October 23, 2000
Shopping 'bots' were supposed to unleash
brutal price wars. Why haven't they?
By ERIN WHITE
Only a couple of years after a flurry of Internet comparison-shopping
services, or "shopping bots," struck fear in the hearts of retailers, the
landscape has changed dramatically. Many of them have folded, are slowly
fizzling out, or have been acquired by retailers that co-opt the technology
to their own advantage.
Part of the scaling back among bots (Web slang for robots) can be
explained by the now-familiar tale of shakeout among Internet ventures. For
instance, Brandwise.com, a bot owned by Brandwise LLC, a New York
e-commerce concern, said in May it would shut down its consumer operations
and is now planning to provide e-commerce services and data to businesses.
Another site, Junglee.com, was bought by Seattle-based Amazon.com Inc. for $180 million
But analysts say the shopping bots also have been hindered by an
intrinsic problem: For all the new price-finding power they offer, people
just aren't in the habit of using them in regular commerce.
It's not that they're difficult to use. With a bot, a user simply types
in a desired product or service and gets back a list of Web retailers and
their prices. Within a matter of seconds or minutes, he or she can see the
lowest online prices for almost anything, be it a digital camera,
cubic-zirconium ring or rawhide dog treat.
Nonetheless, shoppers have found them simply too unfamiliar, analysts
say. "Retailers aren't that worried about them now," says Seema Williams, a
senior analyst at Forrester Research Inc., Cambridge, Mass. Bots have been
difficult to market, she says, because they are "a tough concept to
explain, and there's no offline equivalent. You know, [people ask] 'What's
a shopping bot, what is that, and what do they do?' "
Two Sites Pull Ahead
In the past six months, however, two sites have applied themselves to
the problem of consumers' unfamiliarity with bots, and seem to be proving
that it can be overcome. Israel-based DealTime.com Ltd. and mySimon.com,
owned by San Francisco-based CNET
Networks Inc., have launched intensive marketing and advertising
efforts, both on and off the Web, and watched their visitor numbers rise
"There is no offline equivalent" of bots, concedes Lance Podell,
marketing chief for DealTime. But a comparison-shopping site, he says, is
just a way of automating what consumers already do when they compare prices
while brick-and-mortar shopping. "It's the embodiment of the way consumers
shop anyway," he says.
After driving home that point in advertising campaigns, the two sites
began to pull away from two other bots -- BottomDollar.com, owned by
Network Commerce Inc., Seattle,
and closely held PriceScan.com Inc., of Malvern, Pa. -- that were
attracting significant traffic.
In November of last year, each of these four sites had between 609,000
and 803,000 unique (as opposed to repeat) visitors a month, according to
Media Metrix Inc., a New York firm that measures traffic to Web sites.
Then, in December, DealTime and mySimon traffic began to jump during the
holiday shopping rush. In July of this year, DealTime.com had 3.1 million
monthly unique visitors, and mySimon was pulling in 1.9 million. (DealTime
helped fortify its industry standing in May when it bought a rival bot,
Germany-based Evenbetter.com, from German media giant Bertelsmann AG.)
By contrast, PriceScan's traffic, at just above 450,000 by July, had
tapered off from November (although it was still more than double its
year-earlier figure of 224,000). BottomDollar's traffic, meanwhile, had
dropped by a smaller margin, to 670,000.
Off the Radar
At that same point in July, other sites weren't even hitting the radar
of Media Metrix, which uses 200,000 as a minimum measurement. These
included PriceGrabber.com Inc., Culver City, Calif.; Clickthebutton.com
Inc., New York; and Excite At Home Corp.'s Jango.
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Two strategies helped mySimon and DealTime establish their commanding
leads. In the short term, the holiday ad campaigns, each totaling around
$10 million in spending, raised consumer awareness at a key time for the
shopping sites. A longer-term strategy, analysts say, is that both
companies have signed deals that give them high-profile placement on
various Internet "portals," or Web sites that help direct users around the
In October 1999, DealTime began a marketing push aimed at increasing
consumer awareness of shopping bots in general and DealTime's service in
particular. It bought ads in newspapers, on television, on radio and on Web
sites. The company rented sightseeing buses in New York to shuttle weary
shoppers to major retail destinations. DealTime wrapped the buses in
advertising with the slogan: "Let us deal with it." It also rented out a
storefront haven next to Bloomingdale's in New York -- a flagship store of
Federated Department Stores Inc.,
Cincinnati -- where it set up rows of computers. There, DealTime staffers
passed out complimentary cookies, gloves and bottled water, suggested gift
ideas and helped shoppers use the computers to troll for bargains on the
Making It Real
"It really drove a lot of trial [use] during that period," says
DealTime's Mr. Podell. "Our supposition had always been if people use it a
few times, they'll be hooked." And the push, he says, helped put the bots
in real-world terms that consumers could easily grasp.
MySimon also spent nearly $10 million on a print, radio and television
ad campaign for the holiday season, using the slogan "The best in
Network Commerce has never devoted an ad campaign solely to
BottomDollar, says Dwayne Walker, chairman and chief executive of Network
Commerce, which owns the comparison-shopping site. In a written comment,
Mr. Walker says, "We have been highly focused on licensing BottomDollar to
other companies for them to use on their sites. Additionally, most
consumers access BottomDollar through the ShopNow.com site [a sister retail
site owned by Network Commerce]. While we have not ruled out advertising,
this strategy relies significantly less upon paid media than a
direct-to-consumer approach does."
