Tag Archives: Yahoo

Next Steps For Groupon As Andrew Mason Departs

It was just a matter of “when,” but Groupon has finally relieved Andrew Mason of his CEO duties after a quarter in which Groupon widely missed its mark because of its very high expenses and serious international issues, despite growing 30 percent year over year. Vice Chair Ted Leonsis and Executive Chair Eric Lefkofsky will run the company until they find a new CEO for Groupon or perhaps, even sell it.

Groupon, of course, has been written off in some circles as a big fad that ultimately dis-served its SMB merchants– something we have never totally accepted. But the ongoing possibilities for Groupon are wide ranging.

The company isn’t currently sustainable, with its heavy sales-laden staffing (whoever said local is scaleable?) But just as #2 Living Social’s investors saw that it was more prudent to inject $110 million to keep it going for its next stage, Groupon, which is at least three times larger, is better off staying juiced for now.

It has massive merchant and consumer email lists, and a wide selection of B2B, scheduling, processing, mobile and loyalty technologies – plus a growing travel business, as well as a lower margin, Groupon Goods business. If its investors wanted to stay the course, it could certainly continue its march into Amazon-like ecommerce territory.

The elevation of Leonsis and Lefkofsky to acting co-chiefs has a lot of possibilities in itself. How about a couple of interesting, not-so-crazy scenarios? One is that Lekofsky could finally merge Groupon with his newer investment in Belly, the Groupon-like, Chicago-based loyalty play that has just celebrated its one millionth member.

More enticingly, in terms of scale, Leonsis could influence an acquisition of Groupon by American Express, which he serves as a board member. Amex has just opened up an ecommerce store as part of Amex Sync and needs to feed it.

Or Groupon could be sold to Amazon, which is investing heavily in the local deals space; or it could even be sold to Google, which had once offered $5 Billion for it. Perhaps Marissa Mayer at Yahoo will make a run for it. She was a major instigator of the Groupon negotiations as a Google exec.

As for Mason, he may not have been the ideal CEO of the relatively soul-less, deals department store that is currently Groupon. But he’s funny, and authentic, and has been a great spokesman for the “What do we do this weekend that is wild and offbeat” lifestyle that catapulted Groupon –and the deals space — into local’s biggest phenomenon ever.

Sometimes, Mason, reminds us, business isn’t merely about business. It’s about helping people live their lives. This is especially true at the local level in which Groupon has been a shining star.

Andrew Mason after his groundbreaking BIA/Kelsey Marketplaces keynote in March 2008

WIth CEO’s Departure, Yahoo Ends its Fast Shift to New Commerce

That was quick. Yahoo’s radical shift to a new Commerce/ Marketplaces strategy – announced in mid April — has abruptly ended with the resignation of CEO and former PayPal head Scott Thompson, and SVP Sam Shrauger, his PayPal colleague who had been brought in last month to implement the plan.

As advocates of pursuing “non-advertising” revenues and closed loop marketplaces, I liked parts of the big data-heavy plan, although it was vague. For instance, unique content was being de-emphasized. I also liked that such a radical new vision would buy time with an impatient investor community. A couple of quarters, at least.

But Yahoo appears to be locked into several things that would have made it difficult to implement. It controls very few verticals on which to base a marketplaces plan. Autos, health care, real estate, travel, jobs, personals and shopping have been rented out to various companies, and the lengths of the contracts have not been disclosed.

It also wasn’t clear what Yahoo was going to do with Yahoo Merchant Solutions, which already provides many of these services. Nor was it clear who would sell the data efforts – a complex and strategic sale.

Is Groupon Better Off with Yahoo, Google (Or on its own?)

Groupon has been a phenomenal success in the deal a day space, and we envision continued success for the segment’s pioneer. But what shape will that success take?

At our Marketplaces conference last March in San Diego, CEO Andrew Mason told us that he felt that Groupon wasn’t so much a deals company as a City Guide. The clever writing, daily emails and targeted demographic all made it seem like “media” to him; something that will have a higher circulation in his home town of Chicago than The Chicago Tribune by year-end.

There is certainly a media aspect with Groupon. In addition to its two or three daily deals, it has also started selling national banner ads, and done well with them.

