Comparison-Shopping for Business Financial Service

Transparent Financial Services (TransFS), operator of the only comparison shopping website for business financial services.

"TransFS is an online comparison shopping business for small business financial services. Think of us as an Priceline or Travelocity, but rather than helping people compare and purchase airplane tickets, we help small businesses compare and purchase financial services (such as payroll processing, credit card processing and business loans)."

The Purchase of Ciao by Microsoft

Today, news released that Microsoft buys European comparison shopping site, Ciao, for $486M.

Based in Munich, Germany, Ciao operates consumer review and comparison shopping portals in France, Germany, Italy, the Netherlands, Spain, Sweden and the U.K.

In June, Greenfield made a definitive agreement to be acquired by Quadrangle for $426 million, and must now pay the consortium a $5 million fee to terminate that agreement.

Microsoft plans that the Ciao business will report to Rajat Taneja, general manager for worldwide commercial search at Microsoft.

There are several reason makes Microsoft in this move.

The major motivation was compete with Google and Yahoo on search market share. Earlier this year, Microsoft pucrhased Jellyfish.com for cashback service. The acquisition of Ciao and its established user base may allow Microsoft to extend that approach to Europe.

Yahoo has already acquired a French comparison shopping service, Kelkoo, which now operates in ten European countries, and also drives Yahoo's own-brand comparison shopping service in France, Germany, Italy, Spain, the U.K. -- and Taiwan.

another meta-search shopbot

Another meta-search shopbot launched from Newark, DE today. ComparisonShop.com could simultaneously search the top ten shopbots with one search keyword. But it seems the site is merely a shell that it will lead you to the specific shopbot site without aggregating the data by itself.

As any college student knows, textbook has an inflated price if you buy from campus book store. For the same book, one can find a copy with a fraction of the price charged by campus store from the Web. Amazon third party sellers, eBay's half.com, all provide convenient search. But dedicated shopbot for books give one an edge in terms of aggregating all these prices from amazon, half.com and other online book stores. Specialized college textbook shopbots include campusbooks.com. Bookfinder.com provides a nice special page for searching textbook.

There are also shopbot for general book price comparison like addall.com.

College related websites like cheapscholar.org used comparison engine powered by campusbooks.com to help visitor find good price for textbooks: http://cheapscholar.org/2010/05/14/textbook-comparison-shopping-tool/

It seems like GetPrice.com.au is the most popular comparison-shopping website in Australia and New Zealand.

According to news report:

"MATTHEW Rigney has been appointed sales director at online comparison shopping site GetPrice.com.au. He cut his teeth on a range of projects at Fairfax Business Media and IDG magazines PC World and GamePro. GetPrice.com.au covers a variety of products categories including clothing and jewellery, computing, electronics, gifts and wine, health and beauty, home and garden, kids and toys, and sport and travel. The site has 750,000 unique visitors each month. Established in Sydney in 2005, Getprice is led by managing director Christopher Hitchen. It operates in Australia and New Zealand and under co-operative agreements in Germany and Israel."

Airline Tries to Nullify All Flights Booked Through 3rd Party Websites

Just read this from Techdirt:

"And people wonder why airlines have so much trouble staying in business? We were already confused enough by American Airlines' desire not to be listed on the sites where people search for airfare, and easyJet's plan to sue the sites that send it customers, but Irish-based airline Ryanair is taking this all to a new level. Beyond just being upset about those 3rd party sites (i.e., sites that send it business!), it's planning to cancel the flights for everyone who booked through one of those services (thanks to Sean for the link).

Yes, we understand that these airlines prefer people to purchase flights from the airlines directly, but it still seems bizarre to try to cut off a great promotional channel. People already know to go look at 3rd party sites for airfare, so actively working against having your flights promoted doesn't make much sense. Then actively pissing off a bunch of your customers who booked through those sites by canceling their flights is even more braindead, as you've just formed a huge group of customers who will complain about your airline and spread the word about how you canceled their legitimately purchased flight for no reason other than spite and a confusion over business models. When Ryanair started promoting how some of its seats might come with sexual gratification, I'd bet many passengers didn't realize it would end with them getting screwed."

It turned out this is true and the original report goes like this:

"TENS of thousands of intending Ryanair passengers could find their bookings cancelled over the coming days.

