Shopping.com IPO Is A Search IPO...
March 25, 2004
How? Besides my own bias that all of ecommerce is driven by search, see this excerpt from a story on Shopping.com's $400 million IPO:
Shopping.com's biggest customer, responsible for 38% of its revenue, is Google. Shopping.com's agreement with Google is expected to continue, although the market is highly competitive. The Yahoo! (Nasdaq:YHOO) e-commerce site has launched a new price comparison service, and Google is planning to launch its own price comparison service, Froogle.
And, ahem, let's not forget Amazon...
Here's the Shopping.com filing....(BTW, they filed in 2000 but never got out...)
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Here's a link to the free government site to download the documents.
http://edgar.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001108482&owner=include
Amazon needs to seriously improve its search results. Maybe the a9 thing is addressing this?
That's pretty much A9 in a nutshell. Note how many letters occur in "mazon.com".
When is shopping coming out?
Are they going to do something similar to google.com where regular people can bid?
I wonder what the effect of Frugal and A9 will have on paid-inclusion shopping sites like Shopping.com, and if there will be a residual impact for Google and Amazon.
I assume Shopping.com gets 38% of its revenue from Google through an AdSense program that places ‘Additional Resource’ links on each results page. If so, then the real revenue is not coming from Google but from businesses that use the Google Adwords program to place their ads on third party (i.e. Shopping.com) websites.
If Frugal is successful in gaining a significant portion of shopping related search traffic directly, whose revenue will be impacted? First, Shopping.com's revenue should go down as fewer people use their service (due to Froogle competition) and thus fewer people buying items or clicking on ‘Additional Resource’ links. Second, I think Froogle will lower Google’s revenue (or at least the Adwords program margins), as fewer people click on Adwords and instead just follow the Froogle link. Fewer Adwords clicks mean less revenue for Google. Third, Amazon because many of its Associate Program affiliates rely on Google Adwords for marketing. These marketing efforts may not pay-off in the face of new Froogle competition.
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