But frankly, we don’t see Groupon’s future so much as a “city guide.” To us, it is more of a next generation small business leads generator: helping small businesses at the local level, and franchises at the national level (see The Gap).

It is a role that that the company has been vigorously pursuing. Recently, it has been focused on building a personalized platform for deals out of its new Silicon Valley office. It has also been developing a slate of small business services that allow SMBs to trigger (and manage) their own deals – and presumably, manage their own lists — not unlike Perry Evans’ work in developing Closely.

Is all this worth $3 billion to Yahoo? Or even more to Google (per today’s report in AllthingsD)? Would these efforts win synergies from those companies, or would they be stifled? And with 180+ deal a day companies now following in Groupon’s footsteps – plus branded efforts from Yelp, AOL, Angie’s List and others — how unique is Groupon’s longterm value proposition? And what will be the impact of deal aggregation by companies like Yahoo, The Deal Map and others?

These are the questions their bankers will be asking as they look to acquire Groupon. And they are the questions we’ll be getting at on our Deal a Day/Pure Pay for Performance Superforum at ILM 2010, which includes:
Sean Smyth, VP of Business Development, Groupon
Jim Sampey, Executive VP, Cox Target Media
Prashant Nedungadi, CEO, Nimble Commerce
Martin Tobias, CEO,Tippr
Mike Rutz, VP, Angie’s List
Mike Coleman, VP, DealChicken.com/Gannett Phoenix
Jennifer Dulski, CEO, The Deal Map
Landy Ung, CEO, 8Coupons.com
Thomas Cornelius, CEO, Adility

Zillow Earns First Profits; Ups Rascoff to CEO

Zillow, after five years and $87 million raised, says it is now in the black for the first time, after focusing more on revenues.

The online real estate company, which competes with brokerage sites, Trulia and others, also announced that CFO Spencer Rascoff has been appointed CEO, replacing Expedia Founder Rich Barton, who becomes Executive Chairman and focuses on a heavy portfolio of vertical investments, such as Avvo.com, the legal site.

Rascoff and Barton , in a phone call yesterday, tell us that the company is currently driving revenue on Zillow.com, Yahoo Real Estate and Mobile from five key revenue streams, including its Mortgage Marketplace, display, national advertising, local advertising and mobile advertising. The latter channel has become especially critical and now accounts for 20 percent of usage on weekends, says Barton. “Real estate is the ultimate local shopping experience,” suggests Rascoff.

The mortgage marketplace, especially, has become one of the company’s fastest growing areas as well, with 314,000 mortgages leads being processed on the site, up six fold from August 2009 , when it was introduced. This compares in the balance to four million homes being listed, and 150,000 rental listings. Twenty—five percent of home shoppers are now looking at home rentals as a point of comparison, says Rascoff.

BigTent Focuses on Leveraging its One Million (Mostly Women) Users

Groups have been using the Web since the mid-1980s for a wide range of activities, such as scheduling, discussions, photo sharing, referrals etc. Groups have been a special strength for Yahoo.

BigTent, a group software company based in San Francisco, has recently been vying with Yahoo for the same market, focusing largely on women. It now has over one million members, who reside in more than 50 percent of U.S. ZIP codes. The question for BigTent and Yahoo, in the age of Facebook and other social media, is what will keep users on a dedicated platform? And what will be their own revenue model?

BigTent CEO and Founder Donna Novitsky says the answer is easy: Facebook is great, but BigTent’s groups, which have sizes ranging in size from 10 to “hundreds of thousands,” tend to require a lot of customization and special features. BigTent groups now range from simple mailing lists to groups with discussions, events, memberships, payments, classifieds, reviews, and more.

“Many BigTent groups are local and use the technology to schedule events every week and track participation, in addition to hosting lively discussions 24×7 online, by email and on mobile devices,” says Novitsky. “As groups have grown, they need subgroups to maintain intimacy, so we provide that as well, with all the functionality of the top level groups. It’s all about continuing to scale and deliver value to more local clubs, schools, parenting groups, neighborhoods, sports teams and scout troops,” Novitsky adds.