PriceScan says it continually buys advertising but has never staged a
big TV blitz.
Meanwhile, as part of a push for more presence on Web portals, mySimon
in May signed a deal with USAToday.com, owned by media concern Gannett Co. of Arlington, Va.
Visitors to USAToday's shopping section who click on "Buyer's Guide" or
"Compare Prices" go directly to mySimon's site.
MySimon has other placement deals, including links at the search service
run by San Francisco-based LookSmart Ltd. and the information
site Britannica.com Inc., owned by Luxembourg-based Encyclopaedia
Britannica Holding SA. In addition, New York-based financial-services
behemoth Citigroup Inc. is paying mySimon
to build and maintain a co-branded shopping site. Nextcard Inc., a San Francisco
issuer of credit cards over the Net, has hired mySimon to do the same.
(MySimon, meanwhile, has been hit by an unrelated legal blow. In August,
a jury in Indianapolis federal district court found that mySimon's name
infringes the trademark of Simon Property Group, an Indianapolis-based
real-estate company. The jury awarded Simon Property Group $26.8 million in
damages. A judge hasn't ruled yet on the jury's finding, or on whether
mySimon will have to change its name. MySimon is planning to appeal.)
DealTime has also managed its own series of Web alliances. This past
summer it scored a prize distribution deal with America Online Inc., the Dulles,
Va., Internet giant. AOL uses DealTime's search technology -- which
retrieves and "cleans" information on products and pricing from retailers
and then places it in a database for consumers to tap -- in its shopping
section. In return, DealTime gets its name and a link on all the results
pages in a user's search. DealTime also has links listed on Web portals
LookSmart.com and iWon Inc., Irvington, N.Y., which is majority-owned by
Viacom Inc.'s CBS Corp., New York.
Epinions.com, owned by Epinions Inc., Brisbane, Calif., a site that offers
reviews on a seemingly endless range of products and services -- from books
and cars to restaurants and colleges -- also carries a DealTime link.
Other comparison-shopping services, meanwhile, have made far less of an
effort to be ubiquitous. PriceScan.com, for instance, doesn't have any
placement alliances. Instead, it relies on banner ads it buys on other Web
sites. It also provides the search technology for International Data
Group's WebShopper site.
BottomDollar.com has also refrained from placement deals with other
companies. Mr. Walker says the network of sites belonging to its owner,
Network Commerce, generates enough traffic. The site does, however, license
its search technology to more than 2,000 other sites.
Charging for Position
MySimon and DealTime have also been willing to supply a host of bells
and whistles to paying retailers.
For a price, mySimon gives merchants ad space on its site, higher
position in their retailer listings, and a chance to run a so-called
consumer-incentive message ("Buy Two, Get One Free!") next to product
listings. And mySimon also recently started a program for manufacturers
that lets them pay to have their products listed in a section of certain
DealTime also offers incentives to partner retailers, including
advertising packages and higher placement in listings.
Other bots don't go as far.
PriceScan does offer to sell some special treatment to retailers. For
instance, after a shopper selects a retailer, that merchant can pay extra
to arrange for a link that navigates the shopper to the specific page for
the desired product, rather than the retailer's home page.
But PriceScan won't accept payment from merchants for a higher ranking
in the search results. In fact, PriceScan plays up its policy of not doing
It also points out that, unlike some shopping bots -- most notably
Amazon.com's Junglee -- it's not beholden to a retail parent company.
"We're not owned by somebody who's trying to sell you something who
might restrict the products to make their own look cheaper," says Jeffrey
Trester, co-chief executive officer and co-founder of PriceScan. (After the
1998 purchase by Amazon.com, visitors to Junglee, by March 1999, could no
longer search the site for books or music -- two of the most frequently
purchased product lines on Amazon. Instead, people looking for those items
were immediately switched to Amazon's own "Shop the Web" section.)
A spokesman for Amazon dismisses the idea that the change limits
consumers' choice. Junglee doesn't exist as a separate entity, he says;
instead, it has been completely absorbed into Amazon. And by combining the
search technology with Amazon's retail offerings, "we're using it to help
them find what they want in the first place."
In striking deals, such as the one it has with AOL, DealTime has also
been helped by its head start on technology.
Many shopping services began by sending real-time queries -- or bots --
to retail sites in response to each customer request for pricing
information. DealTime didn't do that. Unlike many of its competitors,
DealTime started out three years ago as a developer of the database-search
technology that it now uses on its shopping site, which launched in June of
Not only do real-time queries bring back more buggy information, they
often take longer to perform than database searches. Today, many services
have either converted to a mostly database system or a combination of
real-time and database.
"It's pretty clear now to everyone," says Dan Ciporin, DealTime's
president and chief executive, "that this [database system] is the way it
needs to be done."
-- Ms. White is a staff reporter in The Wall
Street Journal's New York bureau.
Write to Erin White at