If you’ve followed this blog for a while, you’ll know that I’m not too impressed with Shopping.com at the moment. I think the company has incredible potential and after a wave of personnel changes (remember, it’s 6+ months after the eBay acquisition closed), Shopping.com should now be getting back to basics; providing a great user experience.

If you think I’ve been unfairly bearish on Shopping.com, it seems that I’m not the only one with this opinion. I think the eBay earnings call completely backs up my position.

-First, the announcement of eBay’s Q1 2006 results - the standard press release that eBay put on the wires - made Shopping.com look like the ugly step-child of eBay…

“Q1 was an excellent quarter for the company, with strong growth across our portfolio of businesses,” said Meg
Whitman, President and CEO of eBay Inc. “eBay, PayPal and Skype are successful businesses on their own,
and together they create additional opportunities for innovation and expansion.”

Is Meg saying that Shopping.com is not a successful business on its own? You can spin that any way you want, but that hurts.

-Second, Shopping.com’s revenue figures are now rolled into eBay’s US marketplace numbers. So not only are the earnings a mystery, but now revenue is hidden. If Shopping.com was reporting quality results, it would not be rolled up like this.

-Third, while revenue and earnings numbers were a no show, Shopping.com’s lofty expenses were actually highlighted:

“GAAP sales and marketing expenses totaled $400.6 million [for eBay], or 29% of net revenues, higher than the 26% reported in Q1-05. Excluding stock-based compensation of $24.7 million, sales and marketing expenses totaled $375.8 million in Q1-06, or 27% of net revenues. Sales and marketing expenses increased primarily due to the inclusion of Shopping.com in Q1-06.”

As for Shopping.com mentions in the eBay Q1 2006 conference call (as transcribed by the Internet Stock Blog):

“Shopping.com also performed well in Q1. Traffic was strong, which led to 33% year-over-year growth in clicks to our merchants, including continued traction in our international markets. Our integration efforts are also on track. EBay’s reviews and guides now include hundreds of thousands of Epinion reviews, and Shopping.com catalogs are being used to power a number of eBay categories. In addition, Shopping.com is being actively promoted to Pro Stores and PayPal merchants with promising early results.”

-33% Y/Y growth in clicks to merchants is a nice number, but it’s the wrong number to highlight. Anyone can get more traffic to merchants. Just sign up with Adware players who push your listings through toolbars. Or maybe buy more traffic on Google Adwords and Yahoo Search Marketing (and push up marketing expenses). What I want to see are conversion statistics. Merchants want sales, not traffic that they have to pay for on a per click basis with artificial price floors.

-It’s awesome to hear of integration between Epinions and eBay reviews. Epinions has a ton of great content which will be very valuable to eBay buyers.

-Shopping.com is being actively promoted to ProStores and PayPal merchants with promising early results. Have you heard anything about paypal.shopping.com? Can you find a mention of Shopping.com on PayPal? Maybe Meg is talking about the UK integration, but UK operations are a small fraction of Shopping.com’s business.

Bigger issue is that there’s no mention of Shopping.com being promoted to eBay merchants. Wasn’t that the original thinking behind the acquisition? eBay sellers were leaving the playground and marketing elsewhere, including on Shopping.com. Yes, ProStores integration is promising. Yes, PayPal integration has potential (although you’re going to have to spend money to push paypal.shopping.com). But I expected eBay integration - at least one email to an eBay’s ‘Buyitnow’ sellers offering free set up on Shopping.com and $50 in free clicks. Maybe now that eBay Express is live we’ll see that happen.

“Shopping.com continues to perform well, and our global footprint places us as one of the top online comparison shopping sites globally with over 35 million products and 325 categories for more than 8,000 retailers. “

-Definitely potential on the international front and Shopping.com will announce a launch very soon.