Few details in eBay's Shopping.com plans

EBay's planned acquisition of comparison shopping site Shopping.com is a good move in theory, but its ultimate success will depend on how effectively and to what extent the two organizations are integrated, an issue eBay isn't addressing in much detail just yet.

Although each organization could gain by integrating services from the other, so far eBay is only committing to one area of integration: Once the deal is finalized, some eBay listings will begin appearing on Shopping.com.

This, according to eBay, will be good for its merchants because it will give them access to a new sales channel, and it will be good for Shopping.com users because the variety and number of products in the comparison shopping index will grow with eBay listings.

However, even on this point, eBay is keeping mum on which type of eBay listings will get featured on Shopping.com and what will be the terms for eBay merchants that want to do this.

"The vision we have is to give our sellers who are evolving in that direction access to that new channel for selling and for possibly including eBay listings within the product selection already available on Shopping.com. How we're going to do that... we haven't announced," said Hani Durzy, an eBay spokesman, in an interview. "Nothing like that has been decided."

More details can be expected to emerge after the acquisition closes, which is expected to happen at some point in the third quarter, subject to the approval of regulators and Shopping.com shareholders, Durzy said.

For example, eBay isn't saying anything about how its PayPal online payment service might fit into the Shopping.com integration. "We haven't discussed PayPal as part of this at all," Durzy said. With 70 million PayPal accounts, it's safe to imagine that PayPal is already being used by Shopping.com merchants and buyers, he said.

Without speculating on how or even if PayPal will be part of the integration, Durzy added: "We expect that the natural benefits PayPal brings to both buyers and sellers on and off eBay will continue and grow as the two platforms work together."

No word either on whether comparison shopping capabilities from Shopping.com will be offered at eBay, Durzy said.

Another open question is Shopping.com's Epinions unit, which has 2 million product reviews generated by about a community of about 400,000 users. It would be logical to assume that those evaluations will become available on eBay as well, but eBay is noncommittal about that also, at this point.

"We have not detailed any plans to integrate Epinions into eBay listings," Durzy said in a subsequent e-mail message, adding that there are parallels between the way in which Shopping.com users generate Epinions reviews and the way eBay users post evaluations of buyers and sellers.

Shopping.com didn't return calls seeking comment.

The deal with Shopping.com and its potential benefits comes a bit late to some proactive eBay merchants who have already listed their products on the comparison shopping search engine. That is the case with Gotham City Online, a shoes and accessories seller on eBay.

"It's not going to give us anything new, but the deal is probably pretty good for eBay," said Jonathan Garriss, who is Gotham City's chief executive officer as well as the executive director of the Professional eBay Sellers Alliance (PESA). PESA is a group of about 600 large eBay sellers that collectively generate more than 70 million eBay transactions and US$1 billion in eBay gross merchandise volume annually.

Still, the acquisition, which was announced Wednesday, opens the door for eBay to make it easier for more of its merchants to list their products on Shopping.com, said Patti Freeman Evans, a Jupiter Research analyst. "This provides an opportunity to many more sellers who would either not understand that's an option or not be able to put it together themselves," she said.

The combination of eBay and Shopping.com is certainly significant in the e-commerce space. In April, eBay was the fifth most visited site by U.S. users overall, and the most visited among online retailers, with 63.8 million unique visitors, according to comScore Networks. Meanwhile, Shopping.com was the 20th most visited site overall and the most visited comparison shopping site, with 22.6 million unique visitors in April, according to comScore.

"Shopping.com's consumer-friendly comparison shopping functions are compelling additions to eBay's portfolio," said James Lamberti, vice president of comScore Networks, in a commentary e-mailed to reporters. "This acquisition brings together two of the largest properties in an increasingly competitive e-commerce landscape."

Despite its popularity, eBay still has room to grow in terms of traffic, and this acquisition should help in that area, said Jupiter's Freeman Evans. "Even though eBay has an enormous amount of customers coming on a regular basis to the site, there are people who don't visit eBay. To able to effectively reach them on a regular basis through other concentrated channels is a good thing," she said.

EBay, a titan in the consumer-to-consumer and business-to-consumer e-commerce space, is an online marketplace in which sellers market their products via either fixed-price listings or auctions. Shopping.com, on the other hand, is a free comparison shopping search engine that lets consumers compare the prices and features of millions of products from thousands of merchants. It makes money by charging merchants for inclusion and placement in its search index.

Considering that the Shopping.com business model is different from eBay's, PESA's Garriss trusts eBay executives will be wise enough to integrate the comparison shopping business properly into the eBay fold. "It is a new type of marketplace for eBay. I'm believing eBay will rely on some of the knowledge Shopping.com has developed to execute properly" the integration, Garriss said.

EBay should try to replicate the approach it has taken toward integration of PayPal into its overall service, said Jupiter's Freeman Evans. "Letting Shopping.com operate as an independent entity will be a good thing while bringing the general benefits of being part of eBay," she said. "EBay has done a good job of nurturing PayPal and using PayPal services within their organization to build both businesses, but also allowing PayPal to grow externally. EBay has a pretty good track record with this kind of ownership."

Some financial analysts also praised the planned acquisition.

"We believe the acquisition is consistent with the company's strategy to expand its presence into the broader e-commerce market," wrote a team of research analysts from J.P. Morgan Securities. In addition to expanding the sales channel for existing eBay merchants, the acquisition may also attract new sellers to its platform, they wrote.

Meanwhile, David Edwards, a research analyst with American Technology Research Inc., praised the deal for two reasons. It increases eBay's exposure to ads, and specifically to paid search results, and it may help eBay retain large merchants that are unhappy about the company's fees and other issues, he said. "We believe that a well-executed integration of the eBay and Shopping.com platforms provides an avenue for merchants to extend their reach by selling products via Shopping.com from their own websites," he wrote.

EBay is offering to buy all outstanding shares of Shopping.com stock at US$21 per share in cash, or about US$620 million. EBay had annual revenue of US$3.3 billion and net income of US$778.2 million in 2004, while Shopping.com had US$99 million in revenue and net income of US$12.2 million in the same year.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Cool Tech

Bang and Olufsen Beosound Stage - Dolby Atmos Soundbar

Learn more >

Toys for Boys

Nakamichi Delta 100 3-Way Hi Fi Speaker System

Learn more >

Sony WF-1000XM3 Wireless Noise Cancelling Headphones

Learn more >

ASUS ROG, ACRONYM partner for Special Edition Zephyrus G14

Learn more >

Family Friendly

Mario Kart Live: Home Circuit for Nintendo Switch

Learn more >

Philips Sonicare Diamond Clean 9000 Toothbrush

Learn more >

Stocking Stuffer

Teac 7 inch Swivel Screen Portable DVD Player

Learn more >

SunnyBunny Snowflakes 20 LED Solar Powered Fairy String

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?