Thursday, March 31, 2005
IRS May Consider EBay Sales Taxable Income
Hawking baby and children's clothes -- along with some garage sale and thrift store bargains -- on eBay helps Sunni Wojnarowsky bring in some extra money so she can afford to stay home with her two young boys. The additional dollars are great, but does she really need to hassle with the paperwork and report her small profit to the Internal Revenue Service? Her question, posed to the online auction site's discussion board for sellers, generated much advice -- and more confusion.
In tax law, there is no clear, bright line that separates fun from profit, or a hobby from a business . But IRS instructions make it clear that all income -- a category that includes bribes, gambling winnings, kickbacks and money made in illegal activities -- can be taxed. "You can't get an answer from anybody," Wojnarowsky said in an interview from her home in Brunswick, Ohio. "It would be nice to have a straightforward answer of yes, you file taxes, or no, you don't."
Big Business: More than 135 million people have registered to use the auction site that calls itself "the world's online marketplace." Buyers bought more than US$34 billion worth of merchandise there last year. Some people make money by cleaning out items from their closets; others use the site to run small businesses. "When you're working on the Internet, it's kind of a gray issue," said Bart Fooden, a certified public accountant in Woodbury, N.Y., who advises small businesses and individuals. "The big issue is whether you're doing it as a business or not."
The IRS can apply a list of nine indicators that might prove whether someone's online auctions amount to a business. These indicators include evidence that the taxpayer depends on the income, acts in a businesslike manner, or puts enough time and effort into the activity to suggest a profit motive. Fooden said the difference between a hobby and a business can often be the seller's intent. If someone is selling the junk that is collecting dust in a garage or basement, then that person probably is getting less than he paid for it -- no profit here. But if someone is buying goods in bulk from a wholesaler and hoping to make a couple extra bucks reselling each one, then that person could have just started a profitable business, Fooden said.
Fuzzy Lines: On the other hand, some categories are not so clear. If a great-aunt's collection of antique china fetched top dollar from collectors, that might mean capital gains taxes are owed. And if someone scours neighborhood garage sales for great deals on comic books to resell on eBay, that might amount to running a business. It often is best to ask a tax professional, said Bob Miller, who says he spends about 18 hours a day on eBay, selling collectable postage stamps and advising other buyers and sellers from his home in northern Utah. "When the person that you owe the money to can throw you in jail, it's always a good idea to get professional advice," he said.
EBay spokesman Chris Donlay said the company does not report individual sales to the tax authorities. eBay urges users, in the site's educational materials and seminars, to learn about tax issues. "It's really up to the seller, just like offline," he said. "We are just a venue, really. We're sort of like the mall landlord or the owner of the parking lot where the flea market happens."
It takes so little effort to set up shop on eBay that some might overlook the tax issues, Miller said.
"If you have an e-mail address, you can start selling. If you're a U.S.-based seller, you need to have a credit card and a bank account," Miller said. "People have a feeling that they're selling on eBay, they're not a business. It's not true. If you are selling and making a profit, you have to declare it."
Making a Living: An eBay survey last year found that 430,000 of its U.S. sellers make a significant portion or all of their revenue from selling on eBay. While it might sound like nothing good can come of the headache involved in claiming a small profit from online auctions, consider the perks. Business expenses can be deducted from profits. That includes the cost of the goods sold, fees, supplies and maybe a home office -- if the qualifications are met.
Wojnarowsky said she plans to report her eBay profits, which she estimates at roughly $2,000, but she is not looking forward to it. Last year, the Wojnarowsky paid a $400 tax preparation fee, which included a business schedule to report online auction earnings. This year, they will crunch the numbers themselves using tax preparation software. "I talked to a friend of mine who does eBay, and she's not filing because she said it's not regulated," Wojnarowsky said. "But my fear is, yeah, but what if you're wrong? I don't want to pay the fine."
Brought to you by Guardian eCommerce.
In tax law, there is no clear, bright line that separates fun from profit, or a hobby from a business . But IRS instructions make it clear that all income -- a category that includes bribes, gambling winnings, kickbacks and money made in illegal activities -- can be taxed. "You can't get an answer from anybody," Wojnarowsky said in an interview from her home in Brunswick, Ohio. "It would be nice to have a straightforward answer of yes, you file taxes, or no, you don't."
Big Business: More than 135 million people have registered to use the auction site that calls itself "the world's online marketplace." Buyers bought more than US$34 billion worth of merchandise there last year. Some people make money by cleaning out items from their closets; others use the site to run small businesses. "When you're working on the Internet, it's kind of a gray issue," said Bart Fooden, a certified public accountant in Woodbury, N.Y., who advises small businesses and individuals. "The big issue is whether you're doing it as a business or not."
The IRS can apply a list of nine indicators that might prove whether someone's online auctions amount to a business. These indicators include evidence that the taxpayer depends on the income, acts in a businesslike manner, or puts enough time and effort into the activity to suggest a profit motive. Fooden said the difference between a hobby and a business can often be the seller's intent. If someone is selling the junk that is collecting dust in a garage or basement, then that person probably is getting less than he paid for it -- no profit here. But if someone is buying goods in bulk from a wholesaler and hoping to make a couple extra bucks reselling each one, then that person could have just started a profitable business, Fooden said.
Fuzzy Lines: On the other hand, some categories are not so clear. If a great-aunt's collection of antique china fetched top dollar from collectors, that might mean capital gains taxes are owed. And if someone scours neighborhood garage sales for great deals on comic books to resell on eBay, that might amount to running a business. It often is best to ask a tax professional, said Bob Miller, who says he spends about 18 hours a day on eBay, selling collectable postage stamps and advising other buyers and sellers from his home in northern Utah. "When the person that you owe the money to can throw you in jail, it's always a good idea to get professional advice," he said.
EBay spokesman Chris Donlay said the company does not report individual sales to the tax authorities. eBay urges users, in the site's educational materials and seminars, to learn about tax issues. "It's really up to the seller, just like offline," he said. "We are just a venue, really. We're sort of like the mall landlord or the owner of the parking lot where the flea market happens."
It takes so little effort to set up shop on eBay that some might overlook the tax issues, Miller said.
"If you have an e-mail address, you can start selling. If you're a U.S.-based seller, you need to have a credit card and a bank account," Miller said. "People have a feeling that they're selling on eBay, they're not a business. It's not true. If you are selling and making a profit, you have to declare it."
Making a Living: An eBay survey last year found that 430,000 of its U.S. sellers make a significant portion or all of their revenue from selling on eBay. While it might sound like nothing good can come of the headache involved in claiming a small profit from online auctions, consider the perks. Business expenses can be deducted from profits. That includes the cost of the goods sold, fees, supplies and maybe a home office -- if the qualifications are met.
Wojnarowsky said she plans to report her eBay profits, which she estimates at roughly $2,000, but she is not looking forward to it. Last year, the Wojnarowsky paid a $400 tax preparation fee, which included a business schedule to report online auction earnings. This year, they will crunch the numbers themselves using tax preparation software. "I talked to a friend of mine who does eBay, and she's not filing because she said it's not regulated," Wojnarowsky said. "But my fear is, yeah, but what if you're wrong? I don't want to pay the fine."
Brought to you by Guardian eCommerce.
Wednesday, March 30, 2005
Dot-Com Comeback Marks Rise of Hosting Services
The fallout from the dot-com collapse a few years ago might be fueling a new rush for businesses to build a presence on the World Wide Web. Network Solutions CEO Champ Mitchell sees small businesses setting up shop on the Internet in record numbers.
As storefront welcome signs announce a growing gathering, Mitchell wants his company to be poised to create a new infrastructure to service the new tenants on the Internet-business main street. Newcomers to the Web need more than do-it-yourself, template-based Web site creation tools.
To meet that need, Mitchell tore down the existing customer service framework at Network Solutions and rebuilt it from the ground up. The result is a staff of newly schooled customer service agents trained to solve problems and support an enhanced offering of Web-building services.
New Crop of Tenants: Network Solutions, for years one of the best known domain name registration providers, announced on March 2 its enhanced Web hosting packages. The new service offers solutions for both individuals wanting to establish an online presence and businesses that want to grow online. The round-the-clock support center is trained to take the jargon our of tech help sessions and turn off the money meter for providing service.
"We will provide rational packages that make sense to businesses. Then businesses can customize it efficiently at a good price point," Mitchell said.
Network Solutions' Web hosting includes a free domain name for annual packages and a free Web site building tool. The packages include marketing tools from industry leaders such as Google, Overture, and Constant Contact.
According to Mitchell, the growth rate of return to the Web is accelerating rapidly. However, the return of businesses online is not resuming where the dot-com express stopped. Businesses are coming back online for a different purpose.
Boosting the Bottom Line: Between 1999 and 2000, the online rush was largely done by speculators buying domain names. The biggest use for the Net back then was wealth enhancement by the speculators. "We don't see much speculation on the Internet today. Instead, we see more utilization of domain names," Mitchell said.
The majority of his customers are using the Internet so they can be found by their customers. A presence on the Internet is a way to increase the bottom line. "Consumers now expect companies to be online. It presents a bad image when they aren't," Mitchell said.
As Mitchell sees it, the growth of business on the Internet resembles what happened with the adoption of cell phones. At first, cell phones were huge devices that were cumbersome and were used strictly by important executives in big corporations. Cell phone uses were limited to critical upper echelon communications. As cell phones got more accepted, the purchase price dropped, making them more affordable for small business uses. Now cell phones have become so small and relatively inexpensive that they have become mainstream, must-have items even for older children.
"That is how people are starting to use their own Web sites. A parent who has a business Web site will create a Web page for his kid's Little League team. Schools will set up Web sites for the convenience of communicating with the community," Mitchell said. He said that of 3.5 million new Web site creators, some 200,000 to 300,000 customers fall into that category. The remaining 3 million customers fall into business categories.
