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eBay Takes Stake in Intershop with GSI Commerce

eBay plans to acquire the public company GSI Commerce for $2.4 billion (see presentation PDF) .

With this move, eBay will gain significant control of Intershop, the company that helped to develop the new e-commerce platform “v11” for GSI Commerce. Since last year, GSI has been one of the main shareholders of Intershop.

The takeover of GSI Commerce fits very well to the latest but still somewhat old fashioned understanding of e-commerce from eBay in which they are increasing their focus on traditional retailers:

“Technology is changing how consumers shop, and retailers and brands are changing how they compete,” Donahoe said. “With its complementary strengths, GSI will extend the power of our portfolio.

Source: eBay Presentation on the GSI Acquisition (PDF)

With eBay, PayPal, GSI and our global platform capabilities, we are focused on delivering new ways for retailers and brands of all sizes – from sole proprietors to large merchants – to drive innovation, engage customers and help people shop anytime, anywhere and on any device.”

Forrester e-commerce analyst Brian Walker formulated his opinion on the takeover:

"On paper this looks to be a positive for GSI and Intershop customers, as a larger parent with strategic interests in multichannel commerce acquires GSI and sends all the right signals.

But fundamentally the business will be reoriented around marketplace and payments, and it is a question whether the fundamental challenges of the GSI platform and client satisfaction will be further improved.

Some GSI clients may even be rushing to their agreements to read through their "change of control" language to see what leverage they may have as a result of the deal."

eBay is not taking over GSI Commerce completely. The sporting segment and private sales club Ruelala will be spun off. In some sense, GSI founder Michael Rubin is going “back to the roots”, since GSI was started as Global Sports Inc. (GSI) and only later developed into an e-commerce service provider.

More on GSI Commerce in the last GSI presentation (PDF)

Related posts:

• Magento And The Future With / Under eBay
• What Does GSI Commerce Really Want From Intershop?
• The Shop Exchange: GSI Commerce Takes 12.6% Share of Intershop
• GSI Grabs RueLaLa/SmartBargains for $350 Million

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

• What Does GSI Commerce Really Want From Intershop?
• Magento And The Future With / Under eBay
• What Does GSI Commerce Really Want From Intershop?
• The Shop Exchange: GSI Commerce Takes 12.6% Share of Intershop
• GSI Grabs RueLaLa/SmartBargains for $350 Million

Gemvara Raises $15 Million Capital for Custom Jewellery Concept

Gemvara is the name of the new and big hope in the online jewellery segment. Adding to a previous $10+ million financing, Gemvara raised an additional $15 million last week. The hope of the investors: to overtake market leaders such as Bluenile and Ice.com and be the first mass customization company in the world to break the billion dollar revenue mark.

"Gemvara, Inc., the online retailer of customer-designed fine jewelry, today announces the closing of a $15 million round of Series C funding led by Balderton Capital, one of Europe’s largest venture capital firms, with participation from existing investors Highland Capital Partners and Canaan Partners.

“We were inspired by Matt Lauzon’s far-reaching vision of future e-commerce, and his team’s deliberate execution to date,” said Mark Evans, Partner at Balderton Capital. “We believe that Gemvara can become the world’s first billion-dollar user-generated product company.”"

With the motto, “Make it personal”, Gemvara works very user oriented with customizable design templates, which in this form is still by far not a standard in the mass customizing segment.

Founder Matt Lauzon is portrayed in the current Entrepreneur magazine as “The Bling King” ("Matt Lauzon's Gemvara puts the 'me' in e-commerce"):

"If you look at our top-selling design, it's a ring. The ring gets ordered every day, but 90 percent of the time a customer is buying it in a way that no customer had ever bought it before."

Interested parties for this e-commerce-segment can take note: In Berlin on May 30 & 31, the first Create Your Own e-commerce conference for Mass Customization will take place. The bi-yearly MCPC World Conference is planned for November 15-19, 2011 in San Francisco.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Drugstore.com Goes For $429 Million to Walgreens

Following the lead of other established retailers who are covering their online weaknesses with acquisitions, Walgreens has announced their planned takeover of drugstore.com for $429 million:

"This acquisition offers a unique opportunity that will provide us immediate access to more than 3 million savvy, online loyal customers, and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering.

