Norvestor to bundle Seat24 and SRG Online

Private equity group Norvestor IV, L.P. (Norvestor) has just acquired two succesful online travel agencies, Seat24 Travel AB and SRG Online AB.

These two companies will be combined into a new holding: European Travel Interactive AB (ETI). ETI represents the brands Seat24, Supersaver, Flygvaruhuset, EasyT, Marco Polo, Töölö, Gullivers, Flygcentrum, Travelfinder. ETI operates in 6 countries (Norway, Sweden, Denmark, Finland, Spain and Holland )and have virtual websites in 9 additional markets.

Both Seat24Travel AB and SRG Online are online travel agencies operating mainly on the Internet. Most of the transactions are done online, giving the consumer a vast area of choices for satisfying their travel needs. The two companies have combined a market share of about 30% in the Nordic countries and 1 million members.

Total revenues of ETI amount to approximately SEK 2.6 billion (€278 million) in 2007.

Checking out e-commerce in Spain… probably not!

Hi, don’t expect any new articles on my weblog in the next two weeks, I am on a well-deserved holiday (at least I think it is). I will be lying on the beach somewhere in Spain! So, when I return you can expect some new insights on Spanish e-commerce from me, but probably not .

Adiós amigos!

Compare Group to shift to market driven CPC

Every comparison engine in the world basically uses two ways to invoice their merchants; either on a CPC (cost-per-click) basis or on a CPS (cost-per-sale) basis. I have talked about the advantages (and disadvantages) before but I will briefly explain that again:

• CPC: favored by comparison engines because it is transparent and it can be measured by both parties. CPC however poses more risks for the merchant, as they are uncertain on how the visitors will convert on their website. But, CPC puts the risk where it should be.
• CPS: favored by merchants, as their risk is zero. If visitors convert, then they have to pay the comparison engine. The comparison engines are dependent on the merchant for conversion numbers. This is quite a tricky model as comparison engines cannot be held responsible for ‘crappy’ navigation on the website of the merchant, wrong links in datafeeds, servers that are down, etc. CPS thus shifts a lot of the risk to the comparison engine, but they are not capable of mitigating or handling that risk. Therefore we believe this model is not the one to go for as a comparison engine.

Large take-over pending in Dutch e-tail sector

Rumors are getting more prominent that a possible take-over is at hand in The Netherlands. As the companies involved are probably still in secretive negotiations I am quite reluctant in revealing the company names. But these companies are quite big and well-known in the Dutch e-tail sector. If you know which companies I am talking about, then I invite you to comment on this article .

Investment frenzy for gaming companies?

A few days after the funding announcement from Germany’s browser gaming company Northworks Software by ICS and the investment of Accel (London branche) in Gameforge (also German), another Internet gaming company has secured new funds.

Spill Group, a Dutch specialist in casual game traffic generation, has raised an investment from Van den Ende & Deitmers’s Crossmedia Fund. The size of the deal has not been disclosed but the investor secured a “substantial minority” stake in the company. Using the new funds, Spill Group expects to further develop and acquire other game companies, portals and game community concepts to accelerate its international growth. A first example of this strategy was Spill Group’s recent acquisition of the Hispanic game traffic domain Juegos.com.

Back in 2006 Zylom (Dutch) was already acquired by Real Networks (also funded by Accel).

Short statistics about the companies mentioned:

• Gameforge is claiming to have 6 million active players and 40 million users in total on its games
• Zylom claims to have 10 million monthly visitors
• Spill Group currently generates approximately 40 million monthly unique visitors who play in total more than 1,5 billion times a game per month

Critics growing for comparison engines?

A survey by UK cashback website Quidco (something like Jellyfish in the US) has found that one in three British consumers have stopped using price comparison sites, with a further 47% put off by ‘biased’ results. The consumers are reportedly concerned that results on these sites are displayed according to which company pays the most for their listings.

Other findings from the survey, which was conducted by Tickbox.net and polled 1,652 British adults in June and July in 2007, included:

• One in three shoppers go directly to specific websites, while the remaining 70% start their online shopping with a search engine, cashback or comparison site.
• Customers value service more than security – just 23% said security was a concern when shopping online, while just 5% cared whether the site was easy to use. Good customer service was the key for 65% of respondents.

The just mentioned Quidco and Jellyfish are comparison engines that work on a cost-per-sale (CPS) based principle. So when a customer actually buys a product, they get paid by the merchant. This is quite different from other comparison engines that work on a cost-per-click (CPC) basis. For a merchant obviously the CPS model is in favor, because this imposes no risk for them at all.