Service Innovations: Mitchell believes two factors will continue to drive Network Solutions' new service division and separate it from the competition. One is the power of the corporate brand name. The other is a new approach to customer service. "We spend more money in marketing our name than any other company. That strategy has made us the most recognized name in the Internet industry," Mitchell said.
The name brand power is driving the company's insertion into the Web services business. Mitchell said Network Solutions in one month sold four times as many packages as was projected. The volume overloaded the company's ability to maintain customer support. "Thus, we pulled our advertisements until the additional support staff we already hired finished training," he said.
The company redesigned its customer service operation as a platform to offer services to small businesses. The key to that success, at least so far, is the decision to provide affordable customer service around the clock seven days per week. "To be their solution, we have to start from the beginning to spend time with customers at no charge," Mitchell said.
New Back Office Partner: If small businesses and non-business consumers are going to thrive on the Internet, they will need reliable hand-holding rather than to be treated as inferior because they lack technological savvy, Mitchell explained. "Companies want to do their own business offerings to serve their own customers. We provide the back office service that they don't want to do themselves. We do it online for efficiency," the Networks' Solutions president and CEO said.
Mitchell said that strategy in one year has turned a customer service operation that was a budget liability into one that runs as a profit-making center. Network Solutions will expand its Web creation and service offerings with a series of application suites. These suites will enhance customers' online presence.
They provide a new combination of affordability, ease of use, reliability and power. Web site hosting and e-commerce packages are priced from US$9.96 per month to $34.95 per month for an annual plan. The packages come with up to 50 GB of storage, monthly data transfer and up to 100 e-mail boxes. All of Network Solutions' Web site hosting solutions are supported by free 24/7, live customer support and technical support, and a 30-day limited money back guarantee.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
As storefront welcome signs announce a growing gathering, Mitchell wants his company to be poised to create a new infrastructure to service the new tenants on the Internet-business main street. Newcomers to the Web need more than do-it-yourself, template-based Web site creation tools.
To meet that need, Mitchell tore down the existing customer service framework at Network Solutions and rebuilt it from the ground up. The result is a staff of newly schooled customer service agents trained to solve problems and support an enhanced offering of Web-building services.
New Crop of Tenants: Network Solutions, for years one of the best known domain name registration providers, announced on March 2 its enhanced Web hosting packages. The new service offers solutions for both individuals wanting to establish an online presence and businesses that want to grow online. The round-the-clock support center is trained to take the jargon our of tech help sessions and turn off the money meter for providing service.
"We will provide rational packages that make sense to businesses. Then businesses can customize it efficiently at a good price point," Mitchell said.
Network Solutions' Web hosting includes a free domain name for annual packages and a free Web site building tool. The packages include marketing tools from industry leaders such as Google, Overture, and Constant Contact.
According to Mitchell, the growth rate of return to the Web is accelerating rapidly. However, the return of businesses online is not resuming where the dot-com express stopped. Businesses are coming back online for a different purpose.
Boosting the Bottom Line: Between 1999 and 2000, the online rush was largely done by speculators buying domain names. The biggest use for the Net back then was wealth enhancement by the speculators. "We don't see much speculation on the Internet today. Instead, we see more utilization of domain names," Mitchell said.
The majority of his customers are using the Internet so they can be found by their customers. A presence on the Internet is a way to increase the bottom line. "Consumers now expect companies to be online. It presents a bad image when they aren't," Mitchell said.
As Mitchell sees it, the growth of business on the Internet resembles what happened with the adoption of cell phones. At first, cell phones were huge devices that were cumbersome and were used strictly by important executives in big corporations. Cell phone uses were limited to critical upper echelon communications. As cell phones got more accepted, the purchase price dropped, making them more affordable for small business uses. Now cell phones have become so small and relatively inexpensive that they have become mainstream, must-have items even for older children.
"That is how people are starting to use their own Web sites. A parent who has a business Web site will create a Web page for his kid's Little League team. Schools will set up Web sites for the convenience of communicating with the community," Mitchell said. He said that of 3.5 million new Web site creators, some 200,000 to 300,000 customers fall into that category. The remaining 3 million customers fall into business categories.
Service Innovations: Mitchell believes two factors will continue to drive Network Solutions' new service division and separate it from the competition. One is the power of the corporate brand name. The other is a new approach to customer service. "We spend more money in marketing our name than any other company. That strategy has made us the most recognized name in the Internet industry," Mitchell said.
The name brand power is driving the company's insertion into the Web services business. Mitchell said Network Solutions in one month sold four times as many packages as was projected. The volume overloaded the company's ability to maintain customer support. "Thus, we pulled our advertisements until the additional support staff we already hired finished training," he said.
The company redesigned its customer service operation as a platform to offer services to small businesses. The key to that success, at least so far, is the decision to provide affordable customer service around the clock seven days per week. "To be their solution, we have to start from the beginning to spend time with customers at no charge," Mitchell said.
New Back Office Partner: If small businesses and non-business consumers are going to thrive on the Internet, they will need reliable hand-holding rather than to be treated as inferior because they lack technological savvy, Mitchell explained. "Companies want to do their own business offerings to serve their own customers. We provide the back office service that they don't want to do themselves. We do it online for efficiency," the Networks' Solutions president and CEO said.
Mitchell said that strategy in one year has turned a customer service operation that was a budget liability into one that runs as a profit-making center. Network Solutions will expand its Web creation and service offerings with a series of application suites. These suites will enhance customers' online presence.
They provide a new combination of affordability, ease of use, reliability and power. Web site hosting and e-commerce packages are priced from US$9.96 per month to $34.95 per month for an annual plan. The packages come with up to 50 GB of storage, monthly data transfer and up to 100 e-mail boxes. All of Network Solutions' Web site hosting solutions are supported by free 24/7, live customer support and technical support, and a 30-day limited money back guarantee.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Monday, March 28, 2005
Search Engines Battle for Web Clickers
Google has so firmly staked out its place as the Internet search-engine leader that it has even earned a place as a verb in the English lexicon. Paradoxically, because of its popularity, there may be no better time to try something different. Google's success has forced competitors like Yahoo, MSN Search and Ask Jeeves to hustle with releasing new product features, search controls and improved behind-the-scenes programming. The resulting bonanza of tools brings more search capabilities, presented more intuitively than the Web has ever seen.
Competing Services: But despite the advances, it may be users' search habits that present the biggest obstacle to improving the search experience. The pressure to produce is not just coming from Google. In April 2003, Ask Jeeves added "Smart Search" to its engine, which tops search results for definitive queries like "Who is George Washington?" with answers like an encyclopedia citation and a photograph in addition to Web links. That same month, Yahoo provided shortcuts to its own topic pages on popular subjects. The top result for "weather in New York," for instance, leads to Yahoo's New York City weather page, with current conditions and a five-day outlook.
Associating database content with queries caught on. America Online Search now provides information from partners' content and its own; these "snapshots" in fields like entertainment, sports and shopping link to information from publications within the Time Warner media universe, including Entertainment Weekly and Sports Illustrated. Likewise, MSN Search returns links to information from its own specialized databases, like MSN Music, msnbc.com and Microsoft's Encarta encyclopedia.
News Features: "Having the trusted data, what we know is a right answer, and not asking them to trawl around that's a huge advantage for the user," said Ramez Naam, MSN Search's group program manager. Ask Jeeves will introduce technology this spring that will further the question-and-answer abilities of its engine. The new feature, Direct Answers From Search, will search across the entire Web, rather than simply from its own database, to find answers to natural-language queries (that is, those phrased as questions rather than mere search terms).
"This allows us to answer far more questions than would be possible using editors or structured databases," said Jim Lanzone, the company's senior vice president for search properties. "When you're diving into structured databases, you're limited in your coverage. We want to harvest the power of the 2.5 billion English-language documents in our index, to more broadly answer people's keywords and questions."
In comparison, natural-language queries performed with other engines not matching specialized content yield a list of links closely associated with the phrase with more consideration for popularity than accuracy. For example, searching for "Who invented the Internet?" on Google, Yahoo and MSN yields a top result exonerating Al Gore, rather than crediting computer scientists like J.C.R. Licklider. Other Google rivals are focusing their product enhancements on offerings that try to bring simplicity and relevance to the search experience.
Making It Easier: Microsoft's updated MSN Search tries to make searching easier by complementing Boolean terms like "and," "or" and "not" with slide controls (under "results ranking" in Search Builder) that can be adjusted to determine how broadly or narrowly to search. In addition, a "NearMe" button can return results based on proximity to your location; the company says about a quarter of all searches make reference to geographic information. "You're going to see a lot of work in that area," said Oshoma Momoh, the general manager for program management at MSN Search. "If you're querying a news item, we'll show it to you. Or answers from real people. If we can guess that a person is shopping, maybe we can give you a few simple tools that might help you with that task, rather than guessing, 'Do I click on this?'"
Also of recent note, Amazon's (Nasdaq: AMZN) A9 search engine builds on the ability to search by supplementing Web data with its own information. For example, the A9 Yellow Pages service, introduced in late January, not only searches for and provides directions to local businesses, but with the "Block View" feature actually displays a photo of the business in the context of its neighborhood, with millions of images up and down the streets of a dozen cities including New York, Atlanta, San Francisco and Seattle. "This is more than the hidden Web. It didn't even exist before," A9's chief executive, Udi Manber, said.
New Technologies: Google itself, of course, has been a major innovator, with features like Google Video, which provides searchable transcripts to television programs, and Google Maps, which offers the kind of dynamic, easily navigable charts once reserved for dedicated map programs.
John Battelle, who maintains a Web log about search technology (Searchblog), said innovations like "Block View" showed how dynamically the search companies were taking advantage of new technologies and new economies. "In 1997 you would have had to spend tens of billions, and it wouldn't have made any sense," Battelle said. "Now, you can strap a camera and GPS on a computer and drive down the street taking pictures. It's a neat idea, and it didn't cost the farm to try. Now imagine that across the whole Web that's what's happening."
More information at Guardian eCommerce.