Importantly, drugstore.com's well-recognized presence in the health, personal care, beauty and vision categories, including such strong websites as drugstore.com™, Beauty.com™, SkinStore.com™ and VisionDirect.com™, will complement and extend many of our own multi-channel initiatives that have been driving growth in our business."

With more than $456 million in sales in 2010, drugstore.com is ranked as the eighth-largest e-tailer in the U.S. according to Internet Retailer magazine.

Walgreens will maintain drugstore.com's corporate office in Bellevue, Wash., after the transaction is completed. drugstore.com employs approximately 1,000 people at its offices, call center and distribution centers."

The acquisition comes just at the moment that Amazon acquired Diapers/Soap.com for $545 million and new players such as Alice.com make headway into the household goods segment.

Related posts:

• A Diaper Retailer as Technology Leader, Amazon takes over Diapers.com for $545 Million
• The Business Model from Alice.com

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Swoopo Files for Bankruptcy

Not so completely unexpected, Swoopo has registered for bankruptcy with the authorities in Munich.

Swoopo was from the start an investor’s darling and was the catalyst for a global penny auction boom. With their pay-to-play auction model they were able to draw the attention of many new users, but were unable to convert them into regular customers.

The insolvency comes exactly at the moment that Sevensnap wants to launch and according to their press release, wants to set a new standard for transparency and fairness for the entire entertainment shopping industry.

In contrast to Swoopo, Sevensnap is following the lead of Luupo, Rabattschlacht and others who are using a falling price model.

One of the most interesting models in this segment is Spreadbooster, who have been on the lookout for a while now for someone to take the helm and drive the idea forwards.

Related posts:

• How Swoopo, BigDeal & BigCactus Want to Save Their Business Models
• BigDeal: Why Investors (Still) Love Business Models Like Swoopo
• Swoopo Continues to Downsize: Layoffs and Withdrawal from South Korea
• Swoopo Loses Another CEO
• Swoopo Bids Farewell to Its CEO
• Penny Purses: Why Not a Swoopo for Handbags?
• Top 500 Shops: Swoopo Nabs 10 Million in Financing

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Books for 2011: The Thank You Economy

The Thank You Economy is Gary Vaynerchuk’s successor for his bestseller book Crush It! (see the Top 25 business books of the year for 2010).

As usual, he describes rather pointedly (others would say radically) his views on the future of the social web as a medium for communication:

Essentially, the Thank You Economy is the first book from the American wine retailer and video-blogger which goes beyond just a collection of past experiences and instead goes deep and detailed into a concrete topic.

In the book he mentions that even the ubiquity of the term “social media marketing” proves that Facebook, Twitter and the like is still not recognized as a communication platform, which leads to fatal strategic errors and a high degree of amateurism.

A re-education is urgently needed. And maybe Gary Vaynerchuk can help with pulling the brakes on the social media mania. In his book he manages to expose some dubious social media experts with their often quoted success stories as social media nonsense.

Related posts:

• Advanced Business Models: The Library for Pioneering Entrepreneurs
• Books for 2011: Building a Disruptively Better Business
• Advanced Marketing: The Viral Library

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo

Facebook Credits Allow A Look Into User’s Wallets

Slowly but surely Facebook is beginning to roll out their full offering surrounding their home made web currency Facebook Credit. And with it, the immense possibilities are beginning to become apparent.

The new Facebook Credits getBalance interface allows participating services to dynamically adjust prices or other aspects of their offering according to information about the Credits from users.

"Facebook has released the getBalance API call as an incentive to game developers who use Facebook Credits as their exclusive premium in-game currency.

The call lets developers determine the Facebook Credits balance of any of their users. This allows them to identify high rollers with a large balance of Credits and dynamically price virtual goods to increase purchase probability or profit margin, improving monetization."