I must agree that comparison engines who display results according to who pays the most for their listings are in turmoil. A site in The Netherlands that works according to this principle is Kelkoo.nl. They are experiencing a lower reach month after month (see graph below):

Data is provided by the STIR.

Web Trend Map 2007

Ok, I must admit that this post is more fun than that it will give you more insight in e-commerce. But hey, perhaps you will stumble upon some great sites anyway, which will open your eyes or give you some great new ideas!

iA have managed to fit in the 200 most successful websites on the web, ordered by category, proximity, success, popularity and perspective. The new trend map features much more websites than the previous one. The focus is still on English language websites (because that is where it’s at), but iA have added some Japanese sites (a mystery to most of us foreigners), some German sites (yep, there are really some popular ones) and a Chinese line (the second Internet).

As I am Dutch the first thing I did was to check out some Dutch sites on the map… Well, it was hard to come up with one. The only one that comes close is the Dutch version of Wikipedia, bottom right corner. That probably isn’t the best place to be on the map ;-(

Go and see the interactive version! For more detailed information about this map and what they changed, visit Web Trend Map version 2 explanation page.

iA have used the Tokyo metro map, so if you have been to Tokyo you might see lots of little hints and sarcastic comments (Dave McClure explains some of them) hidden in there. Have fun with it!

If you can’t get enough about websites printed on to maps, then also try the World Web Map 2007. That one was created by Alexa and Comscore. Again, perhaps not very useful but I really appreciate the effort that has been put in!

Some valuable e-commerce tips?

Probably a lot of merchants are already aware of the tips I mention below, but I hope these will help beginning e-tailers and maybe even seasoned ones to grow their business online!

• Your business is all about repeat customers. If you want to be succesful, invest in them (give them coupons, free overnight shipping, next day delivery, etc.). Rather invest in that than spending marketing euro’s.
• Deliver. Always make sure your inventory is 100%. An unfulfilled order will make your customer unhappy. And be sure that this customer will tell that to his friends.
• Be aware of the power of word of mouth, it really works online. So it goes both ways, it can affect you positively and negatively.
• Do not compete on price. You can always undercut your competitors, but it doesn’t build loyalty. For the short term this is nice, but it will not be sustainable (unless you have found a way to make money in the long term and your competitors are not able to copy that).
• Locate your distribution centrally. This will enable you to deliver your products quick and at lower costs.
• Customer service is an investment and not an expense. This sounds simple but if you really believe in this, you will see that it will bring you real cash.

Ready for some advertiming?

A typo or a new buzz word? When I surf the Internet, it seems that combining two words into one compelling buzz word is hot, so why not try it myself! If you haven’t encountered such combinations yourself, here are a few to refresh your mind: metrosexual, transumers, trysumers, tryvertising, youniversal branding, crowdsourcing. And now I would like to introduce ‘advertiming’ (if it doesn’t exist already).

Timing a promotion or advertisement is nothing new for merchants. It is quite a bad idea to start your sale on the 24th of November (that is ‘buy nothing day‘). And it makes much more sense to promote a LCD or plasma television right before or during the Olympics or the world championships for soccer. That is also why merchants make use of the retail calendar. But what I am trying to say is that timing on a detailed level is just as important.

Our own statistics (across all our comparison engines) show that when it rains, we generate 10% more leads for our shops. However, when we have a great day (so sunny, no clouds and warm) we generate 20% less leads. So the effect of a great day is much higher than a bad day. So, having access to decent weather forecasting can be an important factor to increase sales.

Also, a Monday is traditionally the best day in terms of visitors and leads, with the Sunday evening gaining in importance. This effect can be explained by the fact that we (read: consumers) like to talk to each other during the weekend about what we are planning to buy. Friends and family members are used to make a sound decision. Then on Sunday evening we check some websites to gain even more information (like reading reviews). And, when we are at work again on Monday we make the decision to buy the product.

The world according to Internet…

The world around us is changing and it is changing rapidly. If your business is online, this map indicates where your potential customers live. The vast majority of them are outside the U.S. and living in Europe, Japan and South-Korea.

The map also indicates that Africa has other things to worry about right now, as well as large parts of Asia and Latin-America. Also in Internet terms these parts of the world can be considered to be the third world…

See this interactive map at Business 2.0.