Competing Services: But despite the advances, it may be users' search habits that present the biggest obstacle to improving the search experience. The pressure to produce is not just coming from Google. In April 2003, Ask Jeeves added "Smart Search" to its engine, which tops search results for definitive queries like "Who is George Washington?" with answers like an encyclopedia citation and a photograph in addition to Web links. That same month, Yahoo provided shortcuts to its own topic pages on popular subjects. The top result for "weather in New York," for instance, leads to Yahoo's New York City weather page, with current conditions and a five-day outlook.
Associating database content with queries caught on. America Online Search now provides information from partners' content and its own; these "snapshots" in fields like entertainment, sports and shopping link to information from publications within the Time Warner media universe, including Entertainment Weekly and Sports Illustrated. Likewise, MSN Search returns links to information from its own specialized databases, like MSN Music, msnbc.com and Microsoft's Encarta encyclopedia.
News Features: "Having the trusted data, what we know is a right answer, and not asking them to trawl around that's a huge advantage for the user," said Ramez Naam, MSN Search's group program manager. Ask Jeeves will introduce technology this spring that will further the question-and-answer abilities of its engine. The new feature, Direct Answers From Search, will search across the entire Web, rather than simply from its own database, to find answers to natural-language queries (that is, those phrased as questions rather than mere search terms).
"This allows us to answer far more questions than would be possible using editors or structured databases," said Jim Lanzone, the company's senior vice president for search properties. "When you're diving into structured databases, you're limited in your coverage. We want to harvest the power of the 2.5 billion English-language documents in our index, to more broadly answer people's keywords and questions."
In comparison, natural-language queries performed with other engines not matching specialized content yield a list of links closely associated with the phrase with more consideration for popularity than accuracy. For example, searching for "Who invented the Internet?" on Google, Yahoo and MSN yields a top result exonerating Al Gore, rather than crediting computer scientists like J.C.R. Licklider. Other Google rivals are focusing their product enhancements on offerings that try to bring simplicity and relevance to the search experience.
Making It Easier: Microsoft's updated MSN Search tries to make searching easier by complementing Boolean terms like "and," "or" and "not" with slide controls (under "results ranking" in Search Builder) that can be adjusted to determine how broadly or narrowly to search. In addition, a "NearMe" button can return results based on proximity to your location; the company says about a quarter of all searches make reference to geographic information. "You're going to see a lot of work in that area," said Oshoma Momoh, the general manager for program management at MSN Search. "If you're querying a news item, we'll show it to you. Or answers from real people. If we can guess that a person is shopping, maybe we can give you a few simple tools that might help you with that task, rather than guessing, 'Do I click on this?'"
Also of recent note, Amazon's (Nasdaq: AMZN) A9 search engine builds on the ability to search by supplementing Web data with its own information. For example, the A9 Yellow Pages service, introduced in late January, not only searches for and provides directions to local businesses, but with the "Block View" feature actually displays a photo of the business in the context of its neighborhood, with millions of images up and down the streets of a dozen cities including New York, Atlanta, San Francisco and Seattle. "This is more than the hidden Web. It didn't even exist before," A9's chief executive, Udi Manber, said.
New Technologies: Google itself, of course, has been a major innovator, with features like Google Video, which provides searchable transcripts to television programs, and Google Maps, which offers the kind of dynamic, easily navigable charts once reserved for dedicated map programs.
John Battelle, who maintains a Web log about search technology (Searchblog), said innovations like "Block View" showed how dynamically the search companies were taking advantage of new technologies and new economies. "In 1997 you would have had to spend tens of billions, and it wouldn't have made any sense," Battelle said. "Now, you can strap a camera and GPS on a computer and drive down the street taking pictures. It's a neat idea, and it didn't cost the farm to try. Now imagine that across the whole Web that's what's happening."
More information at Guardian eCommerce.
Wednesday, March 23, 2005
Bloggers Unite! And Start Making Some Money
Unless your name is Matt Drudge, you're probably not making millions with a Web log.
But more and more bloggers are working their blogs as a business, producing some income. And advertisers are increasingly paying attention.
As veteran Boston blogger Adam Gaffin puts it, advertisers are less interested in your blog about cats than they are in 100 blogs about cats put together.
Banner Ads: "Aggregation is what it's all about," says Gaffin, who's also executive online editor with Network World. "It's amazing how you can make money off these little niches right now if you aggregate them," he says.
Gaffin has been blogging since before they called it blogging. His Boston-oriented universalhub.com is running banner ads from job recruiter Monster, Internet phone company Vonage and others.
The reality of blogonomics are tough. It's not a get-rich-quick thing, nor is that why most bloggers are into it. Gaffin concedes he's not making much money off the ads -- a few bucks for every 1,000 times they're viewed on his site. But, he says, "If you become successful and become really popular, sure, you can make some serious money."
Blogger Nick Denton made news earlier this year when his Gawker Media inked a US$25,000 ad buy from Sony to sponsor Gawker's new LifeHacker gadgetry software blog. Bloggers are learning to let other companies do the ad sales work for them -- companies such as Google, Blogads.com and Burlington-based Burst! Media. Burst sells packages of Internet sites, including a growing number of blogs, to advertisers.
Traffic Growth: Gaffin says the more specialized the blog, the smaller the audience is likely to be. But that specialized audience may be one advertisers crave. Burst is bundling blogs and other Internet sites focused on similar topics into "infinitely customizable packages" and selling them to advertisers.
Gaffin says few of the bloggers writing about Boston are selling ads, though some appear to be thinking about it. Last month, Jon Petitt launched Bostonist, a blog about all things Boston and part of the Gothamist blog network, with blogs in nine cities. Bostonist isn't selling ads yet, but that's in the plan. "As traffic starts to grow, it entices advertisers," Petitt says. "Traffic has to reach a critical mass before you can sell advertisements."
Others say the greater blogonomic opportunities are less in advertising than in other forms of marketing. Gaffin says the money is in selling things. He says he made "a killing" last fall in selling Red Sox merchandise through an affiliate marketing program that linked buyers to Amazon.com (Nasdaq: AMZN) through his site.
People are also paying popular bloggers to link to their sites. "It's not just about having a link from any blog," says Steve Turcotte, president of Backbone Media, a Waltham search-engine marketing company. "If I had one from a gardening site it wouldn't do me much good, but if it's from a known authority, that's more valuable to me."
No Media Empire: In 2003, Drudge, founder of the hugely popular Drudge Report, estimated making about $1.2 million a year working out of his Miami Beach condo. Gaffin says most bloggers working out of a spare bedroom won't be building a media empire. But, he says, "If you're making $25,000, $30,000, $40,000 a year, pretty soon you start thinking about giving up your day job."
More information at Guardian eCommerce.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
But more and more bloggers are working their blogs as a business, producing some income. And advertisers are increasingly paying attention.
As veteran Boston blogger Adam Gaffin puts it, advertisers are less interested in your blog about cats than they are in 100 blogs about cats put together.
Banner Ads: "Aggregation is what it's all about," says Gaffin, who's also executive online editor with Network World. "It's amazing how you can make money off these little niches right now if you aggregate them," he says.
Gaffin has been blogging since before they called it blogging. His Boston-oriented universalhub.com is running banner ads from job recruiter Monster, Internet phone company Vonage and others.
The reality of blogonomics are tough. It's not a get-rich-quick thing, nor is that why most bloggers are into it. Gaffin concedes he's not making much money off the ads -- a few bucks for every 1,000 times they're viewed on his site. But, he says, "If you become successful and become really popular, sure, you can make some serious money."
Blogger Nick Denton made news earlier this year when his Gawker Media inked a US$25,000 ad buy from Sony to sponsor Gawker's new LifeHacker gadgetry software blog. Bloggers are learning to let other companies do the ad sales work for them -- companies such as Google, Blogads.com and Burlington-based Burst! Media. Burst sells packages of Internet sites, including a growing number of blogs, to advertisers.
Traffic Growth: Gaffin says the more specialized the blog, the smaller the audience is likely to be. But that specialized audience may be one advertisers crave. Burst is bundling blogs and other Internet sites focused on similar topics into "infinitely customizable packages" and selling them to advertisers.
Gaffin says few of the bloggers writing about Boston are selling ads, though some appear to be thinking about it. Last month, Jon Petitt launched Bostonist, a blog about all things Boston and part of the Gothamist blog network, with blogs in nine cities. Bostonist isn't selling ads yet, but that's in the plan. "As traffic starts to grow, it entices advertisers," Petitt says. "Traffic has to reach a critical mass before you can sell advertisements."
Others say the greater blogonomic opportunities are less in advertising than in other forms of marketing. Gaffin says the money is in selling things. He says he made "a killing" last fall in selling Red Sox merchandise through an affiliate marketing program that linked buyers to Amazon.com (Nasdaq: AMZN) through his site.
People are also paying popular bloggers to link to their sites. "It's not just about having a link from any blog," says Steve Turcotte, president of Backbone Media, a Waltham search-engine marketing company. "If I had one from a gardening site it wouldn't do me much good, but if it's from a known authority, that's more valuable to me."
No Media Empire: In 2003, Drudge, founder of the hugely popular Drudge Report, estimated making about $1.2 million a year working out of his Miami Beach condo. Gaffin says most bloggers working out of a spare bedroom won't be building a media empire. But, he says, "If you're making $25,000, $30,000, $40,000 a year, pretty soon you start thinking about giving up your day job."
More information at Guardian eCommerce.
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Monday, March 21, 2005
Amazon's A9 Pushes 'Open Search' Approach
Throwing a twist into the raging search wars, Amazon's A9.com search site is pushing an open format that allows vertical search results to be widely syndicated in a manner similar to a popular approach for cross-pollinating blogs and news feeds.
A9.com launched OpenSearch, which it bills as "a collection of technologies, all built on top of popular open standards, to allow content providers to publish their search results in a format suitable for syndication."
The idea is that any site that has content and a search box can return results in the OpenSearch format and that any content provider can get results from its own store of data listed on a search aggregator site.
