June 06, 2005
Few details in eBay's Shopping.com plans
By Juan Carlos PerezEBay Inc.'s planned acquisition of comparison shopping site Shopping.com Inc. is a good move in theory, but its ultimate success will depend on how effectively and to what extent the two organizations are integrated, an issue eBay isn't addressing in much detail just yet. Although each organization could gain by integrating services from the other, so far eBay is only committing to one area of integration: Once the deal is finalized, some eBay listings will begin appearing on Shopping.com.
This, according to eBay, will be good for its merchants because it will give them access to a new sales channel, and it will be good for Shopping.com users because the variety and number of products in the comparison shopping index will grow with eBay listings.
However, even on this point, eBay is keeping mum on which type of eBay listings will get featured on Shopping.com and what will be the terms for eBay merchants that want to do this.
"The vision we have is to give our sellers who are evolving in that direction access to that new channel for selling and for possibly including eBay listings within the product selection already available on Shopping.com. How we're going to do that... we haven't announced," said Hani Durzy, an eBay spokesman, in an interview. "Nothing like that has been decided."
More details can be expected to emerge after the acquisition closes, which is expected to happen at some point in the third quarter, subject to the approval of regulators and Shopping.com shareholders, Durzy said.
For example, eBay isn't saying anything about how its PayPal online payment service might fit into the Shopping.com integration. "We haven't discussed PayPal as part of this at all," Durzy said. With 70 million PayPal accounts, it's safe to imagine that PayPal is already being used by Shopping.com merchants and buyers, he said.
Without speculating on how or even if PayPal will be part of the integration, Durzy added: "We expect that the natural benefits PayPal brings to both buyers and sellers on and off eBay will continue and grow as the two platforms work together."
No word either on whether comparison shopping capabilities from Shopping.com will be offered at eBay, Durzy said.
Another open question is Shopping.com's Epinions unit, which has 2 million product reviews generated by about a community of about 400,000 users. It would be logical to assume that those evaluations will become available on eBay as well, but the San Jose, California-based eBay is noncommittal about that also, at this point.
"We have not detailed any plans to integrate Epinions into eBay listings," Durzy said in a subsequent e-mail message, adding that there are parallels between the way in which Shopping.com users generate Epinions reviews and the way eBay users post evaluations of buyers and sellers.
Shopping.com, based in Brisbane, California, didn't return calls seeking comment.
The deal with Shopping.com and its potential benefits comes a bit late to some proactive eBay merchants who have already listed their products on the comparison shopping search engine. That is the case with Gotham City Online, a shoes and accessories seller on eBay.
"It's not going to give us anything new, but the deal is probably pretty good for eBay," said Jonathan Garriss, who is Gotham City's chief executive officer as well as the executive director of the Professional eBay Sellers Alliance (PESA). PESA is a group of about 600 large eBay sellers that collectively generate more than 70 million eBay transactions and US$1 billion in eBay gross merchandise volume annually.
Still, the acquisition, which was announced Wednesday, opens the door for eBay to make it easier for more of its merchants to list their products on Shopping.com, said Patti Freeman Evans, a Jupiter Research analyst. "This provides an opportunity to many more sellers who would either not understand that's an option or not be able to put it together themselves," she said.
The combination of eBay and Shopping.com is certainly significant in the e-commerce space. In April, eBay was the fifth most visited site by U.S. users overall, and the most visited among online retailers, with 63.8 million unique visitors, according to comScore Networks Inc. Meanwhile, Shopping.com was the 20th most visited site overall and the most visited comparison shopping site, with 22.6 million unique visitors in April, according to comScore.
"Shopping.com's consumer-friendly comparison shopping functions are compelling additions to eBay's portfolio," said James Lamberti, vice president of comScore Networks, in a commentary e-mailed to reporters. "This acquisition brings together two of the largest properties in an increasingly competitive e-commerce landscape."
Despite its popularity, eBay still has room to grow in terms of traffic, and this acquisition should help in that area, said Jupiter's Freeman Evans. "Even though eBay has an enormous amount of customers coming on a regular basis to the site, there are people who don't visit eBay. To able to effectively reach them on a regular basis through other concentrated channels is a good thing," she said.