In January, Facebook announced a strong incentive to use Facebook Credits with Buy With Friends:

"Buy With Friends will allow users to share that they’ve made an in-app purchase to their stream. Friends can then make the same purchase using Credits, sometimes at a discount, in-line from the news feed."

The possibilities for Facebook with APIs and their linkage with the social graph are multifaceted. For example, a next step could be to allow a Credits API to be linked to information from a social graph outside of the application. Services could then have the possibility to offer special incentives to identified high value persons in external circles. Such persons could then act as multipliers to pull several users into the application.

Bottom line is that a deep connection between Facebook Credits and accessible existing data could lead to overall revenue which is high enough to justify Facebook’s 30% transaction fee.

Inside Facebook reports on the possibilities of the getBalance API:

"The getBalance API opens a whole new level of strategy to virtual goods pricing. Large developers with huge volumes of data will be able to deduce patterns and discover tricks to help them maximize user spend. The API could even create a market for Credits balance analytics services that bring these insights to smaller developers."

Related posts:

• Buy With Friends: Facebook Credits To Be Mandatory from July 1
• Facebook As Social Commerce Engine?
• Ifeelgoods: Driving Sales with Facebook Credits

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.

The Birchbox Investors and ShowRoomPrive at the Live Shopping Days 2011

Note: as per yesterday’s figures, only 40 tickets are left to our 5^th annual Live Shopping Days conference. Whoever is still interested in our event to be held in Berlin from March 21-22 are advised to act fast to secure their place.

At our conference this year we are happy to welcome Accel Partners, who amongst other activities are one of the leading investors in Birchbox.

Spencer Lazar from Accel Partners will be speaking on “10 Trends That Will Disrupt Commerce” – and he has already hinted that he will be covering models which haven’t yet been significantly reported by us at Exciting Commerce. So we are obviously anticipating an interesting presentation.

The opening presentation will be held by ShowRoomPrive founder Thierry Petit. ShowRoomPrive is one of the up-and-coming private sale shopping clubs from France (and also funded by Accel Partners). Within two years, they have managed to grow revenues from 25 million euro in 2008 to 130 million euro in 2010 – and that while sharing market space with French shopping club giant Vente-Privée. Thierry Petit will also be discussing the future of shopping events later with Sina Afra, CEO of Markafoni based in Turkey.

Startups and entrepreneurs with promising e-commerce ideas should take this opportunity to present themselves at the investor-packed conference. Accel Partners counts amongst the international investors who also fund early stage companies and are active in the e-commerce field.

Related posts:

• Dress-for-less: The Dealmaker At The Live Shopping Days
• ShowRoomPrive Makes Number 2 Spot in France’s Private Shopping Club Scene
• Extras: WePay, Markafoni, Social Payments

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Dress-for-less: The Dealmaker At The Live Shopping Days

At Exciting Commerce it’s one of our goals to offer a behind the scenes look whenever possible. That’s valid not only for our blog, but also our events.

At our Live Shopping Days conference in Berlin, we are happy to be welcoming Alexander Grünwald, one of the Managing Directors of Altium Capital based in Zurich. Altium has consulted and assisted with the negotiations for several e-commerce/internet related M&A transactions in the last years.

Recent activities:

• Supported Dress-for-less with their sale to Privalia and before that with the sale to Palamon Capital.
• Consulted Xing with their takeover of Amiando and many previous acquisitions.
• Accompanied Internetstores (Fahrrad.de) with their financing deal with the European Founders Fund.
• Supported Geschenkidee.ch with their sale to the Ringier media group.

What is often understated in press releases: hardly a single exit completes without specialists working in the background. As restructuring in the mature e-commerce industries is currently in full swing, it will be interesting to get an up to date prognosis from the M&A professionals.

The Live Shopping Days 2011 will take place on March 21-22 in Berlin. A tentative program is already online and will be refined daily.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Privalia Acquires Dress-for-less; Founders Get Shares

How was Privalia going to get into the German market? That was the big question after the exits of Brands4Friends (to eBay) and BuyVIP (to Amazon).

