Bronte Media

Eric Chandler of Verizon Superpages at the Kelsey Conference relayed some interesting stats on user reviews of service providers.

The 80-20 rule holds up. 87% are positive reviews versus negative and neutral ones.

A consumer is 18% more likely to click on a business profile that has a review versus one without.

Eric managed to take a dig at the competition too. Quote from post: “Without much effort, SuperPages has already been able to generate 75,000 reviews. Of those, more than 83 percent are service-oriented, which differentiates SuperPages from review-centric Yellow Pages sites such as Judy’s Book and Insider’s Pages, which tend to be more entertainment and dining-oriented.”

I would have expected more than 75,000. I am also sure that there are funny numbers in the quotes. Pizza and restaurants are two of the most popular searched terms on Internet Yellow Pages sites, so why wouldn’t they represent the same % of reviews?

I was fooling around with Homethinking as usual, but mistyped the url, entering wwwhomethinking.com (no link love but I’m sure you can guess what the URL re-directs to from the title of this post).

A page full of real estate related sponsored links. Which an Italian named Sergio Cotanzo collects revenue from after registering the domain name a week and a half after we launched.

I am both appalled and somehow intrigued that there are people like Sergio in this world, sitting in his home in Piacenza preying off of the efforts (and stupidity) of people like me.

The larger folks like wwwyahoo.com and wwwgoogle.com seem to have it figured out. But other young startups like wwwindeed.com and wwwtrulia.com have been direct navigated as well.

Sergio, and other clowns like you, get a life.

I know it is a countless example of substitute-in-firm sponsors independent study that finds substitute-in-firm’s product is great. But real estate lead generation offers a unique way to track effectiveness by virtue of the county records and the article sparked an experiment on cost per lead versus cost per acquisition pricing in my mind.

The creatively named e-agent.biz, commissioned a research firm to look at 100,000 of its leads and found that one in five bought or sold in the six months after they filled in a lead form. No mention is made as to whether the lead used the recommended e-agent.biz agent or not.

From the article: “Real IQ then determined the validity of the leads by comparing names and addresses on those leads with residential property transactions subsequently recorded in public county records.”

I wont say one in five is a good number or not, but if you assume that half of the time the consumer goes with the recommended agent, then the conversion rate is 1 in 10. e-Agent’s web site says the average lead is $15. So they get effectively get $150 per transaction (again generous assumption about 1 in 2 engaging an e-agent may skew analysis).

Consider the average referal fee by the likes of realestate.com is ~$2000 (one quarter to one third of the agent’s commission), then even if the conversion rate is 1 in a 100, the CPA referral model is still more financial rewarding.

It is something I am pondering intensely at the moment, and I am sure lowermybills and Nextag are too - why not simply take more risk on and get a bigger cut (if they are confident in their audience)?

Continuing to feed its appetite of online lead generation and comparison shopping, Scripps has acquired uSwtich, a firm that helps consumers change power providers and which is branching out into other areas, for 210 million UK pounds (or approximately $16 billion-err $365m US dollars).

Brian has the wrap, including a guest perspective.

Also pertinent is a chat transcript with Farhad Mohat (also discovered through Brian, by the way), the founder of Shopzilla, in an online chat session he did at Wharton University. It is extremely candid (Mohat basically calls the VCs that invested in Shopzilla morons and says they sold too early and for too little). But he has good things to say about Scripps. That they freely admitted they didn’t know the comparison shopping space but were willing to learn with the team.

Scripps, along with Experian, are building out an enviable portfolio of online assets. Are they the next Google or Yahoo? No but they are the next InteractiveCorp.

Scripps also has focussed TV assets that mix well with the growing trends of VoD and the types of content people would pay to see on the Internet (how-to style programming).

With the uSwitch acquisition (and having zero idea about the company) they pick up on two of the most powerful online trends: decision-focused advertising and international (the single greatest financial driver of Yahoo and Google has been international markets catching up to the sophistication of the US).

Rupert and Malone watch out.

Naval Ravikant, founder of ePinions, legal tango partner to gregarious VC and their term sheets, has launched his new startup, Vast.com. Here is his introductory post and here is a thoughtful post by Peter Rip, an investor in the company.

Vast.com crawls the web and indexes classifieds. It is part Edgeio, part Oodle and part Google.

They capture the heart of the classifieds, like Oodle, they recognize a growing trend in some people wanting to post classifieds on their own blog/site and they are doing it in a generic, non-specific fashion (as opposed to folks like Oodle and indeed Homethinking, who use site specific adaptors).

It is quite a powerful idea. Even more powerful they don’t want people to come to their site, but rather they want existing sites to take their API and plug it into their own user bases. A Mercedes car club, for instance, could plug in Mercedes for sale from the cars API.