EBay, a titan in the consumer-to-consumer and business-to-consumer e-commerce space, is an online marketplace in which sellers market their products via either fixed-price listings or auctions. Shopping.com, on the other hand, is a free comparison shopping search engine that lets consumers compare the prices and features of millions of products from thousands of merchants. It makes money by charging merchants for inclusion and placement in its search index.
Considering that the Shopping.com business model is different from eBay's, PESA's Garriss trusts eBay executives will be wise enough to integrate the comparison shopping business properly into the eBay fold. "It is a new type of marketplace for eBay. I'm believing eBay will rely on some of the knowledge Shopping.com has developed to execute properly" the integration, Garriss said.
EBay should try to replicate the approach it has taken toward integration of PayPal into its overall service, said Jupiter's Freeman Evans. "Letting Shopping.com operate as an independent entity will be a good thing while bringing the general benefits of being part of eBay," she said. "EBay has done a good job of nurturing PayPal and using PayPal services within their organization to build both businesses, but also allowing PayPal to grow externally. EBay has a pretty good track record with this kind of ownership."
Some financial analysts also praised the planned acquisition.
"We believe the acquisition is consistent with the company's strategy to expand its presence into the broader e-commerce market," wrote a team of research analysts from J.P. Morgan Securities Inc. In addition to expanding the sales channel for existing eBay merchants, the acquisition may also attract new sellers to its platform, they wrote.
Meanwhile, David Edwards, a research analyst with American Technology Research Inc., praised the deal for two reasons. It increases eBay's exposure to ads, and specifically to paid search results, and it may help eBay retain large merchants that are unhappy about the company's fees and other issues, he said. "We believe that a well-executed integration of the eBay and Shopping.com platforms provides an avenue for merchants to extend their reach by selling products via Shopping.com from their own websites," he wrote.
EBay is offering to buy all outstanding shares of Shopping.com stock at $21 per share in cash, or about $620 million. EBay had annual revenue of $3.3 billion and net income of $778.2 million in 2004, while Shopping.com had $99 million in revenue and net income of $12.2 million in the same year.
Posted by Chad Dickerson at 04:19 PM
Skype, VOIP handsets on show at Computex
By Martyn WilliamsEast Asian hardware makers seeking to turn the popularity of Internet telephony services and Skype Technologies SA's Skype VOIP (voice over Internet Protocol) application into sales were plentiful at Computex, which took place last week in Taipei. A multitude of handsets designed to replace the headsets often at present were on display at the show. Models ranged from advanced phones with Wi-Fi and GSM (Global System for Mobile Communications) support through SIP (session initiation protocol) -compatible handsets that work with most IP telephony services to basic consumer models designed for use with Skype.
Among the most feature-rich handsets on display was the PWG-500 dual-mode Wi-Fi SIP and GSM phone from Taipei-based G-Tek Electronics Corp.
The handset supports 802.11b networks and allows the user to define up to 10 favorite networks or access points for quicker sign-on. Dual signal strength indicators on the display show both Wi-Fi and GSM signal. The handset will automatically route calls via Wi-Fi when within range of a useable signal and switch to GSM when no Internet access is available. Other features include Bluetooth support so that the phone can be used as a Wi-Fi modem.
"People are very interested in this product," said Giuseppe Tosolini, assistant to the president at G-Tek. "Business men are looking for a product like this and asking when will it be in the market."
G-Tek hopes to begin mass production in September and is also working on a second model with a larger LCD and Web browsing capability.
The phone had also been attracting interest from carriers, he said.
"Carriers are so very, very aggressive because they know they are going to lose market share," he said.
Stand-alone SIP handsets that look just like regular cell phones were being shown by Wistron NeWeb Corp. The candybar SRP-81 and clamshell SKPD-1 have a feature set similar to cell phones, including polyphonic ring tones, local address book and call waiting. They also support regular POP/SMTP e-mail and, in a nod to the corporate market, WEP (Wired Equivalent Privacy) encryption.
Security is also a function being talked up by Senao International Co. Ltd., which has built WEP 64- and 128-bit encryption and WPA (Wi-Fi Protected Access) into its handset, said Pauline Tseng, an account manager at the Taoyuan, Taiwan, company's wireless communications products business group.
