Web 2.0 Wednesday continues with eBay confirming (EBAY) that it bought StumbleUpon for $75 million. As I mentioned back in April, when this story first broke:
The reason StumbleUpon is so hot right now is because it represents a fruitful area beyond search: discovery. Search engines are good for when you pretty much know what you are looking for. But discovery engines like StumbleUpon's use a combination of your own stated preferences and those of people like you to surface Websites, videos, photographs, and other information you didn't even know you might like.
That's why eBay would want it, and why Google might be miffed for missing out. Think of StumbleUpon as a Digg for Websites. As StumbleUpon's database of the best content on the Web gets bigger and bigger, it can start to carve out discovery engines for specific sites.The fact of the matter is that eBay is facing some major disintermediation from Google (GOOG) right now. Many of its biggest sellers are setting up their own Websites and buying keyword search terms on Google to drive traffic directly to their online stores, bypassing the need to pay eBay a commission on each sale.
If discovery is the next of search, buying StumbleUpon could be an attempt to get in front of that curve, and maybe some day disrupt Google's business down the line.
Discovery can also be thought of as the latest twist on recommendation engines. And every e-commerce site needs one of those.
It's an interesting deal, but web search may not be the primary reason for it. There's an interesting analyst's article on Metue that speculates this was largely a big up-front ad buy with marketing benefits underscoring the purchase. It wasn't about search, they say, it was about marketing (and paid search) The article is worth checking out: http://metue.com/05-31-2007/ebay-stumble-upon-valuation/
Posted by: Mark | May 31, 2007 at 11:17 AM
eBay's StumbleUpon Acquisition Part of 'Finding' Strategy Stumbleupon.com is a terrible domain name. They would be better off changing the name and utilizing the social software apps. When you stumble upon something means "finding" by "accident". Mylocator.com has been perfecting a "finding" strategy for 8 years now. The Founder is the pioneer of vertical locator cluster technology. All these major companies need a true network that is vertical, location based, keyphrase; a family of strategic vertical locator properties. MyLocator is that platform with over 1000 vertical locator channels. Entertainment can be Ebays next thing if they acquire or create entertaining "FindingEngines". Right now natural results are over(circa 1999), premium location is everything. 65 million domains and only about 30-50 thousand are any good. (Commonsense, top level, keyphrase, strategic, location based, vertical channels) The web 3.0 is about strategic niche market social networked vertical results and location. Social Advertising = word of mouth advertising: the most valuable advertising on the planet. Once an invisible ad platform the web 3.0 brings it all to light(permanently). I think ebay would have a better go at it if they changed the name to StumbleEngine.com. I can see it now SEO meaning stumble engine optimization. Funny how the web 3.0 is all about going back to the basics.
Posted by: daniel rueda | June 01, 2007 at 07:36 AM