The airline yesterday said it would annul all bookings made through third party websites. In a move described as "totally unreasonable" by the Consumers' Association, Ryanair boss Michael O'Leary said the new policy would apply to anyone travelling after next Monday.

The hardline stance affects anyone who booked their Ryanair flights through websites like lastminute.com, v-tours, tui and Opodo.

About 1,000 people use these websites to book Ryanair flights every day, which means 20,000 passengers will be affected by the clampdown if bookings are made an average of 20 days in advance.

Ryanair will give refunds to all of the websites involved, Mr O'Leary said, but passing on those refunds to intending passengers would be a matter for the websites.

"We want to cause as much chaos for the [websites] as possible," he said.

"It is a totally unreasonable position to take," Consumers Association vice chairman Michael Kilcoyne said last night.

"The customer has made those bookings in good faith. If they have to now make new bookings at the last minute they could end up paying ten times as much.

"This is just Ryanair's way of extracting more money from customers, it seems the airline can do whatever they like and no-one can stop them."

A spokesman for Ryanair confirmed the airline had taken legal advice on the move, and was within its rights. Mr O'Leary also stressed that passengers were "getting stiffed" by these websites as their prices were invariably higher than those available on ryanair.com.

"The real issue here in our view is that Ryanair is concerned about losing out on the sale of other services such as travel insurance, hotels, car hire and to stop this they want to prevent consumers from using comparison websites," the Consumers Association countered in a statement.

Stance

The latest move represents Ryanair's fiercest stance yet in its desire to drive all its sales through Ryanair.com, and comes after years of legal battles between Ryanair and websites that incorporate the airline's booking engine into their own pages, in a process known as 'screen scraping'.

Outlining the airline's objection to screen-scraping earlier this week, Ryanair deputy chief executive Howard Millar said, "genuine passengers using Ryanair's website have been suffering long processing times and slower access because of the huge volume of information being downloaded from our website by these screenscrapers all over Europe".

"In all cases this scraping activity is unlawful and in breach of both Ryanair.com's copyright and terms of use," he added.

And it comes with a picture of the CEO of Ryanair, which explains quite a lot what happened to this company.

PriceSpider.com: A New Shopper Oriented Shopbot

The recently launched PriceSpider.com gives us a fresh perspective on the recent development of Comparison-Shopping Services.
Instead of using the data feeding and vendor registration, PriceSpider.com is crawling the Web to find best prices in real time.

According to the claim from its site, using innovative crawling technology, it searches hundreds of online retailers including Amazon, eBay, Buy.com, etc. One important feature of this shopbot is its social networking capabilities. Once you registered, you can create your shoppling list within the site and then share with your friends.


After a brief test of the site, I found it includes many popular features of existing shopbots. For example, it dynamically calculate the total cost of purchase once you provide your zip code. It also include price trends, reviews, vendor ratings as well as other product related information. These information are furnished in a user friendly way, e.g. the price trend for each product will pop up once you click a little image beside the product price. I have not test the social network shopping feature yet.

The most competitive feature of this new shopbot is its independence from vendor participation. The good thing is now vendors have outgrown the age of shopbot-blockade. To make it better, most popular shopbot nowadays demand money from vendor before they could appear in their price engine. Thus, the availability of pricespider.com with all its decent features makes it very competitive in the current comparison-shopping category.

So the most important question to wonder is the business model of pricespider. It is no doubt that pricespider will be able to get some commission once it refers a customer to a vendor, at least this is for Amazon. Meanwhile, currently the company is providing price related report to any interested individual or organizations. All of them are under the B2B category. They include competitive market analysis, visibility, price details, price activity, amazon.com and buy.com rank, MAP exception and rebate, etc. Hopefully these will generate enough revenue to sustain the growth of this new venture.

Finally, this shopbot is supported by Neudesic, a Microsoft National Systems Integrator and Gold Certified Partner. In other words, PriceSpider.com outsourced part of (or whole?) its technology support. This is a new phenomenon, which sounds like a pretty good living example of division of labor in this increasingly sophisticated ecommerce market.

Comparison-Shopping in Online Travel

Super Search: http://itasoftware.com/

US:

Consolidated
Expedia.com
Travelocity.com
Orbitz.com

Airfare comparison:

Kayak.com
Sidestep.com
Mobissimo.com

International airfare:

from US to China:

UK: http://www.travel.co.uk/

The challenge from

From group buy to social commerce

A friend of mine recently bought a piano. He did it with several other families. He represented them to contact the piano dealer and negotiated a bargain price because of the volume and then get it delivered. Buy together to increase the bargaining power is a classic strategy. Yet how to use it in an innovative way is interesting to see.