A number of companies were also showing handsets designed to be used with the popular Skype Internet telephony system. Most of these are less sophisticated than the SIP models and use a cable rather than wireless technology to connect to the PC. They are basically remodelled headsets but with a couple of advantages: a familiar form factor that people are already used to and a keypad that means users can place calls, answer the phone and cut the call without touching the PC keyboard.
Good Way Technology Co. Ltd. was showing two models, one with an LCD display and the other without. The company hopes to begin mass production of the handsets this month or next month, said Roger Lin, a sales representative at the Taipei company. The handsets are compatible with Skype and can be used with Internet voice-chat services such as those offered by Yahoo and MSN, he said.
Cost concerns have kept the company from adding a wireless connection to the handsets but that is under consideration for future models.
Another company showing a wired Skype handset was EPL Technology Ltd. The company plans to begin production of a wired handset in mid-June and a Bluetooth-equipped wireless model with headset and hands-free profiles in late June, said Kent Chan, manager of business development at the Hong Kong company.
Posted by Chad Dickerson at 04:18 PM
Microsoft plans mobile e-mail push upgrade
By John BlauFor its Windows Mobile 5.0 handset software announced in May, Microsoft Corp. plans later this year to offer an upgrade that will provide push e-mail technology and improved security management, the company announced Monday at its Tech Ed conference in Orlando. The Messaging and Security Feature Pack for Windows Mobile 5.0 is software based on wireless features that will be added to Exchange Server 2003 in Service Pack 2 (SP2).
"One of the key components of the Messaging and Security Feature Pack is to enhance the Outlook mobile experience by pushing e-mail from Exchange to handhelds equipped with Windows 5.0 using our new Direct Push Technology," said Jason Langridge, U.K. mobility manager at Microsoft. "Another key component is to provide the ability to protect managed devices directly through Exchange."
Outlook information, including e-mail, calendar and contacts, will be pushed through a direct connection between Exchange and a Windows Mobile device, providing users with immediate access to Outlook information, without the need for a third-party network relay service, according to Langridge. "Many enterprise users, in particular, are concerned about having their data sent through a third-party source," he said.
Users will also be able to avoid the cost of using a third-party relay service with the new Microsoft technology, Langridge added.
As for security, via Exchange Server 2003 with SP2, IT administrators will be able to remotely manage and enforce select corporate IT policy over the air, Microsoft said. For example, administrators will be able to mandate a personal identification number password to be set for every device, and set recommended and mandatory policies, as well as set exception lists for users to be exempt from these policies.
In addition, the technology will give administrators the ability to remove all information from a device, over the air, and reset it to its original state, allowing them to better manage sensitive information on a misplaced Windows Mobile device, according to Microsoft.
The Messaging and Security Feature Pack will be available in October, according to Langridge.
Posted by Chad Dickerson at 04:18 PM
June 02, 2005
EBay buys Shopping.com for $620 million
By James NiccolaiEBay Inc. has continued its acquisition spree by agreeing to buy comparison shopping site Shopping.com Inc. for about US$620 million in cash, the companies said Wednesday. The move should benefit eBay's sellers by giving them access to a new sales channel and a new set of buyers, while Shopping.com will be improved by the addition of eBay's listings on its site, the companies said.
EBay is much larger than Shopping.com: It had annual revenue of $3.3 billion in 2004, and net income of $778.2 million. In the same year, Shopping.com made $99 million in revenue and net income of $12.2 million.
But Shopping.com has been adding customers at a faster clip, according to research company comScore Media Metrix. It attracted 22.6 million unique visitors in April, up 15 percent from the same month a year earlier, compared with 63.8 million for eBay, an increase of 6 percent over the same period.
EBay will pay $21 per share for all the outstanding shares of Shopping.com, the companies said. The deal will reduce eBay's earnings per share for 2005 on the basis of generally accepted accounting principles, due to stock compensation charges and other factors.
The acquisition is expected to close in the third quarter, subject to the approval of regulators and Shopping.com shareholders.
The move continues something of a buying spree for eBay, which has been looking to grow its business and expand into new areas.
In December it agreed to buy property listings site Rent.com Inc. for $415 million, and a month before that it bought Holland's top classifieds site, Marktplaats.nl, for $290 million. Earlier last year it acquired a 25-percent stake in Craigslist of San Francisco, beefing up its classifieds business.
