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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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NOVEMBER 25, 2003
These Sites Are a Shopper's Dream [Page 2 of 2] INFO COLLECTION. The shopping-comparison companies also have a lively business supplying their technology to other Web companies. Search engine AskJeeves uses PriceGrabber to power its comparison listings. PriceGrabber also sells its services to America Online (a unit of Time-Warner, TWX ) and PC Magazine, both of which would prefer to buy the expertise rather than build it. Aside from collecting revenues from Web merchants for paid placements and click-through referrals, the shopping portals also sell data that tracks shopper behavior and thus could provide insights into how to better target likely buyers. Since they get a lot of traffic, these sites collect plenty of aggregate data about what kinds of products people are interested in and what their likelihood is to click through to certain kinds of stores, says Ross Rubin, senior analyst at Web marketing consultancy eMarketer. Until now, such capabilities have largely remained off the radar of bigger players such as Yahoo and AOL. But now they're rushing to catch up. In September and October, Yahoo launched a series of upgrades that copied many of the capabilities of the shopping-comparison sites for visitors who browse through the 50 million products on the portal. "We believe that Web search and shopping go hand in hand," says Rob Solomon, manager of Yahoo Shopping. GOOGLE'S THREAT. In October, Yahoo launched an even bigger initiative: scanning the entire Internet for product listings, though without returning pricing data. That looks like a broadside at Google's online product search engine, Froogle. Launched last December, Froogle doesn't offer side-by-side comparisons, but it does allow shoppers to arrange product listings by price. It pulls in hundreds of thousands of unique visitors each month and is growing smartly -- and selling ads. "We don't usually monetize beta products, but we do monetize Froogle," says Marissa Mayer, director of consumer products at Google. While Google contends that Froogle isn't a shopping-comparison site but rather a search engine to help customers find products, analysts wonder if the search leader has bigger plans. "If Google starts taking the online shopping-comparison part of its business more seriously, Shopping.com and the others in that group could have a big problem," says Nielsen's Leathern. The sector's leaders say they aren't afraid of Google. They argue that its basic search technology, called PageRank, might prove difficult to adapt to online shopping. "With PageRank, the thesis is you can always rank the most relevant results at the top and the least relevant results at the bottom. In shopping, relevancy is a function of the user. Is it the brand first? Is it the lowest price? There's no PageRank that will solve what's in your head vs. what's in my head," says Tolia. Froogle's Mayer says its product does what it's intended to do very well, which is find products and not necessarily supply comparison features. And Froogle can perform the most important relevancy calculation, namely ranking product offerings by price. COMING TOGETHER? Still, unlike Froogle, most shopping-comparison sites offer product reviews or merchant ratings to give customers more qualitative information about both the items they're shopping for and the stores they're buying them from. Shopping.com even owns ePinions.com, a popular forum where users post reviews of products, places, and services. Tolia pairs these reviews with product listings and claims the sell-through rates on ePinion-rated product are tops in the industry and dramatically outstrip sell-throughs at Shopping.com where no ePinion rating is offered. Regardless of whether the pure plays have enough ammunition to fight off the big guys, Leathern and others expect consolidation in the coming year, as larger e-commerce companies such as Amazon (AMZN ), eBay (EBAY ), or Yahoo float offers to buy Shopping.com and its ilk. No matter what happens, expect the competition to heat up considerably. Everyone wants a piece of a good shopping spree.
 By Alex Salkever
BW MALL
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