The latest update: Privalia will take over Dress-for-less, taking with them one of the few pearls of German e-commerce. At the same time, the founders of Dress-for-less will obtain stock in Privalia, one of the most promising of the private sales clubs in Europe (see: Privalia Trumps Brands4Friends and BuyVIP in Latest Investment Maneuvers).

The press release summarizes the deal highlights:

• Privalia to acquire Dress for Less, one of Germany's leading online fashion clothing and apparel retailers 

• Privalia has raised EUR88 million in new equity from General Atlantic, Highland Capital Partners, Index Ventures and Insight Ventures Partners as part of the transaction

• Managing partners of Dress for Less, Mirco Schultis and Holger Hengstler, to stay with Privalia and become significant shareholders

• Privalia forecasts global triple-digit growth and combined sales in the region of EUR400 million in 2011

Palamon Capital Partners was last year on the lookout for an exit for Dress-for-less; rumours were running around at the 400 million euro mark. Now they are evidently enjoying the fruits of their labour. In the recent past, Palamon was able to sell their Payback position to American Express for 240 million euro.

Privalia, who was able to bring revenues last year to 168 million euro, raised 70 million euro in October and then 88 million euro venture capital for acquisitions. They are now very well positioned for a successful exit.

Congratulations to all those involved! After the failed exits of recent past, it is good to see that German e-commerce founders can also navigate a brilliant exit.

Particularly in advance of the Live Shopping Days 2011 conference, this is an exciting turn of events for the live shopping market as well as the fashion market where Asos, Yoox and others are active.

Related posts:

• Privalia Trumps Brands4Friends and BuyVIP in Latest Investment Maneuvers
• Palamon Seeking to Sell Dress-for-less For 400 Million Euro

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

1SaleADay and the Power of Big Numbers

Big inventory turnover within a minimum of time – the market is still underestimating the power of live shopping. A world of possibilities opens up to retailers who can behave like wholesalers:

"Well, we do have 350,000 people that come to 1SaleADay, so clearly people are aware of us. I believe there could be 3.5 million people coming to us in the near future because once the word continues to spread and they learn that they don't have to go to their local store to buy memory cards, MP3 players, at even 20% off retail, they can come here and get it for 90% off retail."

1SaleADay is for sure not the most conceptually interesting player in this market segment, however they have been very high on our watchlist for a while now, due to their surprisingly good performance in relation to the loads of other similar companies.

In advance of Exciting Commerce’s Live Shopping Days 2011 conference, the company has spoken about their plans for the future ("E-Commerce Daily Deal Giant 1SaleADay.com Gets Massive Capital Injection"):

"1SaleADay.com has become an Internet sensation and current run rates peg the value of 1SaleADay to top $300 million in the next 1 to 2 years," said Uri Laber, CEO of Optima Ventures. "This investment should send that trajectory into the $700-$800 million range. We're excited to invest in 1SaleADay, Ben and his excellent portfolio of companies, as they transform the way people shop for deals online."

Federman said the company plans to invest in their customers by committing the bulk of the investment into strengthening its buying power and streamlining its infrastructure. With bigger buying power and improved service, Federman said, customers and loyal fans can expect to see many exciting positive changes coming their way.

These improvements will reflect on operations across the entire 1SaleADay family of online deal sites, including:

• Shadora.com that offers up to 95 percent off retail on genuine, high-quality gold, silver, diamond and gemstone jewelry,
• BensOutlet.com overstock deal portal offering steep discounts on a wide range of electronics,
• DynamiteTime.com, home of the best deals on brand-name watches, and
• GlassesUnlimited.com that offers prescription glasses with designer frames for as low as $9.99."

Some believe that price competition on the internet is already extreme. But what would happen when really a handful of players would dominate via massive market share and then were able to set prices? (via)

At the Live Shopping Days Berlin conference on March 21-22, we have significant players in all live shopping segments represented. The agenda is now online. We expect an international audience. Tickets are still available. (Presentation language will be English whenever possible).

Related posts:

• Catch of the Day on its Live Shopping Year in Australia
• Amazon’s Aggressive Entry into the Live Shopping Market
• Woot! 2004 - 2010: After 6 Years, Sold To Amazon

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.