Posted by Chad Dickerson at 03:57 PM
New .xxx domain will be reserved for porn
By John BlauNumerous groups, including several outspoken U.S. politicians, have been demanding for some time a separate Internet domain for pornography in a move to prevent sexually explicit content from landing on the screens of young Net users. The Internet Corporation for Assigned Names and Numbers (ICANN) took a big step Wednesday to meet that demand by approving a plan for pornographic Web sites to use new addresses that end with ".xxx." ICANN, the nonprofit organization that oversees technical matters related to the Internet, said it will begin negotiations with ICM Registry Inc. to resolve commercial and technical issues associated with operating the .xxx TLD (Top Level Domain).
The decision in favor of establishing a virtual red-light district for providers of pornographic content and their customers represents a U-turn for ICANN, which rejected ICM's first application for the .xxx TLD in November 2000. Reasons for the objection are published in a document available on ICANN's Web site: (http://www.icann.org/tlds/report/report-iiib1c-09nov00.htm).
ICANN, in Marina del Rey, California, was not immediately available for comment.
ICM argues on its Web site (http://www.icmregistry.com) that .xxx Web addresses will shield children from pornographic content more effectively by allowing families and others using filtering software to block access to sites ending with this suffix.
The International Foundation for Online Responsibility (IFOR) will sponsor .xxx., according to ICM Registry. The foundation is a Canadian nonprofit entity that will serve as the policy-making authority for the .xxx TLD. It is -- and will remain -- totally independent from ICM Registry, which is primarily funded by registration activities, the Internet registry company said.
The non-profit foundation will promote online child safety and campaign against child pornography. "This foundation will provide assistance through various online support organizations and the sponsoring of technology tools and education programs for parents," ICM Registry states on its Web site. "The online adult entertainment industry wants to create an identifiable space with which its members can elect to associate themselves and wherein they can responsibly self-organize and create guidelines to promote credible self-regulation."
ICM Registry, which is wholly owned by Chestermere Investments Ltd., will operate the registry. The company, according to its Web site, "is a financially stable and completely independent entity with no affiliation, current or historic, with the adult-entertainment industry."
In 2000, U.S. senator Joe Lieberman joined several other U.S. politicians demanding ICANN to approve the .xxx TLD. In a paper available on the Web (http://www.copacommission.org/meetings/hearing1/lieberman.test.pdf), Lieberman wrote: "I think (the .xxx TLD) has a lot of merit, for rather than constricting the Net's open architecture, it would capitalize on it to effectively shield children from pornography and it would do so without encroaching on the rights of adults to have access to protected speech."
Posted by Chad Dickerson at 03:56 PM
Yahoo and Cisco combine their antispam technologies
By Scarlet PruittYahoo Inc. and Cisco Systems Inc. are combining their antispam technologies to create a new e-mail authentication system, they announced this week. The system, called DomainKeys Identified Mail (DKIM), will draw on Yahoo's DomainKeys authentication technology and Cisco's Internet Identified Mail. The technology will be offered to other industry players on a royalty-free basis in an effort to reduce the amount of spam spread across the Internet, the companies said.
E-mail authentication is important because spammers and online criminals often used forged e-mail addresses to send unwanted messages.
Yahoo's DomainKeys uses public-key cryptography to authenticate the sender of an e-mail at the domain level. The sending system generates a signature and inserts it in the e-mail header while the receiving system verifies the signature using a public key published in the Domain Name System.
Cisco's authentication technology also uses cryptography but associates the signature with the message itself. In its system, the sending server signs the message and inserts the signature and pubic key used to create it in a new and additional header. The receiving system then verifies that the public key used to sign the message is authorized for use by the sending e-mail address.
DomainKeys Identified Mail will combine aspects of both of these authentication systems. It will use the Domain Name System in the same manner as DomainKeys, to verify signatures using the published public key, but will also draw on Cisco's header signing technology to ensure consistency as messages are sent through the system.
It wasn't immediately clear how the new technology would fit in with the companies' prior work on authentication systems, however. Yahoo has already implemented DomainKeys into its Yahoo Mail service and offers the technology royalty-free to other industry players.
The Sunnyvale, California, Internet company said that it receives more than 350 million messages a day signed by DomainKeys, but did not say whether it plans to replace the technology once DKIM becomes available.
As for Cisco, it released an open source implementation of Identified Internet Mail late last year.