Real Simple Syndication: On A9.com, the technology manifests itself this way: A long and growing list of search columns has been added to the search page. Those columns enable a search to be targeted in various databases, such as the New York Times, NASA, or Google's image database. After a keyword is searched for, results can be toggled between the columns with a single click.
Outside of A9, the open technology enables a blog publisher or any other content site to integrate the same search buttons onto his or her own site.
The idea is to use the premise and technology of the popular Real Simple Syndication (RSS) that enables blogs and news feeds to be propagated into different Web sites without disrupting code or unknowingly altering the appearance of a site.
"We want OpenSearch to do for search what RSS has done for content," Amazon CEO Jeff Bezos said in announcing the technology. Early versions of the OpenSearch tools are now available, with A9 promising more to come soon. In short, if you have a content site, you can syndicate searches of that content through A9.
In the model, sites such as A9 and others that use the OpenSearch format become search "aggregators" where numerous vertical search opportunities can be presented together.
Any site that has content -- and a search box -- can choose to return results in OpenSearch RSS. The explanation on A9.com reads, "This includes travel sites, classifieds, encyclopedias..." ... If you can provide search results for something, it probably can fit into the OpenSearch model.
OpenSearch is not a search engine -- it is a way for search engines to publish their search results in a standard and accessible format.
Search Engine Watch editor Danny Sullivan said the technology offers "an alternative" to existing approaches, and because it is based on readily available and non-proprietary technologies, is an idea that can be duplicated by others. Sullivan said the result is "an open format that will enable search results to be displayed anywhere, anytime."
The A9 announcement came within a day of Microsoft announcing that it had developed its own paid search results technology that will use demographic information to enable advertisers to tightly target consumers. That product will be aimed at the lucrative paid search market, which Yahoo and Google currently dominate.
More information at Guardian eCommerce.
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A9.com launched OpenSearch, which it bills as "a collection of technologies, all built on top of popular open standards, to allow content providers to publish their search results in a format suitable for syndication."
The idea is that any site that has content and a search box can return results in the OpenSearch format and that any content provider can get results from its own store of data listed on a search aggregator site.
Real Simple Syndication: On A9.com, the technology manifests itself this way: A long and growing list of search columns has been added to the search page. Those columns enable a search to be targeted in various databases, such as the New York Times, NASA, or Google's image database. After a keyword is searched for, results can be toggled between the columns with a single click.
Outside of A9, the open technology enables a blog publisher or any other content site to integrate the same search buttons onto his or her own site.
The idea is to use the premise and technology of the popular Real Simple Syndication (RSS) that enables blogs and news feeds to be propagated into different Web sites without disrupting code or unknowingly altering the appearance of a site.
"We want OpenSearch to do for search what RSS has done for content," Amazon CEO Jeff Bezos said in announcing the technology. Early versions of the OpenSearch tools are now available, with A9 promising more to come soon. In short, if you have a content site, you can syndicate searches of that content through A9.
In the model, sites such as A9 and others that use the OpenSearch format become search "aggregators" where numerous vertical search opportunities can be presented together.
Any site that has content -- and a search box -- can choose to return results in OpenSearch RSS. The explanation on A9.com reads, "This includes travel sites, classifieds, encyclopedias..." ... If you can provide search results for something, it probably can fit into the OpenSearch model.
OpenSearch is not a search engine -- it is a way for search engines to publish their search results in a standard and accessible format.
Search Engine Watch editor Danny Sullivan said the technology offers "an alternative" to existing approaches, and because it is based on readily available and non-proprietary technologies, is an idea that can be duplicated by others. Sullivan said the result is "an open format that will enable search results to be displayed anywhere, anytime."
The A9 announcement came within a day of Microsoft announcing that it had developed its own paid search results technology that will use demographic information to enable advertisers to tightly target consumers. That product will be aimed at the lucrative paid search market, which Yahoo and Google currently dominate.
More information at Guardian eCommerce.
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Sunday, March 20, 2005
MSN Launches Sponsored Ads on Search Site
Having rolled out its own search engine in a bid to match rivals Yahoo and Google in terms of technology, Microsoft is now hoping to duplicate their success in the revenue and profit arenas by launching a paid search product.
MSN Search is hoping that the use of collected demographics information will help its advertising product, known as adCenter and currently existing only in prototype form, stand out against Google's AdWords and the paid services that Yahoo's Overture unit offers.
User Information: MSN plans to use demographic information about users who have signed up for MSN products such as Hotmail to help advertisers reach their target audience more effectively. Ads can be filtered based on the gender, age and other general information about a user. Personal identifying information is not included in the data dump.
MSN Search currently uses paid results from Yahoo, meaning that MSN has shared revenue from the service with its rival. The current agreement runs out in 2006, by which time Microsoft will likely be finished with testing in overseas locations not covered by the Yahoo deal. AdCenter market tests will begin in Singapore and France within six months, the company said.
Microsoft believes the technology will not only help it compete against the other major search providers but will also put it in a strong position to be a key advertising partner as more entertainment media, including television shows, make their way onto the Web.
Microsoft announced the service at its annual meeting for marketers. The Strategic Account Summit, as the event is known, is where Ballmer admitted last year that Microsoft waited too long to begin developing its own search technology.
Aiming for Bull's Eye: Since then, Microsoft has aggressively pushed its own MSN Search to market, first in beta form and earlier this year in full market format. The search tool has debuted to mostly favorable results, but many analysts say it might not be enough by itself for Microsoft to significantly erode the market share and so-called mind share that Yahoo and Google amassed before MSN Search debuted.
While differentiation for users is important, Microsoft is hoping that targeting will help it set its search engine apart for advertisers. The store of data that MSN controls could help companies buying ads to send only those that it expects will be relevant to users. For instance, a car company could ask MSN to send different paid listings to users depending on whether they are men or women, or different ads for older users versus younger ones.
That same data pool is likely to also draw criticism from privacy groups. Though the information can not be used to identify a user, such groups have been critical of Microsoft's collection of it in the past.
Three of a Kind: Paid search is likely to become just one of myriad fronts on which the major search engines battle for supremacy, along with niche areas such as local search, mobile search and vertical search technologies for specific media such as music or video. While Ask Jeeves has held its ground as the fourth-largest search engine, a growing number of new players is crowding into the scene as well.
A growing number of analysts feel that it won't be necessary for Microsoft to dethrone Google or overpower Yahoo to be a major player in the search industry. Many feel that three sites is a good number to share in what Jupiter Research currently estimates is a US$3.2 billion market for paid search marketing this year, a market that will post strong growth for the next four to five years.
In fact, given its sheer size, its brand recognition among consumers and businesses -- including those who buy paid search listings -- Microsoft could help spur growth in the market, analyst David Garrity, of Carris and Co., said.
"Microsoft developing into the third major paid online search advertising platform is likely to support market growth as Global 2000 corporate clients find additional keyword inventory available," Carris wrote in a research note.
More information at Guardian eCommerce.
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MSN Search is hoping that the use of collected demographics information will help its advertising product, known as adCenter and currently existing only in prototype form, stand out against Google's AdWords and the paid services that Yahoo's Overture unit offers.
User Information: MSN plans to use demographic information about users who have signed up for MSN products such as Hotmail to help advertisers reach their target audience more effectively. Ads can be filtered based on the gender, age and other general information about a user. Personal identifying information is not included in the data dump.
MSN Search currently uses paid results from Yahoo, meaning that MSN has shared revenue from the service with its rival. The current agreement runs out in 2006, by which time Microsoft will likely be finished with testing in overseas locations not covered by the Yahoo deal. AdCenter market tests will begin in Singapore and France within six months, the company said.
Microsoft believes the technology will not only help it compete against the other major search providers but will also put it in a strong position to be a key advertising partner as more entertainment media, including television shows, make their way onto the Web.
Microsoft announced the service at its annual meeting for marketers. The Strategic Account Summit, as the event is known, is where Ballmer admitted last year that Microsoft waited too long to begin developing its own search technology.
Aiming for Bull's Eye: Since then, Microsoft has aggressively pushed its own MSN Search to market, first in beta form and earlier this year in full market format. The search tool has debuted to mostly favorable results, but many analysts say it might not be enough by itself for Microsoft to significantly erode the market share and so-called mind share that Yahoo and Google amassed before MSN Search debuted.
While differentiation for users is important, Microsoft is hoping that targeting will help it set its search engine apart for advertisers. The store of data that MSN controls could help companies buying ads to send only those that it expects will be relevant to users. For instance, a car company could ask MSN to send different paid listings to users depending on whether they are men or women, or different ads for older users versus younger ones.
That same data pool is likely to also draw criticism from privacy groups. Though the information can not be used to identify a user, such groups have been critical of Microsoft's collection of it in the past.
Three of a Kind: Paid search is likely to become just one of myriad fronts on which the major search engines battle for supremacy, along with niche areas such as local search, mobile search and vertical search technologies for specific media such as music or video. While Ask Jeeves has held its ground as the fourth-largest search engine, a growing number of new players is crowding into the scene as well.
A growing number of analysts feel that it won't be necessary for Microsoft to dethrone Google or overpower Yahoo to be a major player in the search industry. Many feel that three sites is a good number to share in what Jupiter Research currently estimates is a US$3.2 billion market for paid search marketing this year, a market that will post strong growth for the next four to five years.
In fact, given its sheer size, its brand recognition among consumers and businesses -- including those who buy paid search listings -- Microsoft could help spur growth in the market, analyst David Garrity, of Carris and Co., said.
"Microsoft developing into the third major paid online search advertising platform is likely to support market growth as Global 2000 corporate clients find additional keyword inventory available," Carris wrote in a research note.
More information at Guardian eCommerce.
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Wednesday, March 16, 2005
US Paid Online Content Market Hits $1.8 Billion
U.S. consumer spending on online content reached US$1.8 billion in 2004, up 14 percent from 2003, according to a study released today by the Online Publishers Association.