Back in late 90s, some startups offer such business model of buying together completely online. There are still sites like storemob to allow local shoppers find each other via message board and get a discount price by shopping together. However, how to do this completely online is still a challenge. Somehow it does not work well though it looks like a perfectly model to be implemented on the Web. Think about it, all this model needs is group sufficient number of people together, the Web provide an unprecedented opportunity for this, now people living in different places could buy together! It is easier to find enough people compared with one can only find via local resident or circle of friends. So why there are no good website for this?

There are several possibilities that prevent such site from popular.

First, it needs a higher threshold of critical mass. For an online retailer like Amazon.com or auction site like eBay.com, users use them frequently and immediately. More important, they can easily find what they want. However, for a team buy site, even one can list a whole catalog of every product, finding enough team members to buy the same product takes a long time. How long? It is hard to see. So the success rate of buying a product with discount price was largely offset by the risk of could not find enough buyers -- in other words, wasteful waiting.

Second, the savings has to be large to justify the efforts. People will take the effort to find others and get a discount price for a piano but few will do that for a $15 pencil sharpener. The popularity of eBay and Amazon comes from the small priced items, not pianos. Such selectivity on products prevent team buy sites from popular.

There are also other challenges like coordinating the delivery though online retailers could do that (drop-shipper).

A pure team buy service might not pull up but this concept could be blended into innovative Web shopping models.

Recently, the so-called social commerce became a trend. Sites like jellyfish.com are popular among certain online shopping groups. Jellyfish is a combination of comparison-shopping, cash back rebate, and reverse auction.

On top of all these, a feature make it distinct from ordinary shopping sites, is the social elements -- it allows shoppers to see each other and know each other. Shoppers could create their profile page within jellyfish. They could also see and chat with each other in reverse auction (the smack shopping). The reverse auction is running like a TV station, a schedule for product categories in auction was released for reference. during each day, products in different categories will be auctioned at different time slots.

This site is addictive. Some users claimed that they are there all the time except working and sleeping. Will this, together with Woot.com, be a new trend?

A new meta-search shopbot

Today (June 19, 2007), a new meta-search shopbot (up-stream shopbot) emerged. Discountmore.com could simultaneously search all major shopbots. The rational for a meta-search shopbot was: "...the only way to find out who really has the lowest price for individual products." according to Founder-Creator and CEO Bobby Kalili.

As in a paper I have written a couple of years before, the emergence of up-stream meta-search shopbot was inevitable. However, the real issue is more complicated than the pitch in the announcement. For example, is meta-search shopbot really the "last piece to the comparison shopping puzzle" as indicated by Kalili? Certainly not the last one.

For example, choice overload is the first problem a meta-search has to handle. How to balance the needs and present the same number of choices aggregated from different shopbot? This is more complex than individual shopbot handling choices from vendors. Now the choices come not only from vendors but also from auctions, and whatever courses one could get the product.

Another issue is still the coverage. Shopbots covered more or less the same set of online vendors via data-feeding by vendor themselves. A meta-shopbot only expand that set a little bit. There are still a lot of vendors (those do not involve in comparison-shopping at all) not being covered by shopbots.

The last one is the challenge about how to incorporate factors like coupons and promotions that are not covered by shopbots. They make big differences on price. however, unless we find a way to make the information structured, we won't be able to benefit from this in a large scale.

But still, this is a good move and nice search engine. I enjoy it.

Growth, Division of labor, and BPR

Almost finished "Direct from Dell," which illustrated the first 15 years of Dell, the Texas based computer manufacturer. The business acumen of the founder, Michael Dell and the timing (aseembling PC was a high margin emerging industry in early 80s) seems to be the top 2 critical factors leading to the growth and success of the company.

Another issue impressed me is how Dell handle the growth of the business. When a business growth from millions to billions and then to tens of billions within a short period of time, the company has to constantly re-structure to meet the growth need. The major theme seems to be the division of functions. For Dell, it first realized the importance of P&L (Profit and Loss Statement), and then how to apply it to different product categories. Then they found a manager who used to manage one product category would soon be outgrown by it. Thus, what they did is whenver the product category became too large, they will separate it into two or more product categories and have additional managers for each new category (it somehow reminds me of how eBay handle product categories). For each product category, P&L would be applied and subsequently, strategic decisions were made based on data collected.

