest buying 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 several larger businesses post products for auction on eBay, and besides maintain “stores” inside
the eBay website wherever
shoppers can do purchases without bidding. eBay sellers must maintain a presence on eBay to participate. This means that the shopper ne'er
leaves eBay to do a purchase, and the sellers must coordinate a system to process orders through eBay.
Online Merchants
Internet stores, large and small. Stores travel from independent specialty stores like Surray Luggage, to immense mass-merchants like Amazon.com. Galore online merchants do not do business on eBay because it requires them to maintain a separate store, which has several stigmatization and logistic consequences.
What’s happening?
eBay is purchasing 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 based as an online auction wherever
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 another words, the merchandiser must have two stores: Their current store, and their eBay store.
Analysis
This could go one of two ways:
1) eBay could be purchasing Shopping.com to monetise its targeted traffic by causing eBay shoppers outside of EBay to the Shopping.com portal. In another words, they wish funnel traffic from eBay to Shopping.com, which wish then be funneled to the online merchants who presently
advertise on Shopping.com.
- Top to eBay: Accrued advertising revenues.
- Top to eBay Shoppers: Access to much products and accrued cost competition.
- Top to Online Merchants: Access to the moneymaking community of eBay shoppers.
- Downsides: eBay sellers wish face accrued competition.
2) eBay could be purchasing Shopping.com to just enhance its value to several eBay shoppers and eBay sellers. Shoppers would-be benefit from the product reviews and cost comparison technology that Shopping.com owns. Sellers would-be benefit from the accrued buying experience because demand for their products wish further increase.
- Top to eBay: Accrued client loyalty and listing fees.
- Top to Shoppers: Better version of the service they’re already comfortable with.
- Top to Online Merchants: None. Galore 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 efficient
access they’re looking for to reach the eBay community, and the value of advertising on Shopping.com would-be be diminished.
My Take
I can’t imagine that eBay would-be 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 wish maintain a version of Shopping.com’s current advertising network wherever
merchants acquire clicks from buyers (contrary to eBay’s model wherever
buyers ne'er
click to leave the eBay website).
If I’m right, eBay’s acquisition of Shopping.com wish be immense for advertisers. Advertisers wish be able to advertise on Shopping.com like they always have. The only difference wish be a massive inflow of quality traffic from eBay.
I am concerned because eBay’s press release only talks just about creating an accrued buying experience for current buyers, and mentions the new chance for current eBay sellers. The press release does not mention Shopping.com’s advertisers at all, which does me question eBay’s true motives. In another words, I may really 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 getting Shopping.com strictly
for its technology and product review network with the singular goal of enhancing eBay.com. If so, online merchants wish be missing out on a big opportunity.
Online merchants should watch this really closely.
About the Author
Scott Smigler has been an evangelist for a serious, ROI-based focus on the online channel since he based Exclusive Concepts (www.exclusiveconcepts.com) in 1997. Exclusive Concepts provides integrated online marketing strategies, Computer network 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.