The trade group said the increase was largely driven by growth in the entertainment and lifestyles category as the Web evolves into an entertainment medium.
U.S. consumer spending on entertainment and lifestyles content grew a remarkable 90 percent, from $217.6 million in 2003 to $413.5 million in 2004. Online Personals Lead: Online personals and dating remained the leading paid content category in 2004, with spending at an all-time high of $469.5 million for the year, up 4 percent over 2003, according to the study.
The study found that spending on business and investment content declined 6 percent over that same time period. As a result, entertainment and lifestyles overtook business and investment content as the No. 2 paid content category and is on track to assume the top position should its current rate of growth continue.
In addition to entertainment and lifestyles, OPA found that the sports and games categories also showed strong annual growth of 38 percent and 22 percent, respectively.
"The fact that Entertainment/Lifestyles, Sports and Games were by far the year's fastest growing paid content categories is further evidence that the Web is on its way to becoming a true entertainment medium for U.S. consumers," said Michael Zimbalist, president of the Online Publishers Association.
Strong Market: According to the study, 19 million U.S. consumers paid for online content in the fourth quarter of 2004, up 2.6 million over the same period in 2003. "The market for paid online content remains strong," said Zimbalist, "and with less than 12 percent of the total US Internet population purchasing content online in the fourth quarter, there is still significant room for growth."
More information at Guardian eCommerce.
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The trade group said the increase was largely driven by growth in the entertainment and lifestyles category as the Web evolves into an entertainment medium.
U.S. consumer spending on entertainment and lifestyles content grew a remarkable 90 percent, from $217.6 million in 2003 to $413.5 million in 2004. Online Personals Lead: Online personals and dating remained the leading paid content category in 2004, with spending at an all-time high of $469.5 million for the year, up 4 percent over 2003, according to the study.
The study found that spending on business and investment content declined 6 percent over that same time period. As a result, entertainment and lifestyles overtook business and investment content as the No. 2 paid content category and is on track to assume the top position should its current rate of growth continue.
In addition to entertainment and lifestyles, OPA found that the sports and games categories also showed strong annual growth of 38 percent and 22 percent, respectively.
"The fact that Entertainment/Lifestyles, Sports and Games were by far the year's fastest growing paid content categories is further evidence that the Web is on its way to becoming a true entertainment medium for U.S. consumers," said Michael Zimbalist, president of the Online Publishers Association.
Strong Market: According to the study, 19 million U.S. consumers paid for online content in the fourth quarter of 2004, up 2.6 million over the same period in 2003. "The market for paid online content remains strong," said Zimbalist, "and with less than 12 percent of the total US Internet population purchasing content online in the fourth quarter, there is still significant room for growth."
More information at Guardian eCommerce.
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Monday, March 14, 2005
EBay Eyes Local Classifieds Niche
Eager to expand its reach by honing in on opportunities around the world that its auction platform has missed, eBay has said it will launch a worldwide network of local classified sites.
In a move being billed as the auction giant's largest expansion outside its core business, eBay said it had opened sites in some 50 cities, all in overseas locales from Beijing and Shangai in China to Dresden and Berlin in Germany as well as cities in Canada, France, Italy, Japan and Taiwan.
Operating under the brand name KiJiJi -- a Swahili word meaning village -- the sites offer a range of ads, from personals to jobs and housing.
Free at First: Some had expected eBay to move into the classifieds listing niche after it bought a minority take in Craigslist last year. However, eBay said it has no plans to launch the classified sites in the United States at this time. EBay said the KiJiJI sites will be free for all users for the time being. A similar tactic was used by Craigslist in the U.S. and gave it enormous reach and brand identity before it began to roll out some fees for listings more recently.
For now, eBay is billing KiJiJi as an experiment and said it came from a New Ventures team within the company whose mission is to find creative ways to expand the eBay brand. Analysts expect eBay will eventually seek to monetize the commerce on the site and might have plans to integrate the classified sites with its auction platform. That would help it generate the kind of sales and profit growth that its investors have become accustomed to in recent years.
EBay's purchase of a Craigslist stake last year sparked rampant speculation that eBay had plans to expand more rapidly into new areas in its home market. However, so far eBay has been content to let the popular classifieds site operate as it always has.
Still, online classifieds are a huge and growing market, one that has significantly dented newspaper classified sales in recent years. People who use them to search for or sell everything from roommates to used items would be logical customers to bring into the eBay fold.
"EBay has had such tremendous growth for so long, sustaining it will require some creative offshoots of the core business," Forrester Research analyst Carrie Johnson said.
Over There: So far, she added, eBay has been able to ride the overall growth of e-commerce and the fact that many new users are comfortable using its platform to both buy and sell. EBay had hoped that international growth would provide a sizable boost to its top and bottom line, but it has had some difficulty getting traction in some markets where other companies managed to establish brand identity and loyalty before eBay arrived on the scene.
Craigslist also has an international operation and has a presence in several cities where KiJiJi has launched. However, unlike the English-language Craigslist, KiJiJi sites are in the native tongue. At the same time, eBay is facing more competition at home, some spurred on by increases in fees that sparked anger among hardcore eBay users. While most analysts believe competitors will be hard pressed to develop the audience size and platform to compete seriously with eBay, any erosion of growth potential could be harmful to a company that consistently beats Wall Street estimates for earnings.
"EBay has managed to keep it going, but the U.S. can only provide so much growth," Johnson said.
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More information at Guardian eCommerce.
In a move being billed as the auction giant's largest expansion outside its core business, eBay said it had opened sites in some 50 cities, all in overseas locales from Beijing and Shangai in China to Dresden and Berlin in Germany as well as cities in Canada, France, Italy, Japan and Taiwan.
Operating under the brand name KiJiJi -- a Swahili word meaning village -- the sites offer a range of ads, from personals to jobs and housing.
Free at First: Some had expected eBay to move into the classifieds listing niche after it bought a minority take in Craigslist last year. However, eBay said it has no plans to launch the classified sites in the United States at this time. EBay said the KiJiJI sites will be free for all users for the time being. A similar tactic was used by Craigslist in the U.S. and gave it enormous reach and brand identity before it began to roll out some fees for listings more recently.
For now, eBay is billing KiJiJi as an experiment and said it came from a New Ventures team within the company whose mission is to find creative ways to expand the eBay brand. Analysts expect eBay will eventually seek to monetize the commerce on the site and might have plans to integrate the classified sites with its auction platform. That would help it generate the kind of sales and profit growth that its investors have become accustomed to in recent years.
EBay's purchase of a Craigslist stake last year sparked rampant speculation that eBay had plans to expand more rapidly into new areas in its home market. However, so far eBay has been content to let the popular classifieds site operate as it always has.
Still, online classifieds are a huge and growing market, one that has significantly dented newspaper classified sales in recent years. People who use them to search for or sell everything from roommates to used items would be logical customers to bring into the eBay fold.
"EBay has had such tremendous growth for so long, sustaining it will require some creative offshoots of the core business," Forrester Research analyst Carrie Johnson said.
Over There: So far, she added, eBay has been able to ride the overall growth of e-commerce and the fact that many new users are comfortable using its platform to both buy and sell. EBay had hoped that international growth would provide a sizable boost to its top and bottom line, but it has had some difficulty getting traction in some markets where other companies managed to establish brand identity and loyalty before eBay arrived on the scene.
Craigslist also has an international operation and has a presence in several cities where KiJiJi has launched. However, unlike the English-language Craigslist, KiJiJi sites are in the native tongue. At the same time, eBay is facing more competition at home, some spurred on by increases in fees that sparked anger among hardcore eBay users. While most analysts believe competitors will be hard pressed to develop the audience size and platform to compete seriously with eBay, any erosion of growth potential could be harmful to a company that consistently beats Wall Street estimates for earnings.
"EBay has managed to keep it going, but the U.S. can only provide so much growth," Johnson said.
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More information at Guardian eCommerce.
Saturday, March 12, 2005
Search Industry Facing Evolution
What will Google do next? How will Yahoo counter the move? And how will this impact MSN Search, Ask Jeeves and the scores of smaller players vying to get their share of the search engine revenue pie?
Rumors abound about what will come next for major players in search. Some believe Google is preparing to launch a free Internet telephone service in the United Kingdom. Others say Google will acquire an RSS (Really Simple Syndication) aggregator. Still others say Yahoo will enter the blogosphere with a strategic acquisition.
Why so much focus on Google? Because it's the 800-pound gorilla, serving 47 percent of the search market, according to Nielson//NetRatings. Yahoo serves 21 percent and MSN handles 13 percent. However, that market share is not exclusive. Nielson says there is crossover. Fifty-eight percent of searchers also say they use Yahoo and MSN.
Sponsored Links : Let the search wars continue. We've seen toolbars, pop-up ad blockers and even spyware associated with search in efforts to instill user loyalty. However, as competition increases, experts say more changes are coming-and quickly.
Analysts say those changes will include sponsored links that go beyond portals, Google's move towards becoming a portal, and legal issues that could stymie Google and the rest of the industry.
As smaller innovators have emerged with new products, and continue to seek out new dimensions to expand the business, search advertising is increasingly moving off the search page and onto other types of Web pages, according to Lance Podell, president of Kanoodle, a provider of sponsored links for search and content.
The biggest companies in search are effectively locked in to providing keyword search-based services for advertisers, but advertisers are looking to place sponsored links in other parts of the Web to increase their reach and extend their marketing programs.
The blogosphere is the next probable venue for sponsored advertising, Andy Beal, vice president of search marketing for WebSourced, a search engine marketing firm, told the E-Commerce Times. He agrees with Podell about more interest in sponsored links. Blogs will continue to evolve and the opportunity for targeted marketing comes into play as advertising becomes a part of Really Simple Syndication feeds.
This, analysts said, is a key motive for search engines to host blogs and why some speculate that Yahoo will acquire Six Apart, a Web logging software and service company, this year. However, Google and its Blogger are still the prophesied blog champs of 2005.