Posted by Chad Dickerson at 03:54 PM
Cingular to begin offering GoodLink email service
By Stephen LawsonGood Technology Inc., a competitor to mobile e-mail vendor Research In Motion Ltd. (RIM), unveiled its first major deal with a carrier on Tuesday when it announced that Cingular Wireless LLC will sell its service on two devices. Cingular, the largest U.S. mobile operator, will offer the GoodLink service for the PalmOne Inc. Treo 650 and the Siemens SX66 Pocket PC, a Windows Mobile Pocket PC device from Siemens AG. GoodLink continuously synchronizes a user's Microsoft Corp. Outlook e-mail and other data, allowing enterprise employees to access their e-mail, calendars, contacts, notes and lists of tasks from anywhere in Cingular's coverage area, said Good Chief Executive Officer Danny Shader.
Competitors have begun encroaching on RIM's successful service, which primarily runs on the Waterloo, Ontario, company's own BlackBerry devices. Nextel Communications Inc. last week introduced a Java-based mobile e-mail and PIM (personal information manager) service that uses Visto Corp.'s ConstantSync technology. Good and Visto have the advantage of being less tied to a particular set of devices, said Bob Egan, an analyst at Mobile Competency, in Providence, Rhode Island.
GoodLink offers enterprises a choice of devices and operating systems, over-the-air provisioning that lowers the cost of ownership, and a better user interface and easier device upgrades than RIM's product, Shader said. The Palm and Siemens devices are intended to be just the first of many from Cingular that will offer GoodLink, he said. Shader sees Santa Clara, California-based Good as a "catalyst" that is helping vendors such as Palm, Siemens, Dell Inc. and Hewlett-Packard Co. draw the attention of wireless carriers with their mobile devices.
"Cingular and the device makers will be the biggest revenue makers in this business," Shader said.
Users are looking for mobile e-mail push services and looking beyond RIM's proprietary system, but its current rivals -- namely Good, Visto and Seven Networks Inc. -- won't come out the winners in the end except through acquisition by a larger player, according to Mobile Competency's Egan. Microsoft Corp. and IBM Corp. are working on setting up their own systems as extensions to Outlook and to Lotus Notes, he said.
"In the long run, the native installs win," Egan said.
One possible misstep in Good's deal with Cingular is pricing, he added. One-time startup charges, in particular, will alienate small and medium-sized businesses, in Egan's view.
Whereas Nextel is promoting its Mobile Email Enhanced service as expanding BlackBerry-like capabilities to less expensive devices (the carrier offers the BlackBerry 7520 for US$149 with a service contract), Cingular is aiming upscale with GoodLink. Cingular's price for a Treo 650 is $399 with a two-year contract, and for the Siemens device is $499, according to Cingular spokesman John Kampfe. Both devices have an integrated QWERTY keypad.
Enterprises can buy the GoodLink service with unlimited data for a monthly fee of $44.99 per month on top of a voice calling plan. They must also buy a $1,500 one-year Starter Pak and a one-time $99 license for each user. The Starter Pak includes a year of IT support by Good and support from Cingular for the life of the contract.
Posted by Chad Dickerson at 03:53 PM
Congressional aides predict telecom reform soon
By Grant GrossThe U.S. Congress should pass some kind of telecommunications reform by late 2006, four congressional staffers focused on telecom issues predicted Wednesday, but the group couldn't agree on what kind of reform is needed. The four, part of a panel discussion on telecom reform at a Broadband Policy Summit in Washington, D.C., discussed a range of options for telecom reform, including exempting VOIP (voice over Internet Protocol) from most traditional telecom regulations, creating a new regulatory category for advanced Internet communications and reforming how telecom carriers pay each other for network interconnection.
In an industry where video, voice and data are increasingly sent over the same network, Congress needs to focus on whether these "silos" of regulation are needed, said Mike O'Rielly, senior legislative assistant to Senator John Sununu, a New Hampshire Republican. Sununu in 2004 pushed a bill that would exempt VOIP from most state and national telecom regulations, but the bill did not pass through Congress.
"I'm an eternal optimist," O'Rielly said of the possibility of telecom reform happening soon. "I think this can be done, if not this year, early next year."
