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Archive for the 'Business: Strategy' Category



What happened to BeatThat?

BeatThat, the deal site I reviewed in August of 2008 has gone through some dramatic transformation. The home page which used to resemble a traditional price comparison site now simply shows shopping deals in a flat list and offers a daily prize for the best deal submission.

This is definitely a step down from the approach the team took originally and I can only wonder why they decided to abandon it. I sent an email via the contact form and will update this post if I hear anything back.

beatthat

Continue reading ‘What happened to BeatThat?’

Microsoft closes Jellyfish Smack Shopping

Jellyfish is a price comparission site that launched with an twist. [Almost] every product you bought via the Jellyfish links had cashback and they paid at least 50% of whatever Jellyfish itself was making (as the team claimed).

The idea was great but it wasn’t until late 2006 when the team really hit the jackpot with their daily reverse price auctions called Smack Shopping. The auctions attracted a lot of attention in the media and brought new audience to the site. It was a smart idea and a very creative way to promote the main business.

In October 2007 the startup was bought by Microsoft and the corporation used it to spice up their Live.com offering with Cash Back to better compete with Google Product Search. For about a year Smack Shopping was all that’s left of Jellyfish at the original domain. The auctions will cease to exist on February 16, 2009 according to the email Microsoft sent out to the members today.

Dear SmackShopping User,

Thank you for using SmackShopping and participating in the SmackShopping community over the past few years. Regrettably, we are closing down the site effective February 16, 2009. SmackShows, chats and other interactive SmackShopping services will be discontinued at this point. However, you will be able to redeem any coins you have accrued for 90 days (until May 15, 2009). At the end of 90 days the site will be brought down completely.

Please do not reply to this email, but if you have any questions, please contact us at questions@smackshopping.com.

Sincerely,
SmackShopping Team

Why are they doing it?

My guess is that it made little sense to keep the auctions without the money making part of the business attached to it. I think they are great at stirring the news and promoting other products but they are a terrible money maker by itself. Why do you think they chose to close the show? Please share your own opinion in the comments.

Also read: Smack Shopping Lands Bellyup In The Deadpool at TechCrunch

Circuit City Files For Bankruptcy

Earlier this month the chain announced it is closing 155 stores. Today the news came that Circuit City filed for bankruptcy protection. According to the press release the company has negotiated $1.1 billion in revolving credit to continue the operation and will honor returns, exchanges and gift cards as usual. This looks like a soft landing. We all know what happened when Sharper Image went under in February. :-(

I personally have little hope that Circuit City will survive the crisis. Holidays is usually when retailers see the bulk of their profits and the fact that Circuit City had to file for Chapter 11 at the start of the shopping season is troubling.

Source: Short Circuit City at Forbes.com

Microsoft launches Search Perks

Microsoft moves further down the road of buying its way into the search dominance (check out Live Search Cashback they launched back in May) with October 1 launch of a new loyalty points program - Search Perks.

The idea is very simple: search the web with Live Search and get a point for each search (up to 25 a day) which you can exchange for prizes come April 15, 2009. You currently get 500 points just for signing up - enough for a few music downloads or a deck of play cards.

There are a few more things you need to know:

  • The program is open to US residents only.
  • You will need to install a small internet browser add-on.
  • You can’t use it on any other browser but IE.

Encouraged by the free stuff, I initially considered giving Live Search a try, but the browser restriction killed it for me right there. IE is simply no match to Firefox and shuffling two browsers for different tasks is just too much.

Microsoft integrates Jellyfish into Live Search

Microsoft CashbackWhat does it take to dominate web search? One might think a search engine that produces quality results is all that matters, and this is exactly how Google stole the game from Yahoo, Netscape and others back in 90’s. What can you do though if your product has not been that great but you have a huge amount of cash burning your pockets? I am sure Bill Gates and other folks at Microsoft have been asking themselves this same question.

Buying your way into the dominance

Back in October 2007 Microsoft acquired a startup called JellyFish which sort of pioneered CPA model of doing business in the search world. As a way to get things going they offered a cash back incentive to the customers who bought products via their search engine. The idea is not exactly new and there is a whole class of sites called Rewards Programs that build their business around cash back. What JellyFish has done differently was that they promoted the search aspect of it. Many of the rewards sites back then didn’t have a convenient search function, and some required you to sign up for an account before you could do anything. JellyFish prominently displayed search on the front page and only required you to sign up before you make the purchase.

Yesterday Bill Gates announced at the Advance08 conference about a new project Microsoft is undertaking to get on Google. They call it Live Search cashback and the entire initiative essentially boils down to integrating into Live Search the JellyFish idea of CPA based product search. Consumers can get to the savings from the main Live Search page by clicking on the “Get Cashback” icon in the top right corner, or by going to Cashback.com, a domain Microsoft acquired for those unfamiliar with Live.com brand.

live search cashback screenshot

Good for consumers, bad for affiliates

The way all Rewards Programs work is by paying consumer a part of the affiliate commission they receive from the merchant when the consumer buys something using the program. Microsoft’s move into the niche essentially popularizes the cash back concept and makes it available to broader masses, which no question is good for consumers. Just as cash back credit cards, rewards programs is a great way to save while shopping.

On the other hand, the fact that Microsoft has become a “super affiliate” may not do well with businesses who rely on Live Search to bring in sale leads or do affiliate arbitrage. This is clearly a conflict of interest here and will cost Microsoft some of the adCenter customers.

As for the long term Google vs. Microsoft aspect of this move, it is clear Microsoft is desperate and is trying different things in an attempt to gain the search market niche. I will be curious to see how another acquisition they made recently plays out in that aspect.




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