Jellyfish: Microsoft Goes Social Shopping

Microsoft announced the acquisition overnight on the Live Search blog. Increasingly, Microsoft makes important announcements—and any acquisition is big—via a blog post rather than splashy a press release.

I happen to know something about shopping comparison sites from days as an analyst. One of my last analyst projects covered shopping comparison sites, of which there are many. My take on why there are so many of these services: They don't give buyers enough of what they really need.

The presumption is that shoppers want to compare product features and find the lowest price. The approach falls short of what many buyers really need, particularly when online fraud raises issues of distrust on both sides—purchaser and seller. Three pieces of information I would expect from a shopping comparison site and often don't see:

• Full pricing, including shipping. I did quick searches this morning at BizRate.com, PriceGrabber.com and Yahoo Shopping for "D200," which is a Nikon digital camera. None of the comparison sites provided total cost with shipping. One of the major reasons buyers abandon purchases in their shopping carts: Shipping costs are given at the end of the purchase process. Jellyfish provides full price with shipping—and without sending the buyer somewhere else to get it.
• Is the seller for real? Many shopping comparison sites don't clearly indicate whether a seller is trustworthy. Others rely on end-user ratings, which can be manipulated. Jellyfish provides basic information about the sellers and how long they have been merchants with the service.
• Seller store and services information. Many shopping comparison sites are way stations rather than destinations. That's because too few shopping comparison sites provide enough information. Jellyfish is unusual among shopping comparison sites because of the kind of information easily presented to the end user, such as whether there is a physical store or if in-store pickup is available.

Most shopping comparison sites focus on the product and pricing. Jellyfish provides similar information but goes much further by giving information about the seller, too. The approach also means the buyer may stay longer on the site, which is an important distinction from most other shopping comparison sites. The longer someone spends at the site, the more additional commerce opportunities a service can derive from them.

Additionally, Jellyfish will kick back a small percentage of its profits to buyers, which has numerous benefits. Buyers have to register, which is valuable commerce-tracking and marketing information. The approach makes Jellyfish more than a way station for anonymous shoppers.

An approach that resonates well with Microsoft's Windows Live service: Focus on relationships; Jellyfish offers a more social networking/community service, which, like the cash kickbacks, is sticky. Jellyfish can be more than a way station—a meaningful brand. Very interesting: Smack shopping, which presents goods for sale in different categories in a kind of live auction. The price goes down until somebody buys.

Jellyfish has a fresh approach that distinguishes it from many other shopping comparison sites and in a way that resonates well with Microsoft's broader Live objectives. Microsoft could get stung or use the stinger on competitors. The right approach would be to make Jellyfish more readily available through Live Contacts, Messenger, Search and Spaces. Microsoft would do better by extending the social-shopping capabilities outward rather than cooking Jellyfish in a Live casserole.