This is very similar to most enteprirse did in 50s and 60s in the US. Presciely because both Dell and those companies in 50s and 60s faced the same seller's market. PC is a new and hot product, the demand will exceed the supply so this method works.

Anyway, though BPR became popular in 90s, Dell seemed not being affected by it, which makes sense for a company that focus on growth.

Business Process Reengineering revisited

I am reading Hammer & Champy's "Reengineering the Corporation" these days and found more historical contexts about BPR. My first contact with BPR was during my doctoral study from those academic papers. The missing part is why BPR was needed or why corporations were not optimizing their business process from the very beginning. It turns out they did but later they failed to adapt the process to changing environment.

Hammer and Champy's seminar HBR article ("Reengineering Work: Don't automate, Obliterate," which led the latter book) revealed this a little bit via a fictional example:

"... Many of our procedures were not designed at all, they just happened. The company founder one day recognized that he didn't have time to handle a chore, so he delegated it to Smith, smith improvised... business grew, Smith hired his entire clan to help him cope with the work volume. They all improvised...The hodge-podge of special cases and quick fixes was passed from one generation of workers to the next...institutionalized teh ad hoc and enshrined the temporary...Why do we send foreign accounts to the corner desk? Because 20 years ago, Mary spoke French and Mary had the corner desk. Today Mary is long gone, and we no longer do business in France, but we still send foreign accounts to the corner desk..."

Later in their book, the historical context was explained in more details. According to their view, the existing business processes in American corporations in 80s were originated from 50s and 60s, a time of mass production. At that time, the market was so good that customers will buy whatever produced thus the main goal for a corporation was producing as many products as possible to grab the market share. Thus a division of labor, hierarchical style corporation management structure was scalable and preferred (need 1000 products? Add 100 more workers, 5 more managers, and 2 more human resources staff).

However, when market power shifts from producer to consumer and the choice of products are increasingly abundant, which is the situation in 80s, such style and structure was no longer effective. Even from departmental perspective, the highest efficiency could be achieved, the overall efficiency of the corporation can not be guaranteed because there was no alignment between the departmental goal and corporation goal. A good example cited in the book is the purchasing department. A company may spend $100 internal cost to buy a $3 battery! Also, in terms of customer experience, it may took six days for IBM credit to finance a customer purchase though the actual process took only 90 minutes! Most of the time was wasted in the transition of documents among departments.

The reengineering thus called the efforts to focus on business process intead of steps in the process because if the process is wrong, even each step of the process is efficient, the whole would still be inefficient. By reengineering the process, critical elements like customers and suppliers could be brought into the focus and being organically linked with business processes within the enterprise. This is in contrast with the previous view that the internal process of an enterprise is separated from customers and suppliers for mere efficiency goal.

The negative influence of division of labor on current corporation behavior was especially illustrated in the book and argued by the authors to be the main cause of current problems of American corporations.

Woot and others

Till now, most etailers are still a stretched version of brick-and-mortar format. Basically, a product inventory, a store-front, and a check-out and billing system. Most innovations are incremental like the collaborative filtering by Amazon.com. Some are just using the aggregation advantage of the Web like eBay.com (super-size garage sale).

So is there anything revolutionary model? There are actually a few of them and with the proliferation of Web 2.0 technology, we should expect more.

Woot is one of them. It is a blog-based model where one product is promoted each day. The price for the product is low. A community is formed within Woot and one can discuss, comment, and share experience about the product. This new model aggregate the buying power of buyers and at the same time allow potential users to discuss and research on the product.

There is similar ecommerce model in China called "Tuan Gou (团购）" where registered buyers formed an online community and will aggregate their buying power for a product and purchase together with a bargain price. www.beambuy.com.cn is one such online community.

Now think about it, when such online community is popular and the product category is richer, do one still need go to traditional etailer for popular product? Probably what one really need is a good comparison-shopping agent or bargain finder to search a product from one or a few of the communities who are selling it or team-buying it.

Shopping.com

shopping.com started as a client side plug-in application that could help consumers comparing price for product.

Initially the startup has a shaking beginning. However, soon the co-founders realized that they have to find professional management teams. As a result, the CTO of citibank was invited as the CEO.