The idea is fascinating from an intellectual point of view, and the technology is quite amazing to be able to extract structured data generically (i.e. recognize a car for sale ad, is a car for sale ad from the raw page).

I just think it’s very hard to make work. That’s primarily because marketplaces have the wet-your-pants economics of buyers attracting more sellers and attracting more buyers. Everything is self-reenforcing.

New entrants can’t compete on price, because sellers are basically buying advertising and new entrants have no audience and existing ones (e.g. eBay) has everyone. They can raise prices because their audience is growing.

Also the classifieds industry is being destroyed and rebuilt by Craigslist, who does not have a profit motive. To me, any profit-motivated entrepreneur should be scared shitless by Craigslist. More so than Microsoft or Google. At least Google and Microsoft play by the rules of capitalism. Craigslist is quite happy to run at cost (which is a fantastically noble aim, by the way) and is making consumer to consumer transacting more efficient (the economic definition of efficiency is the erasing of profits from an industry).

But I’ll watch Vast with interest, they certainly are the most interesting company I have seen in the space so far.

Continuing on with Peter Krasilovsky day, he has just published a good profile of Yelp - a consumer written Yellow Pages firm.

There are a few good stats from the chat - 500k uniques in December and an average of $4-7 per call on the pay per call pricing (guessing most are restaurants).

They are changing from a purely pay per call model to a calls and clicks model, which their CEO Jeremy Stoppelman says is in an effort to mesh with other ad products like Citysearch but more likely is a case of yield management and getting a better return on each page served because pay per call pricing is immature.

Go and read the full profile.

That’s a rather extravagant-attention-getting headline, but at the core is some truth. Of course, McClatchey seems to be on the right course, stripping its Knight Ridder purchase of the vanity assets in larger slower growing markets (there’s sure to be a Silicon Valley exec who fancies himself a newspaper mogul, or at least a custodian of the local paper), and concentrating on direct marketing and the online assets.

Monster is a $6bn company now. McClatchey now has a one-third stake in CareerBuilder, which is nearly equal to Monster and has greater momentum.

For those Mathematicians out there, they’ll know that 1/3 of $6bn (assuming Careerbuilder equals Monster at this point in time) doesn’t equal the $4.5bn that McClatchey paid. But it’s a big part of the deal and no one has mentioned, more than in passing, the significance of the stake. Careerbuilder will prove the diamond in the paperstack.

For a more considered and sharper analysis of the transaction, be sure to read Peter Krasilovsky’s blog post.

AdAge has a good profile of Gratis Internet, operaters of freeIpods.com (not to mention freecondoms.com), as well as a good overview of the incentive based marketing industry overall. (Go read Jay Weintraub’s great analysis of the industry if you want to find out more about it)

The article, from its mentions of social networks amongst 18-24 year olds, got me thinking that incentive based marketing has turned into derivative of the idea of bulk purchasing, pioneered by Mercata and Paul Allen (anybody remember those guys?). Basically they would aggregate people who wanted to buy a certain product and ask for a bulk discount from the supplier.

Incentive based marketing has turned into a very similar thing but with a twist: you get what you want for signing up you and your friends to perhaps something you don’t really need or don’t care about changing to (credit card, dvd rental).

Capitalism at its finest.

p.s. You gotta love this paragraph opener in the article: “Although sometimes derided as a scam, it’s not”

p.p.s Interesting that they note 2004 revenue. Perhaps that was the watershed year for online incentive based marketing and now it has leveled because most people who want an iPod have an iPod. They may have to wait for another ground-breaking consumer electronics product to get kick-started.

Bill Burnham, one of the smartest minds in Silicon Valley, shows his analyst past by coming up with a great term: the “Triple A Business Model“. The A’s are AJAX, AdSense and Arrogance.

There are a swath of online applications that present a bottom feeder advertising environment with little targeting capability; applications whereby the user is deeply ensconced in the application itself (who wants to click on ads while you’re in a fucking word processor?) and has little time to consider advertising.

These firms are almost a metaphor for Gotham City thinking their city will be saved by shining a silouette of a bat in the sky and hoping for the best, but having a mediocre understanding and handle on how they got into the situation themselves.

But in the end, AJAX is appropriate whenever you need to validate a form entry, AdSense can generate reasonable CPMs in targeted environments (publishers are able to get $6-7 CPM net in certain categories, like err Real Estate) and arrogance is well, a bastard child of confidence.

At the Inman conference I had the opportunity to speak at, the team also put together a video series of the speakers, like this one of Rich Barton. Well a few days ago they posted mine.

Despite a few too many umms and ahhs, I thought it came off OK and did a decent job of describing what we are trying to do with Homethinking.

And for those readers who thought, because of my name, I was a female, shame on you. I am really a 16 year old kid.