Chuzz, there are some good on line publications which are beginning to adress this. I know Red Herring is where I started once and there is an even better one whose name I have misplaced. They come up with metrics. Also Mary Meeker and the Morgan Stanley web page have a book on line that deals in how to value internet stocks. I didnt read it at the time because I didnt own any . Meeker was interviewed 2 weeks ago in Barron's' that article may have some leads.
Also I copied this from a post by Marion on the Yahoo thread: <How AOL works:
AOL charges merchants large sums to be on AOL. These are contracts for a year or more. AOL also usually receives a percentage of the revenue from the sales. Most of the stores are large well known names, ( JC Penney, FAO Schwartz, Hickory Farms, etc.) In some cases they have been given exclusive rights. Barnes and Noble for instance has exclusive rights to be the only bookseller on AOL.(Amazon has exclusive for the AOL.Com web site)
Barnes and Noble paid 40 million dollars for that over 4 years.
AOL guarantees all the products sold on their service.
How Yahoo shopping works: Anyone can set up a store on Yahoo. It costs 100 to 300 dollars a month. There is no time contract, and there is no commissions paid to Yahoo. This has attracted a lot of small "mom and pop " type stores. Some selling odd and unusual items. You can visit the stores individually or you can do searches using Yahoo's search. So if you search for an item and more than one store carries it, all of those item appear, just
like if you were doing a regular web search. Yahoo doesn't guarantee any of the items and has a disclaimer <<Yahoo! expressly disclaims any responsibility or liability for any damage, loss or injury arising out of: •for the activities of any merchant; •the goods or services offered or the content displayed by or in any store; •for any loss or injury resulting from your access or inability to access any store; or •arising out of your purchase or use
of the goods or services of any store. >>
Yahoo has no large name stores or any large agreements for revenue sharing.
They presently have about 2,700 stores. AOL has a little over a hundred.
At the rate of 300 per store, Yahoo would gross around 2.5 million for a quarter which is 10 million a year or what Barnes and Noble pays AOL in a year.
There is also a limit to how many stores Yahoo would be able to have on their site, before it would become cluttered, and ineffective to the merchant selling.
Yahoo is also now not in a position to offer any exclusive deals or revenue programs.
They are also competing with other sites that offer the same set up. You can have a store on Snap for 49 dollars a month ( its free if you sell 10 items or less). The low cost of these stores might attract some of the less desirable merchants too. |