From a business perspective, one of the core challenges for BigTent, a free service, is how to leverage its aggregated user base. The answer: advertising with national brands who want to target women, such as Clorox and Old Navy; and various marketplace opportunities.

Novitsky notes that one marketplaces effort the company is doing is a partnership with RedBeacon, which helps members find local service providers like babysitters, plumbers and painters. “Much of the discussion in our local groups is seeking referrals and recommendations from other group members so this is win-win-win for the members, partners and BigTent,” says Novitsky.

Deal referrals are another big marketplaces opportunity for Big Tent. The majority of deal a day subscribers, after all, are educated women. “Our audience loves deals,” confirms Novitisky. “But the deals space has gone crazy with too many different providers sending too many emails — it’s deal overload. So BigTent is working with several of the deals providers such as Groupon and The DealMap to bring together the best deals and sort them for our audience. This is respectful of our members’ time and attention, and delivers better results for everyone.”

Yahoo’s Lem Lloyd on Gannett/Yahoo Deal

Gannett’s local newspapers and TV stations will begin selling Yahoo inventory, considerably boosting the size of Yahoo’s local sales efforts. The deal, which involves 81 newspaper organizations and seven of its 23 TV stations– is similar to the efforts of Yahoo’s 800 member Newspaper Consortium.

But Gannett, notably, is staying separate from the Consortium. In part, Gannett was concerned that contract was newspaper specific. (even though Media General and Freedom Interactive, which both have added TV stations, seem to work within it). The timing for originally joining the Consortium also wasn’t good, as Gannett was still backing CareerBuilder while the consortium was launched with Yahoo Hot Jobs.

Yahoo VP of Channel Sales Lem Lloyd has been working on projects with Gannett for over a decade, starting when he was an executive at Knight Ridder and they co-owned verticals ranging from CareerBuilder to Cars.com. “When the corporate entity puts a focus on something, they have a great ability to have local properties execute.strong sales and execution,” he says.

Lloyd adds that both entities are committing major resources to the new effort. “Gannett is in an especially strong position to help due to its portfolio of smaller media markets, which typically fall from DMAs 75-200,” says Lloyd. “It is a great proving ground for selling more sophisticated advertising to local businesses.”

What isn’t involved is Gannett Local, a separate venture designed to sell search solutions to SMBs. Tribune also recently launched a local search arm. Lloyd notes that the Yahoo deal won’t be at all search oriented.

Zillow Extends Ties with Yahoo Real Estate; Will Power Listings

Zillow announced today that it will power Yahoo’s “for sale” listings, in much the same way that Cars.com powers Yahoo’s new and used cars listings. Zillow typically carries four million + listings. The announcement spearheads a slew of online real estate announcements prior to next week’s Inman Real Estate Connect conference (which I am attending),

The enhanced Yahoo and Zillow tie doesn’t achieve the “buy a slot” status of other Yahoo vertical outsourcing — it would have been too expensive for any of the major real estate portals — but it also goes well beyond the current Yahoo-Zillow relationship,which basically consists of Yahoo’s syndication of Z-estimate home valuations. That has been in place since 2006.

Under the new deal, the two companies bring together the real estate websites that have the second (Zillow) and third (Yahoo) highest number of unique visitors, per ComScore. The deal, which is symbiotic for both companies, shows how things have changed from five or six years ago, when Yahoo itself was seen as a major threat to use open Internet listings to dominate real estate advertising. Now, Yahoo is basically content leveraging its sales relationships with national brokerages, while Zillow focuses on the content and local accounts. Real Estate remains highly profitable for Yahoo.

While Zillow listings won’t go up on Yahoo until later this year, the two companies are immediately coordinating their sales efforts. Zillow’s “Premier Agent” program will be extended to Yahoo Real Estate. Current Zillow advertisers will be offered the chance to extend their relationship to Yahoo. Additionally, Zillow’s local “Showcase Ads” and “Featured Listings” will automatically be extended to Yahoo, making it easier for both sites to reach a quorum of users. For Sale By Owner advertising will also appear on both sites.One thing that Yahoo doesn’t get access to in the deal is Zillow’s burgeoning display business.