FYI...A Summary of the NETP presentation at the Piper Jaffray Conference in Minneapolis this week --from Briefing.com:
<<Net Perceptions (NETP)
For NetPerceptions, a presentation at the Piper Jaffray conference is like a local boy playing for the Minnesota Twins. NetPerceptions grew out of research technology developed at the University of Minnesota, and is currently headquartered in Minneapolis, just a few blocks away from the Minneapolis City Center Marriot where this conference is held.
NetPerceptions sells "real-time recommendation" software for use by ecommerce companies and call centers. Recommendations refers to upsell opportunities or requests from users.
NetPerceptions system operates in the following way:
-- Information is gathered by the engine about an individual, either from web site usage or from call center data
--The information is used to associate the user with a "neighborhood" of other users.
The neighborhood is analyzed to create buying patterns
--A recommendation is made to the individual user for a purchase based upon the buying habits of the neighborhood
CDNow (CDNW) was used as an example of how a customer uses the NetPerception product. At CDNow, if you type in the name of three albums you like, a recommendation of other music you might like is presented. The recommendation is made based upon the actual buying habits of people who have bought the three albums you enter.
SkyMall (SKYM) was given as an example of a call center customer. The NetPerception product collects data over time on the buying habits of everyone who purchases a single product. Based on that history, SkyMall makes an upsell recommendation whenever you make a purchase on the telephone. In the presentation, an example was given of a user buying a white polo shirt, who might be offered a "special" on a cigar humidor.
NetPerceptions distinguished their product from other rules-based purchase analysis software in the following way:
--Learning: the engine data and analysis expands with every new user
--Individualized targeting: all of the recommendations are completely customized to the user
--Real-time: All of the customization and analysis is done on-the-fly, at the time of purchase.
Business model: The company charges an initial license fee, with an annual maintenance fee. This is a standard software business model, although NetPerceptions does scale its prices based upon the number of users in the customers database.
Briefing.com comments: NetPerceptions is an intriguing company, but it is very small, at just $1.9 million in revenue in Q1. We would like the business model better if it were scaled to the growth of the internet, as Inktomi's (INKT) transaction engine is. Although we haven't researched the company, first impressions seem like it might make a good acquisition for the right company. In fact, it seems like it might fit well into the CMGI (CMGI) stable of companies. >>
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