So, finally, people are starting to look seriously at community and content in the retail space. The NYT profiles Glam.com today. While, I think that Tedeschi misses connecting the dots on a number of trends, I also think he's correct in giving the eventual thumbs up to the Glam.com concept. To me, the core trends are:
1. Transactional / monetizing sites are looking to reduce cost of
acquiring and retaining customers
- This is behind eBay acquisitions, AOL / MSFT talks
- This is behind speculation that Target may buy theknot.com
2. With a stronger advertising market and overall better
monetization capabilities now present, many analysts have started to place high value on sticky sites
that attract a specific vertical
- This drove the valuation of TheFacebook.com ($100MM valuation), whose last round was led by Accel (not coincidentally, Accel also has participated in Glam.com)
- This drove acquisition of MySpace.com and IGN
3. Vertical search sites all recognize that they need to be
connected to content / community
- This was featured in Dave McClure's slides from Vertical Leap (Dave runs biz dev for Simply Hired)
- This is also behind Jobster acquisition of WorkZoo, the TripAdvisor acquisition by IAC, etc.
All of this says to me that the shopping vertical is ripe for a low cost,
community / content play. Tedeschi's statement:
"Glam.com, a fashion site scheduled to make its debut today after nearly two years in development, is of a genre not heard from since the heady days of the dot-com bubble: a so-called vertical portal offering articles, user-to-user dialogue and merchandise, all within the confines of a narrow topic."
is mistaken. MySpace was a post-bubble company, and most of these
companies have actually done quite well post-bubble. (e.g., Gay.com went
public, Beliefnet reorganized, but is now profitable, etc.)
Further, the quote:
"It's indirect selling. That's a big part of it," said Stacy Lastrina, senior vice president of marketing and creative services for Jones Apparel Group, which includes Nine West, Ann Klein and other brands. "We have to be very careful where we put our brands, and they've done a great job of understanding that."
is exactly what MySpace had done - MySpace was indirect selling. Bands
(e.g., brands) had their own pages on MySpace, but the big labels (e.g., large
retailers) do and did not. MySpace was about fans creating awareness of bands
by talking to other fans. Not clear that Glam.com does that for retail, but it
could.
However, I'm not sure I particularly agree with Tedeschi and Charlene Li's statement on competition:
But Glam will not have a lot of competition, at least at first. Fashion magazines could set up shop in the Internet, too, said Charlene Li, an analyst with the technology consulting firm Forrester Research, but "they're terrified of losing subscription revenue, and it's a hugely different approach from their regular print efforts, so it'd be a lot of work."
I don't particularly agree that there is no competition (Yub.com launched
six months ago, and BazaarVoice is a new start-up that someone I know at a top-notch research firm says will be entering the space soon). Overall, I think we'll be seeing a
reasonable amount of competition in the space, but shopping, along with real
estate, are two of the last big verticals that don't really have much in the way
of vertical content / community yet.
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