Wednesday, May 31, 2006

A Partnership To Shape The Future...POWER of Y!/Ebay.

Recently the announcement outlining the Yahoo/Ebay partnership, (which can be found here) is really a MUST, as the future of the web starts to cement itself.

When TV was first introduced as a viable communication tool in the early 1950's, there were VERY few channels to choose from. If you had a TV in 1956, there were 5 broadcaster's (channels) to choose from.

As a viewer your choice was severely limited....it was NEW TECHNOLOGY. It's power of how it would alter, shape, and change our lives was just being understood.

It took many years, but the advent of cable companies, the expansion of channels -- gave viewers more options to choose from - in terms of programming.

We now have anywhere from a minimum of 100 channels to choose from, all the way up to 400 (for some viewers) -- and it keeps growing.....

TV grew slowly compared to the internet.

TV started with limited choice - and over a 50 year period the choices given to a consumer are tremendous.

Compare this to the growth of the Web.
The staggering growth of websites, computers, cable lines (high speed) - new technologies, and most of all, ADAPTATION OF THE WEB AS PART OF AMERICANS DAILY LIVES....has led to incredible growth.

Everything I've written up to this point is pretty understood, and basic, and serves as a launching pad for what you will read here on "You ain't gonna learn what you don't want to know." (in depth analysis)

The Yahoo/Ebay Partnership (alliance) changed the dynamic of the internet.

Why?

Firstly, the incredible power of DATA.

The sheer amount of information flowing between these 2 MAJOR WEB sites is incredible.

1 - Yahoo! - the largest online portal of information - and the most amount of unique page views per user in the US.

2 - EBAY! - the largest, most robust MARKETPLACE in the world, handling online transactions -- and traffic inside a "buy/sell" environment.

To understand the size of information going across these 2 monster companies, let me use an example.

A potential aspect, and VERY LIKELY underpinning of this new found relationship -- can bear fruit in the following example.

1) - Joe Smith goes to EBAY and types in "Weber Grill" - because, he wants to purchase a outdoor barbeque. (he types the keyword "Weber Grill" into the EBAY box)

2) - He surfs and finds NOTHING that he wants to purchase, or even bid on.

3) - 2 days later he is on Yahoo! Sports, reading about the Dallas Cowboys - and gets, HUGE DISCOUNT and coupon advertisements from "WEBER GRILL." This is based on the fact (that as part of Yahoo's Fusion Product) - they can use Behavioral Targeting to serve ad's to consumers, who display certain behaviors inside their portal - or with partner websites. (see Ebay) Joe Smith gets's this offer from "Weber Grill", while on Y! Sports, because the DATA that flowed from a "purchase intent profile" in EBAY's marketplace -- came to directly influence that ADVERTISING on Yahoo's portal, or display advertising.

The richest data online (as determined by the marketplace) is what is called "Search Terms" -- keywords and terms purchased from Search Engines to drive results for Advertisers. When a consumer is looking to make a purchase of a item, these are also called - "purchase intent profiles." These purchase identifiers are amongst the RICHEST DATA KNOWN TO DIRECT MARKETERS, EVER. (one of the reasons that Google has a $112 Billion Market Cap)


This is critically important to understand for a variety of reasons.

a) EBAY is one of the largest buyers of keywords (search terms) from both Google and Yahoo.

b) Yahoo will be able to show advertising inside it's portal to consumers who have displayed specific behaviors using "Purchase Intent Profiles" from the largest online marketplace, EBAY. The results could be staggering as Advertisers flock to Yahoo and are willing to pay a tremendous amount of money...to put up their ad's - ONLY TO CONSUMERS WHO HAVE DISPLAYED SPECIFIC BEHAVIOR - utilizing "purchase intent profiles."

c) Yahoo's Response Rates Skyrocket. EBAY is transacting more -- as Yahoo is driving consumers BACK to EBAY who DID NOT purchase during a session -- Yahoo will see (on average) that consumer nearly 300 page views a month (be able to show 300 advertisments).....

Incredible.

But here is the most compelling data for Yahoo, and has been overlooked. (and, if you have read this far, you are gonna get the kernel of information that no one else has talked about, or written about to my knowledge, and correct me if I'm wrong please)

Here Goes:)

EBAY buys a tremendous amount of traffic/keywords from Google.

Google and Yahoo are competitors.

EBAY can share their DATA about Google's performance -- with Yahoo, (remember EBAY is buying the Google Traffic from their keyword buys) by:

1 - keyword
2 - latent conversion
3 - value of keyword based on "click to sales.."
4 - direct information on keyword pricing for EBAY's millions of search terms.
5 - a deeper underatanding of Googles performance - which they have NEVER HAD.
6 - A WAY TO COOKIE GOOGLE'S SEARCH ENGINE USERS AND SHOW THEM SPECIFIC ADVERTISMENTS, WHEN THEY ARE ON YAHOO'S PORTAL TO GET THEM TO USE YAHOO'S SEARCH ENGINE.... -- and potentially use the Google searches and "purchase intent profiles" - driven by Google -- to change the ADVERTISING shown on Yahoo to consumers.

Yahoo and EBAY just forged a partnership that can change the dynamics of how the WEB evolves.

The questions is, do the leaders have the vision?

And, can they execute?

I believe they can -- but, tell Terry Semel he can call me if he needs some guidance, and a VISION - as to, "what can be...."

This has the potential (partnership) if positioned correctly, to, early in the chess game -- take out Google's ROOK, and a FEW PAWNS.

Google's already got a few of Yahoo's and EBAY's chess pieces.

We are still in 1965 in the TV world -- but we are light years ahead in the development and evolution of this incredible medium.

I love it.

2 Comments:

Blogger pretzelgreg said...

Andy--why would Google lie still while Ebay exploits their business relationship by "sharing" info/metrics with Yahoo? I could see the cost of Ebays keywords on google skyrocketing or possibly something even more non-competitive ;-)

5:09 PM  
Blogger Andy said...

Pretzel.

thanks for the comments, good points....BUT.

To my knowledge Goog has stopped no company from byuing its traffic. (I could be wrong)

So, if Microsoft buys Amazon -- (and Amazon buys a tremendous amoutn og Goog keywords/traffic) - will Goog not sell traffic to MSN?

Its a slippery slope - and the Goog calls themselves "a marketplace of keywords" -- so, you see there is no precendence for them "cutting off" any retailers who spend money with them.

5:28 PM  

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