Earl Comstock, president and chief executive officer of competitive telecom carrier trade group CompTel/ALTS, said policy makers had good reasons to regulate some telecom providers differently from others, based partly on which providers enjoyed near monopolies. "The silos are a convenient creation for some people who want to change the [telecom] statute," Comstock said.
Others on the panel predicted meaningful telecom reform could take much longer than O'Rielly's goal. Howard Symons, a telecom lawyer with Mintz, Levin, Cohn, Ferris, Glovsky & Popeo PC, said initial discussions that led to the 1996 Telecommunications Act started about 20 years earlier.
Speakers on the telecom reform panel disagreed with each other on what needs to be done, with O'Rielly pushing for limiting regulation for VOIP and a Democratic aide suggesting VOIP should face some minimal regulations. VOIP should be required to provide enhanced 911 emergency dialing service, as well as to comply with law enforcement wiretapping requests, said Amy Levine, a legislative aide to Representative Rick Boucher, a Virginia Democrat. Telephone customers, whether they use traditional wireline service or VOIP, expect services such as 911, she said.
O'Rielly questioned how Congress or the U.S. Federal Communications (FCC) could require VOIP services to comply with wiretapping laws, when Internet data service has not faced those regulations. "How do you reconcile that?" he said.
One of the big issues facing Congress and the FCC is regulatory parity between cable-modem broadband service and DSL (Digital Subscriber Line) offered by incumbent telecom carriers, panelists agreed. Through the '96 Telecom Act and later FCC rulings, large incumbent telecom carriers have been required to share their networks with competing ISPs (Internet service providers), while cable providers have been free from those regulations.
Incumbent carriers, including Verizon Communications Inc., have pushed for Congress to eliminate these network-sharing rules, saying they give telephone carriers little incentive to improve their networks and offer customers faster broadband. During the summit, Verizon Senior Vice President Kathryn Brown called for an end to network-sharing rules and to local cable franchising restrictions that complicate her company's efforts to provide video services in multiple cities.
"We should not lock the future of broadband in the regulatory shackles of the past," Brown said.
Beyond anything Congress can do, a group of ISPs has sued for access to cable networks, asking courts to overturn the FCC's March 2002 ruling allowing cable providers to close off their networks to competitors. That case -- Brand X vs. FCC -- was argued before the U.S. Supreme Court in March, and a ruling is expected shortly.
"Regardless of what happens in the Brand X case, someone will come to Congress asking for a fix," Levine said.
Competitors of the large telecom incumbents fear that moves toward regulatory parity between cable and DSL could mean fewer options for customers, said Comstock of CompTel/ALTS. "The reality is there will always be fewer networks than people seeking to provide services over those networks," he said.
When asked what kind of telecom reform was coming, the legislative aides tended to avoid concrete answers. Most agreed that reform of intercarrier compensation and the Universal Service Fund are needed. The fund is a federal program that provides money for telecom services in rural and poor areas. Levine suggested that the Universal Service Fund could be expanded to include funding for broadband if VOIP providers are required to pay in.
Most also agreed that a bill encouraging broadcasters to move from using analog spectrum to DTV (digital television) broadcasts would be among the telecom-related bills that moves through Congress quickly, maybe as soon as this year. In May, Representative Joe Barton, a Texas Republican and chairman of the House Energy and Commerce Committee, floated draft legislation that would force a transition to DTV by the end of 2008. A transition to DTV would free up wireless spectrum for advanced services such as wireless broadband.
Currently, broadcasters are required to make that move by the end of 2006 or when 85 percent of homes in their market have DTV-ready television sets. With millions of TV sets that don't support DTV still in use in the U.S., a full transition could take several years under current law.
Some congressional Democrats have called for subsidies for U.S. residents who can't afford new DTV equipment, but Barton's draft bill does not include a subsidy. "What happens to those gazillion television sets out there that aren't capable of receiving digital signals?" said Symons, the telecom lawyer. "In a world where we're paying $2.75 for a gallon of gas, can senators justify subsidizing TV sets?"
Symons questioned if Democrats want a guarantee that every TV set will work before a DTV transition happens.
"I think 'every TV' is a probably a little of bit of an exaggeration," said Rachel Welch, Democratic counsel for the Senate Commerce Committee. "But they certainly like a guarantee that TVs will work right."
Posted by Chad Dickerson at 03:50 PM