Google and the Legal Landscape: While Google is the undisputed king of search, it is losing some momentum in the legal arena, and experts said this has implications for the entire search industry.
Among the most significant legal cases to keep an eye on this year are lawsuits against Google claiming the search engine violates trademark law by allowing advertisers to select keywords that will cause those ads to appear on results pages for searches of the trademark.
A judge recently ruled in Google's favor in a Virginia lawsuit filed by Geico. The suit alleged Google was allowing other auto insurers to use "Geico" as a keyword that would trigger their ads.
On the other hand, French courts are finding against Google in similar lawsuits filed there.
Sheldon Klein, an intellectual property lawyer at Arent Fox in Washington, D.C., told the E-Commerce Times more similar lawsuits are likely down the road.
There are also lawsuits pending against actual advertisers who pay adware companies to have their ads pop up when Internet users log on to a competitor's Web site. Trademark owners claim that when pop-up ads for competitors appear on computer screens superimposed over their [the tradmark owners] Web sites, the adware companies are trading on the goodwill of the trademarks and are diverting users from the owners' Web sites. LL Bean currently has a lawsuit pending against Nordstrom and JCPenney accusing them of trademark infringement by placing pop-up ads over its Web site.
Portal Power: Finally, the prediction is that Google will become more of a portal like MSN and Yahoo, with numerous new applications, including instant messaging, currently in beta testing.
More information at Guardian eCommerce.
Brought to you by the Guardian eCommerce Safe Site Approval And Privacy Seal Program.
Rumors abound about what will come next for major players in search. Some believe Google is preparing to launch a free Internet telephone service in the United Kingdom. Others say Google will acquire an RSS (Really Simple Syndication) aggregator. Still others say Yahoo will enter the blogosphere with a strategic acquisition.
Why so much focus on Google? Because it's the 800-pound gorilla, serving 47 percent of the search market, according to Nielson//NetRatings. Yahoo serves 21 percent and MSN handles 13 percent. However, that market share is not exclusive. Nielson says there is crossover. Fifty-eight percent of searchers also say they use Yahoo and MSN.
Sponsored Links : Let the search wars continue. We've seen toolbars, pop-up ad blockers and even spyware associated with search in efforts to instill user loyalty. However, as competition increases, experts say more changes are coming-and quickly.
Analysts say those changes will include sponsored links that go beyond portals, Google's move towards becoming a portal, and legal issues that could stymie Google and the rest of the industry.
As smaller innovators have emerged with new products, and continue to seek out new dimensions to expand the business, search advertising is increasingly moving off the search page and onto other types of Web pages, according to Lance Podell, president of Kanoodle, a provider of sponsored links for search and content.
The biggest companies in search are effectively locked in to providing keyword search-based services for advertisers, but advertisers are looking to place sponsored links in other parts of the Web to increase their reach and extend their marketing programs.
The blogosphere is the next probable venue for sponsored advertising, Andy Beal, vice president of search marketing for WebSourced, a search engine marketing firm, told the E-Commerce Times. He agrees with Podell about more interest in sponsored links. Blogs will continue to evolve and the opportunity for targeted marketing comes into play as advertising becomes a part of Really Simple Syndication feeds.
This, analysts said, is a key motive for search engines to host blogs and why some speculate that Yahoo will acquire Six Apart, a Web logging software and service company, this year. However, Google and its Blogger are still the prophesied blog champs of 2005.
Google and the Legal Landscape: While Google is the undisputed king of search, it is losing some momentum in the legal arena, and experts said this has implications for the entire search industry.
Among the most significant legal cases to keep an eye on this year are lawsuits against Google claiming the search engine violates trademark law by allowing advertisers to select keywords that will cause those ads to appear on results pages for searches of the trademark.
A judge recently ruled in Google's favor in a Virginia lawsuit filed by Geico. The suit alleged Google was allowing other auto insurers to use "Geico" as a keyword that would trigger their ads.
On the other hand, French courts are finding against Google in similar lawsuits filed there.
Sheldon Klein, an intellectual property lawyer at Arent Fox in Washington, D.C., told the E-Commerce Times more similar lawsuits are likely down the road.
There are also lawsuits pending against actual advertisers who pay adware companies to have their ads pop up when Internet users log on to a competitor's Web site. Trademark owners claim that when pop-up ads for competitors appear on computer screens superimposed over their [the tradmark owners] Web sites, the adware companies are trading on the goodwill of the trademarks and are diverting users from the owners' Web sites. LL Bean currently has a lawsuit pending against Nordstrom and JCPenney accusing them of trademark infringement by placing pop-up ads over its Web site.
Portal Power: Finally, the prediction is that Google will become more of a portal like MSN and Yahoo, with numerous new applications, including instant messaging, currently in beta testing.
More information at Guardian eCommerce.
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Tuesday, March 08, 2005
Google Adding Web Reviews to Local Search
In the latest example of how rapidly search marketing is evolving, Google has said it will feature more editorial-style reviews in its Local Search product. The search giant formally launched Google Local today and said it will use its search technology to return more results with Web sites that offer third-party information about businesses related to keywords being searched for.
Reviews that contain basic information, such as hours of operation and services and features such as Wi-Fi Internet access, will be included, as will those giving positive or negative ratings on a location or business. The reviews, which Google announced at the Search Engine Strategies show in New York, will be just part of the local search results, which Google has said would also lean heavily on its new map search tools.
The local reviews will mimic those Google added in its shopping search site, Froogle. Within Google Local, the reviews include a red, yellow or green icon to indicate if a review was negative or positive.
The addition of reviews and maps underscore how important search companies feel it is to offer as much information and different types of information to customers as possible.
Google, like rivals such as Yahoo and AOL, have high hopes for local search, which could unlock huge revenue opportunities by creating targeted, less expensive search marketing products that could be customized for local businesses. Currently, the vast majority of paid search revenue comes from major corporations.
More information at Guardian eCommerce.
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Reviews that contain basic information, such as hours of operation and services and features such as Wi-Fi Internet access, will be included, as will those giving positive or negative ratings on a location or business. The reviews, which Google announced at the Search Engine Strategies show in New York, will be just part of the local search results, which Google has said would also lean heavily on its new map search tools.
The local reviews will mimic those Google added in its shopping search site, Froogle. Within Google Local, the reviews include a red, yellow or green icon to indicate if a review was negative or positive.
The addition of reviews and maps underscore how important search companies feel it is to offer as much information and different types of information to customers as possible.
Google, like rivals such as Yahoo and AOL, have high hopes for local search, which could unlock huge revenue opportunities by creating targeted, less expensive search marketing products that could be customized for local businesses. Currently, the vast majority of paid search revenue comes from major corporations.
More information at Guardian eCommerce.
Brought to you by the Guardian eCommerce Safe Site And Privacy Seal Program.
Monday, March 07, 2005
Phishers Chip Away at Web Security
Nearly 13,000 new phishing e-mails and more than 2,500 phishing Web sites were spotted last month, the Anti-Phishing Working Group (APWG) has reported.
Phishing uses e-mails designed to lure Internet users to counterfeit Web sites which attempt to trick them into divulging personal financial data such as credit card numbers.
47 Percent More Sites: By hijacking the trusted brands of well known banks and online retailers, phishers are able to convince up to 5 percent of surfers to respond and leave themselves open to identity theft and financial loss, the APWG warned.
Some 2,560 unique phishing sites were reported in January, a jump of 47 percent over December (1,740) and more than double the number reported in October (1,186).
There were 12,845 unique phishing e-mail messages reported, representing a "substantial increase" of 42 percent over December's figure.
Around 140 different brands have been hijacked since November 2003. The average phishing site will stay online for just 5.8 days, with the most long-lived lasting for 31 days.
The most targeted industry sector continues to be financial services, the APWG said, accounting for 80 percent of all hijacked brands in January.
US on Top: The U.S. continues to be the top location for hosting phishing sites, at 32 percent. Other top countries include China (13 percent) and Korea (10 percent).
The APWG said that malicious Web sites are also attempting to install password-stealing keyloggers, using several browser vulnerabilities to install and run code on PCs that access a Web site.
Brought to you by the Guardian eCommerce Safe Site And Privacy Seal Program, and ET.
Phishing uses e-mails designed to lure Internet users to counterfeit Web sites which attempt to trick them into divulging personal financial data such as credit card numbers.
47 Percent More Sites: By hijacking the trusted brands of well known banks and online retailers, phishers are able to convince up to 5 percent of surfers to respond and leave themselves open to identity theft and financial loss, the APWG warned.
Some 2,560 unique phishing sites were reported in January, a jump of 47 percent over December (1,740) and more than double the number reported in October (1,186).
There were 12,845 unique phishing e-mail messages reported, representing a "substantial increase" of 42 percent over December's figure.
Around 140 different brands have been hijacked since November 2003. The average phishing site will stay online for just 5.8 days, with the most long-lived lasting for 31 days.
The most targeted industry sector continues to be financial services, the APWG said, accounting for 80 percent of all hijacked brands in January.
US on Top: The U.S. continues to be the top location for hosting phishing sites, at 32 percent. Other top countries include China (13 percent) and Korea (10 percent).
The APWG said that malicious Web sites are also attempting to install password-stealing keyloggers, using several browser vulnerabilities to install and run code on PCs that access a Web site.
Brought to you by the Guardian eCommerce Safe Site And Privacy Seal Program, and ET.
Friday, March 04, 2005
Yahoo to Celebrate 10th Anniversary
Co-founders Jerry Yang and David Filo parlayed Yahoo from a college hobby into a full-time job 10 years ago, but the Internet icon was never quite comfortable with the happy-go-lucky mood of the dot-com boom.
It's not that Yang and Filo don't like to have fun. After all, they gave their company a name often associated with rubes and adopted a joyful yodel as their calling card. "We were certainly not sophisticated or civilized," Yang joked during an interview with The Associated Press ahead of this Wednesday's anniversary of Yahoo's inception.