In 2003, it changed its name from Dealtime.com to Shopping.com, the latter is bought from Alta Vista for $1 million. In the same year, it merged with epinion.com and acquired resellerratings.com.

In 2005, shopping.com was acquired by eBay but it still operates independently like half.com and paypal.com.

Google Product Search

The comparison-shopping service provided by Google is called Google Product Search, a name changed on April 18, 2007 from its previous Froogle (a pun on Frugal) and Froogle was launched by Google in beta version back in December 12, 2002.

Google product search mainly focus on merchandises. For the time being, it does not offer comparison-shopping on travel, insurance, and other service categories.

Google gives vendors two ways to make their product being displayed on Google Product Search. Back in 2002, when Froogle was initially launched, according to Google spokeswoman Eileen Rodriguez , “There are two ways for merchants to be included in Froogle: their sites can be visited by the Google ‘bot,’ a software program that collects Web site information, or the merchants can give Froogle a direct data feed from their sites.”

An incomplete list of shopbots

Here is a list of useful shopbots and it will be updated from time to time:

-- General merchandise --

Google Product Search; Shopping.com; PriceGrabber.com; Shopzilla.com; Yahoo Shopping; MSN Shopping;

Books, CD, Movies: AddAll.com;
Magazines: magazinepricesearch.com;
Wine: wine-searcher.com;


-- Insurance --

Auto Insurance:

Health Insurance:

-- Travel --

Big Three for airfare, car rental and hotel as well as integrated package:

Orbitz.com; Expedia.com; Travelocity.com

More innovative shopbots that could scan other shopbots:

Kayak.com; sidestep.com;


-- Health --

Hurricane Katrina and Shopbots

In the aftermath of Hurricane Katrina (Monday, August 29, 2005), grass-root efforts to help scattered family members find each other seems have nothing to do with shopbots. But it turned out the process of those volunteers in setting up websites and sifting through web sources to find and aggregate people information is the exact process of what a shopbot does.

Initially, Red Cross, Craigslist, Yahoo and Google etc. established their own sites for people to search. All kinds of non-profit organizations including university are launching their own sites to help too. To increase the chance of finding each other, people post their search ads in some or all of those sites as well as well-known public forums. It soon turned out a central list is necessary to make this searching process more efficient.

On Friday, September 2, a group of tech-savvy volunteers launched www.katrinalist.net and they used "screen scraping" to capture relevant information from as many websites as they could found and apply the search algorithm. They also authored an open source data spec for organizing the missing person's information, the PeopleFinder Interchange Format.

This step resembled the initial stage of shopbots development, when automated shopbots like BargainFinder were designed and released to automatically search and aggregate product informations from the Web.

However, they soon realized the are still a lot of information can not be processed automatically because such information were not structured at all. So in the next step on Saturday morning, they recruited more volunteers to manually data-coding the unstructured message on various sites and sift through all the missing person posts. To facilitate the process, they built a wiki site to dole out chucks of data to be parsed. As a result, by the end of the day, thousands were volunteering, and in total some three thousand are though to be contributed. Salesforce.com contributed a more robust back end server because the makeshift database was overloaded.

By Monday evening, 50,000 entries had been processed. the number eventually reached 650,000. People could enter a name, a zip code, or an address into a search tool to get an instant list of names matching their query. Over one million such searched were conducted in the immediate aftermath of the hurricane.

The next step of katrinalist.net team efforts resembled what shopbots are currently doing to collect product data - they ask online vendors to contribute the data (data-feeding), which are combined with their own efforts of screen-scraping. Actually, the majority of the data being collected by shopbots were now via data-feeding.

One of the constant theme before more than 60% of the Web pages possess semantic like structure will always be how to retrieve data efficiently. The heroic efforts of katrinalist.net team gives us a perfect example of how people could collaborate and using existing technologies for such a technical challenge.

Reference: Katrinalist.net and the Peoplefinder Project

Comparison-Shopping in China

Here are a short list of shopbots in China:

Topgou.com:
Bjia.com
Tejiawang.com
3jpk.com
smarter.com.cn
...

To get some statistics about ecommerce in China:

China Internet Network Information Center
This is one of the earliest official organization systematically collecting data on ecommerce and other Internet information in China.

Chinese ecommerce association
This is the largest ecommerce organization consortium in China.

Hello World!

After several trials, I eventually decided to use this as my official reseach notes blog.