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- Upside to eBay Shoppers: Access to more products and increased price competition.
- Upside to Online Merchants: Access to lucrative community of eBay shoppers.
- Downsides: eBay sellers will face increased competition.
2) eBay could be buying Shopping.com to simply enhance its value to both eBay shoppers and eBay sellers. Shoppers would benefit from product reviews and price comparison technology that Shopping.com owns. Sellers would benefit from enhanced shopping experience because demand for their products will further increase.
- Upside to eBay: Increased customer loyalty and listing fees.
- Upside to Shoppers: Better version of service they’re already comfortable with.
- Upside to Online Merchants: None. Many 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 streamlined access they’re looking for to reach eBay community, and value of advertising on Shopping.com would be diminished.
I can’t imagine that eBay would 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 will maintain a version of Shopping.com’s current advertising network where merchants acquire clicks from buyers (contrary to eBay’s model where buyers never click to leave eBay website).
If I’m right, eBay’s acquisition of Shopping.com will be huge for advertisers. Advertisers will be able to advertise on Shopping.com like they always have. The only difference will be a massive influx of quality traffic from eBay.
I am concerned because eBay’s press release only talks about creating an enhanced shopping experience for current buyers, and mentions new opportunity for current eBay sellers. The press release does not mention Shopping.com’s advertisers at all, which makes me question eBay’s true motives. In other words, I may very 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 acquiring Shopping.com purely for its technology and product review network with singular goal of enhancing eBay.com. If so, online merchants will be missing out on a big opportunity.
Online merchants should watch this very closely.
Scott Smigler has been an evangelist for a serious, ROI-based focus on the online channel since he founded Exclusive Concepts in 1997. Exclusive Concepts provides integrated online marketing strategies, Internet 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.