Contrarian Concept: What separated Yahoo's creators from the rest of the dot-com crowd was their desire to create a profitable business as quickly as possible -- a contrarian concept back in those days of economic delirium. The philosophy enabled Yahoo to begin making money in less than 10 months, and also fueled the Sunnyvale, California-based company's resounding comeback from the dot-com bust that obliterated hundreds of other Internet businesses.
"We have always built the company around profitability," Yang said. "When we're not profitable, it's terrible."
The partners discovered early on that being frugal isn't necessarily boring. One reason Yahoo's offices have always been painted in vibrant purple-and-yellow is because they were the cheapest colors available. "They have always been more interested in pouring money into developing new products than spending frivolously on decorations and office supplies," said Erin Moore, a Yahoo product manager who joined the company in April 1996 when there were just 50 employees.
Yang, 36, and Filo, 38, became billionaires long ago, but they have stuck around as the "Chief Yahoos" at the company because they are eager to continue innovating and increasing profits.
"It's immensely more challenging to get to $10 billion in revenue than it was to get to $10 million in revenue," Filo said. "That's why we are still here today. The problems have gotten harder, the challenges have gotten bigger and it's gotten more exciting." Yahoo has grown from a handful of employees to more than 7,600 workers today, but Moore said the company's "work hard, play hard" culture has remained intact.
Profit-Conscious Approach: In between the long hours required to run the world's most popular Web destination, Yahoo's employees unwind by playing basketball, volleyball, bocce ball and even dodgeball at the corporate campus. There's a similar ethic going on a few miles to the north at Google, a fierce rival that Yang and Filo helped inspire. Yahoo doesn't pamper its workers as extravagantly as Google, which feeds its employees breakfast, lunch and dinner and even arranges to have their oil changed for free.
No one eats for free at Yahoo, although the company subsidizes the cafeteria prices. Yahoo is also inviting all registered users in the United States to download a coupon for a free scoop of ice cream on March 2 from Baskin-Robbins in celebration of its 10th anniversary.
Yahoo's profit-conscious approach has paid off handsomely, particularly for its founders. Filo still owns 6.4 percent of Yahoo's stock -- a stake worth $2.8 billion. Having sold more of his holdings through the years, Yang owns a 4.8 percent stake worth $2.1 billion.
Yahoo already has amassed an audience of 345 million, including 165 million registered users who rely on the company's Web sites for e-mail, e-commerce, news, entertainment, driving directions, matchmaking, weather forecasts, job leads and search results.
The company believes it can become an even more vital information and entertainment hub as wireless and broadband technology changes how people interact with media, but Yahoo's leadership on the Internet isn't necessarily secure. Google, which got $10 million in early financing from Yahoo, looms as a formidable threat, and Microsoft's MSN and Time Warner's AOL have also ramped up their Web portals.
Yang and Filo are used to skeptics -- they've been shadowed by doubters ever since they began compiling a list of their favorite Web sites while procrastinating on their electrical engineering graduate work at Stanford University.
Still Influential: "People gave us no chance of success 10 years ago," Filo said. "We have a lot of competition as always, but now we have got ourselves in a leadership position where our future success is really up to us." Yahoo wasn't the Internet's first commercial success -- that honor went to Web browser pioneer Netscape Communications, which became a division of AOL after being crushed by Microsoft. But Yahoo remains among the small handful of still-influential survivors from the dot-com mania's early days.
"Yahoo really defined an era," said technology industry analyst Rob Enderle, who has followed Yahoo since it started. "They are the ones who set the tone for the Internet." And Yahoo still defines the Net experience for latest generation of Web surfers, people like Jeremy Alicandri, 22, who have grown up with Yahoo.
While he was still in high school, he used $800 of his savings to start an online store, simplycheap.com, through Yahoo's e-commerce channel. The site now has eight employees and $2.4 million in annual sales, Alicandri said. "Yahoo is the Internet to me. I do almost everything through them," he said.
Neither Yang nor Filo thought they would have such a big impact when they raised their first $1 million to fund the startup and hired technology industry veteran Tim Koogle as chief executive. Yahoo's initial public offering of stock in April 1996 helped fuel the gold rush psychology that spawned dozens of Internet startups flush with venture capital.
Dot-Com Crash: Much of that money was spent advertising on Yahoo's Web site, pushing the company's annual sales above $1 billion and its market value beyond $120 billion.
"We felt things were probably a little too good," Yang said. "You could see things were a little too frothy."
Then came the crash. One-third of Yahoo's revenue evaporated in a single year, saddling the company with a succession of quarterly losses. Its market value shrank to $4.6 billion at one point.
Determined to stop the bleeding, Yang and Filo recruited entertainment industry veteran Terry Semel to replace Koogle in May 2001. The shakeup included hundreds of layoffs, amplifying talk that Yahoo was being cleaned up for a desperation sale.
Semel is widely credited for engineering Yahoo's comeback by creating new subscription services to diversify Yahoo's revenue beyond advertising, and about $2.5 billion in acquisitions have added more firepower to the company's arsenal. The turnaround produced an $840 million profit on sales of $3.57 billion last year, lifting Yahoo's market value back to about $50 billion.
It wouldn't have happened, Semel said, without Yang and Filo. "They are the pioneers, the guys who have made it possible for us to do the things that had never been done before," Semel said. "But it's not like they walk into work acting like this is the company that they started. They are always looking at what they can do as part of the team to make Yahoo more relevant in people's lives."
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program and ET.
It's not that Yang and Filo don't like to have fun. After all, they gave their company a name often associated with rubes and adopted a joyful yodel as their calling card. "We were certainly not sophisticated or civilized," Yang joked during an interview with The Associated Press ahead of this Wednesday's anniversary of Yahoo's inception.
Contrarian Concept: What separated Yahoo's creators from the rest of the dot-com crowd was their desire to create a profitable business as quickly as possible -- a contrarian concept back in those days of economic delirium. The philosophy enabled Yahoo to begin making money in less than 10 months, and also fueled the Sunnyvale, California-based company's resounding comeback from the dot-com bust that obliterated hundreds of other Internet businesses.
"We have always built the company around profitability," Yang said. "When we're not profitable, it's terrible."
The partners discovered early on that being frugal isn't necessarily boring. One reason Yahoo's offices have always been painted in vibrant purple-and-yellow is because they were the cheapest colors available. "They have always been more interested in pouring money into developing new products than spending frivolously on decorations and office supplies," said Erin Moore, a Yahoo product manager who joined the company in April 1996 when there were just 50 employees.
Yang, 36, and Filo, 38, became billionaires long ago, but they have stuck around as the "Chief Yahoos" at the company because they are eager to continue innovating and increasing profits.
"It's immensely more challenging to get to $10 billion in revenue than it was to get to $10 million in revenue," Filo said. "That's why we are still here today. The problems have gotten harder, the challenges have gotten bigger and it's gotten more exciting." Yahoo has grown from a handful of employees to more than 7,600 workers today, but Moore said the company's "work hard, play hard" culture has remained intact.
Profit-Conscious Approach: In between the long hours required to run the world's most popular Web destination, Yahoo's employees unwind by playing basketball, volleyball, bocce ball and even dodgeball at the corporate campus. There's a similar ethic going on a few miles to the north at Google, a fierce rival that Yang and Filo helped inspire. Yahoo doesn't pamper its workers as extravagantly as Google, which feeds its employees breakfast, lunch and dinner and even arranges to have their oil changed for free.
No one eats for free at Yahoo, although the company subsidizes the cafeteria prices. Yahoo is also inviting all registered users in the United States to download a coupon for a free scoop of ice cream on March 2 from Baskin-Robbins in celebration of its 10th anniversary.
Yahoo's profit-conscious approach has paid off handsomely, particularly for its founders. Filo still owns 6.4 percent of Yahoo's stock -- a stake worth $2.8 billion. Having sold more of his holdings through the years, Yang owns a 4.8 percent stake worth $2.1 billion.
Yahoo already has amassed an audience of 345 million, including 165 million registered users who rely on the company's Web sites for e-mail, e-commerce, news, entertainment, driving directions, matchmaking, weather forecasts, job leads and search results.
The company believes it can become an even more vital information and entertainment hub as wireless and broadband technology changes how people interact with media, but Yahoo's leadership on the Internet isn't necessarily secure. Google, which got $10 million in early financing from Yahoo, looms as a formidable threat, and Microsoft's MSN and Time Warner's AOL have also ramped up their Web portals.
Yang and Filo are used to skeptics -- they've been shadowed by doubters ever since they began compiling a list of their favorite Web sites while procrastinating on their electrical engineering graduate work at Stanford University.
Still Influential: "People gave us no chance of success 10 years ago," Filo said. "We have a lot of competition as always, but now we have got ourselves in a leadership position where our future success is really up to us." Yahoo wasn't the Internet's first commercial success -- that honor went to Web browser pioneer Netscape Communications, which became a division of AOL after being crushed by Microsoft. But Yahoo remains among the small handful of still-influential survivors from the dot-com mania's early days.
"Yahoo really defined an era," said technology industry analyst Rob Enderle, who has followed Yahoo since it started. "They are the ones who set the tone for the Internet." And Yahoo still defines the Net experience for latest generation of Web surfers, people like Jeremy Alicandri, 22, who have grown up with Yahoo.
While he was still in high school, he used $800 of his savings to start an online store, simplycheap.com, through Yahoo's e-commerce channel. The site now has eight employees and $2.4 million in annual sales, Alicandri said. "Yahoo is the Internet to me. I do almost everything through them," he said.
Neither Yang nor Filo thought they would have such a big impact when they raised their first $1 million to fund the startup and hired technology industry veteran Tim Koogle as chief executive. Yahoo's initial public offering of stock in April 1996 helped fuel the gold rush psychology that spawned dozens of Internet startups flush with venture capital.
Dot-Com Crash: Much of that money was spent advertising on Yahoo's Web site, pushing the company's annual sales above $1 billion and its market value beyond $120 billion.
