Yahoo!'s one-stop shopping: Portal joins sites seeking new ways to make money
The Santa Clara-based company Tuesday launched its entry into what is shaping up to be an online, holiday season horse race. Yahoo! Shopping lets users choose from among 2 million items, from more than 2,700 merchants, all with a single shopping cart. That means you only have to enter your payment and shipping information once -- a big plus if you're planning to buy from a number of online stores.
Yahoo! expands its range
"Yahoo! has clearly established itself as a trusted brand and a leader in online shopping. For millions of people, Yahoo! is the single source used to find, compare and buy products across the Web,'' said Jeff Mallett, Yahoo! (Nasdaq:YHOO) chief operating officer, in a statement. "Through Yahoo! Shopping, we now offer our users a complete shopping experience, enabling them to easily access and purchase millions of products."
The Yahoo! Shopping merchants, which include FAO Schwarz, Egghead.com (Nasdaq:EGGS) Inc., Tower Records and others, are divided into 14 categories, such as apparel, books and electronics.
The Yahoo! announcement follows Excite Inc.'s (Nasdaq:XCIT) recent introduction of an online "wallet" on its site, which functions similarly to Yahoo! Shopping.
Internet hubs such as Yahoo! and Excite are essentially advertising-supported businesses, similar to television networks. They increase their profits by encouraging their users to return again and again, using a variety of free services as incentives.
Portals change stripes
But the so-called portals have recently moved into the e-commerce business, as a way to get a cut of the more lucrative online retail market.
On Monday, Excite signed a deal with Consumer Guide to include third-party product reviews in its shopping category. The same day, 911gifts.com, a one-stop gift shop, relaunched its online stores on the Web and on AOL.
Most portals, including Lycos Inc. (Nasdaq:LCOS), Infoseek Corp. (Nasdaq:SEEK), Netscape Communications Corp. (Nasdaq:NSCP) and Snap.com already have consumer shopping guides directing them to other e-commerce Web sites.
"Excite, [America Online] and the rest are hoping that recent increases in Internet shopping and the holiday shopfest will rev up that electronic commerce revenue stream," analysts from Zona Research Inc. noted in a report this week.
"Electronic commerce revenues -- recurring revenues that keep on delivering -- are a highly attractive supplement to the stagnating market for advertising dollars."