"We felt things were probably a little too good," Yang said. "You could see things were a little too frothy."
Then came the crash. One-third of Yahoo's revenue evaporated in a single year, saddling the company with a succession of quarterly losses. Its market value shrank to $4.6 billion at one point.
Determined to stop the bleeding, Yang and Filo recruited entertainment industry veteran Terry Semel to replace Koogle in May 2001. The shakeup included hundreds of layoffs, amplifying talk that Yahoo was being cleaned up for a desperation sale.
Semel is widely credited for engineering Yahoo's comeback by creating new subscription services to diversify Yahoo's revenue beyond advertising, and about $2.5 billion in acquisitions have added more firepower to the company's arsenal. The turnaround produced an $840 million profit on sales of $3.57 billion last year, lifting Yahoo's market value back to about $50 billion.
It wouldn't have happened, Semel said, without Yang and Filo. "They are the pioneers, the guys who have made it possible for us to do the things that had never been done before," Semel said. "But it's not like they walk into work acting like this is the company that they started. They are always looking at what they can do as part of the team to make Yahoo more relevant in people's lives."
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program and ET.
Wednesday, March 02, 2005
Internet Commerce Growing Despite Fraud Concerns
E-commerce continues to grow dramatically in spite of security threats, recent research indicates. E-commerce dollar volume in 2004 rose 88 percent and transaction volume grew by 39 percent over the previous year, according to Verisign's latest Internet Security Intelligence Briefing.
The VeriSign report monitors trends in Internet usage, commerce, fraud and security threats. The briefing points to increased customer confidence, growing broadband Internet access penetration across the United States, the availability of more inexpensive goods on the Internet, and an increasing number of rural customers shopping online for goods they cannot buy locally as drivers of increased e-commerce. The biggest surprise in this year's Internet Security Intelligence Briefing was the dramatic sales increase in 2004.
Staying Atop Security: With greater opportunity comes greater challenges, however, as both humans and worms continue to scan for systems that are not patched against common exploits.
Worm propagation attempts, such as "MS-SQL version overflow" and "MS-PCT Client Hello overflow" still generate the majority of the security events, according to VeriSign. During the fourth quarter of 2004, VeriSign counted more than 680,000 "MS-SQL version overflow" attempts and over 375,000 "MS-PCT Client Hello overflow" attempts.
The VeriSign report reveals that most security events originate in the United States. During the period October 2004 to January 2005, the U.S. generated 79 percent of fraudulent transactions, followed by Canada (5.7 percent), Taiwan (2.6 percent), Korea (2.5 percent) and the UK (2.4 percent).
Security threats are leading merchants and consumers alike to look for measures to protect both ends of the transaction. The verifications of secured sites reached more than 9 million per day in the fourth quarter of 2004 alone, indicating a strong demand among Web site operators for security seals and the increasing propensity of online shoppers to conduct transactions only with secured Web sites.
Combatting Fraud: Romania, Vietnam, and the U.S. were the top source countries for total volume of e-commerce fraud over the 2004 holiday period; Belarus, Slovenia and Vietnam were the top countries for internal percentage of fraudulent transactions.
"Merchants are employing more automated fraud protection," Fraser Smith, product manager with VeriSign payment services, told the E-Commerce Times. "But they are also using human intuition as the decision maker. Our study shows that 84 percent of the transactions reviewed by humans were accepted. Only six percent of overall e-commerce transactions were deemed too risky to complete."
Facing Phishing: VeriSign also addresses one of the latest security threats: phishing. The briefing reveals that 58 percent of phishing capture sites were located outside of the U.S. during the October 2004 to January 2005 period, up from 37 percent reported for the first half of 2004. Griffiths said this increase is due to better efforts at shutting down capture sites in the U.S., and the comparative difficulty of shutting down capture sites abroad.
Internet Traffic Still Rising: As security experts strive to implement practices and procedures that will curb fraud, Internet traffic and usage is evidence that consumers appreciate these efforts. Domain Name System (DNS) queries in the fourth quarter of 2004 fluctuated between 380 and 400 billion per month, a whopping 80 billion queries higher than December 2003. In 2004, the .com top-level domain grew over 25 percent, while .net grew over 20 percent, showing continued demand and usage of these domains.
Still, security experts agree there is more work to be done.
More information at Guardian eCommerce.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
The VeriSign report monitors trends in Internet usage, commerce, fraud and security threats. The briefing points to increased customer confidence, growing broadband Internet access penetration across the United States, the availability of more inexpensive goods on the Internet, and an increasing number of rural customers shopping online for goods they cannot buy locally as drivers of increased e-commerce. The biggest surprise in this year's Internet Security Intelligence Briefing was the dramatic sales increase in 2004.
Staying Atop Security: With greater opportunity comes greater challenges, however, as both humans and worms continue to scan for systems that are not patched against common exploits.
Worm propagation attempts, such as "MS-SQL version overflow" and "MS-PCT Client Hello overflow" still generate the majority of the security events, according to VeriSign. During the fourth quarter of 2004, VeriSign counted more than 680,000 "MS-SQL version overflow" attempts and over 375,000 "MS-PCT Client Hello overflow" attempts.
The VeriSign report reveals that most security events originate in the United States. During the period October 2004 to January 2005, the U.S. generated 79 percent of fraudulent transactions, followed by Canada (5.7 percent), Taiwan (2.6 percent), Korea (2.5 percent) and the UK (2.4 percent).
Security threats are leading merchants and consumers alike to look for measures to protect both ends of the transaction. The verifications of secured sites reached more than 9 million per day in the fourth quarter of 2004 alone, indicating a strong demand among Web site operators for security seals and the increasing propensity of online shoppers to conduct transactions only with secured Web sites.
Combatting Fraud: Romania, Vietnam, and the U.S. were the top source countries for total volume of e-commerce fraud over the 2004 holiday period; Belarus, Slovenia and Vietnam were the top countries for internal percentage of fraudulent transactions.
"Merchants are employing more automated fraud protection," Fraser Smith, product manager with VeriSign payment services, told the E-Commerce Times. "But they are also using human intuition as the decision maker. Our study shows that 84 percent of the transactions reviewed by humans were accepted. Only six percent of overall e-commerce transactions were deemed too risky to complete."
Facing Phishing: VeriSign also addresses one of the latest security threats: phishing. The briefing reveals that 58 percent of phishing capture sites were located outside of the U.S. during the October 2004 to January 2005 period, up from 37 percent reported for the first half of 2004. Griffiths said this increase is due to better efforts at shutting down capture sites in the U.S., and the comparative difficulty of shutting down capture sites abroad.
Internet Traffic Still Rising: As security experts strive to implement practices and procedures that will curb fraud, Internet traffic and usage is evidence that consumers appreciate these efforts. Domain Name System (DNS) queries in the fourth quarter of 2004 fluctuated between 380 and 400 billion per month, a whopping 80 billion queries higher than December 2003. In 2004, the .com top-level domain grew over 25 percent, while .net grew over 20 percent, showing continued demand and usage of these domains.
Still, security experts agree there is more work to be done.
More information at Guardian eCommerce.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Tuesday, March 01, 2005
Online Orders Boost Home-Delivery Sales
Online orders accounted for more than a quarter of sales in the fast-growing home delivery sector last year, according to research.
Retail analyst Verdict Research says home-delivery purchasing grew by 5.9 percent during 2004, ahead of the 4.2 percent increase in the UK retail sector as a whole. One pound in every seven is spent on goods delivered to the home. Some 27.4 percent of sales were online, ahead of TV shopping at 14.6 per cent and door-to-door business at 13 percent.
Implications for Retailers: the growth of home sales has implications for retailers and their suppliers providing the delivery service. Most retailers see the fulfillment operation as just another supplier service when they should be building them into their operations more strategically.
And, as shoppers become increasingly tech-savvy in their shopping methods, the report suggests they are also more demanding. The survey identifies a growing expectation for free delivery, but customers are likely to blame the retailer regardless of failures on the part of the third-party delivery service.
Growth Foreseen: Verdict expects the home delivery market to grow by a further 5.7 percent this year, compared with 3.9 percent total retail growth, and predicts the extra margin of growth will increase as consumers' shopping habits and greater underlying income evolve away from traditional shopping methods.
Patrick Wall, chief executive of delivery management software supplier Metapack says retailers need to gain as much control of delivery and dispatch management as they do developing online channels. "You need visibility at three different levels of the supply chain," he said. "The direct dispatch system, a Web-based browser dispatch and courier system that automatically generates purchase requests and confirmations, and a fully integrated stock management system at the other end."
More information at Guardian eCommerce.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Retail analyst Verdict Research says home-delivery purchasing grew by 5.9 percent during 2004, ahead of the 4.2 percent increase in the UK retail sector as a whole. One pound in every seven is spent on goods delivered to the home. Some 27.4 percent of sales were online, ahead of TV shopping at 14.6 per cent and door-to-door business at 13 percent.
Implications for Retailers: the growth of home sales has implications for retailers and their suppliers providing the delivery service. Most retailers see the fulfillment operation as just another supplier service when they should be building them into their operations more strategically.
And, as shoppers become increasingly tech-savvy in their shopping methods, the report suggests they are also more demanding. The survey identifies a growing expectation for free delivery, but customers are likely to blame the retailer regardless of failures on the part of the third-party delivery service.
Growth Foreseen: Verdict expects the home delivery market to grow by a further 5.7 percent this year, compared with 3.9 percent total retail growth, and predicts the extra margin of growth will increase as consumers' shopping habits and greater underlying income evolve away from traditional shopping methods.
Patrick Wall, chief executive of delivery management software supplier Metapack says retailers need to gain as much control of delivery and dispatch management as they do developing online channels. "You need visibility at three different levels of the supply chain," he said. "The direct dispatch system, a Web-based browser dispatch and courier system that automatically generates purchase requests and confirmations, and a fully integrated stock management system at the other end."
More information at Guardian eCommerce.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
