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EBay moved into the black for Q3 but will it be there this time next year? The e-commerce company reported third-quarter net income of $492 million after charges, or $0.38 per share, up from a loss of $.69 in the same quarter last year. (Q307 included the massive $1.43 billion writedown for Skype.) Revenue rose $228 million to $2.12 billion, up 12 percent over $1.9 billion in Q307. But the economic downturn combined with eBay's (NSDQ: EBAY) slowing growth—almost stagnant—doesn't bode well; that year-over-year revenue increase is actually down $769 million from last quarter and eBay's increases for the last three quarters were incremental, with a range of $15 million. Q4 will include $70-80 million in charges from the recently announced 10 percent job cuts. The result: eBay would consider zero revenue growth over this quarter to be a win.
Skype: Revenue for eBay's communications division grew 46 percent over last year, to $143 million. A "robust trajectory" as eBay puts it but again, revenue growth is slowing. Sequentially, Skype revenue was $126 million in Q1, $136 million in Q2.
MKTW: " Earlier this year, eBay began a restructuring effort designed to improve the buying and selling experience on its Web site. This included changes to clean up older listings and offer more items on a fixed-price basis, which has become a popular draw for competitors such as Amazon.com. But so far, the changes do not seem to have boosted the core business. The company said gross merchandise volume—the value of all goods sold over its auctions Web site—slipped by 1% during the quarter. GMV had grown by 14% in the previous third quarter."
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EMI is planning a pre-holiday launch of a new music portal that will include the ability to buy downloads, according to the FT. We've confirmed that but a source familiar with the project says it is not an attempt to displace digital retailers like iTunes or Amazon or as some EMI version of Sony Connect. It's meant more as a consumer testbed, a way for EMI to see what interests users most and how they respond to various things. It will include artist and catalog information; audio and video downloads will be both free and paid. EMI is declining comment although this seems like the sort of thing they should be talking about.
It's another example of content ubiquity in an online universe that seems to veer between exclusivity and total availability. Universal is looking a video portal. (If they could clone the International Music Feed that was killed when sold to Ovation, it would make a lot of people happy.) EMI could send people to its digital retailers but it has hundreds, if not more, e-commerce relationships around the globe. If the idea is to launch a major music store, the portal would have to include all the majors. But this sounds more opportunistic, more about impulse and label destination then music shopping.
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Blog network Sugar Inc. is opening its ShopStyle API to anyone interested in building apps based on the shopping technology and plans to follow that up with something called ShopSense, which will allow users to share in Sugar's retailer revenue. CEO Brian Sugar bills it as a way for publishers to make money, especially during the upcoming holiday season. Sites already using ShopStyle, acquired last year, for their e-commerce include Glamour, Elle UK, Bravo and InStyle. Of course, this doesn't instantly translate into revenue for anyone outside Sugar. That kind of proof will have to come in the form of payments.
The company is also launching two new sites: CelebStyle.com, billed as an IMdB for celebrity style, and SaleHabit.com, described alternately as a "Kayak for online fashion" and a "Google (NSDQ: GOOG) for fashion sales." CelebStyle is the rebranded, relaunched TV shopping site Starbrand Media, acquired by Sugar in May. SaleHabit literally searches fashion sales across the web, delivering results by day, category, price, brand, etc. (Built over a weekend, it has a low threshold for success.) Sugar's explanation: "Everyone else has been building ad networks. We're building technology, which will really provide much more value to our company."
We'll see.
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An interesting move from Sugar Inc. following its mid-summer course correction with NBC Universal (NYSE: GE) ... the blog network opened its publishing platform to its readers today with OnSugar beta promising "sweet & simple publishing." The concept: give users the tools to do what the Sugar pros do, increase engagement and add to revenue starting with retail links served up with the new blogs. CEO Brian Sugar said the move doesn't preclude a Sugar ad network but this and other recent actions suggest that Sugar is still focused on realizing its own potential as a network.
 Some details:
-- ShopStyle, acquired by Sugar last September, plays a major role; Sugar said at the time of the acquisition that the company would use ShopStyle's commerce technology to integrate shopping across the network. Users also can create style looks from the images on the social shopping site. ShopStyle wound up throwing off enough revenue to be a factor in Sugar's decision to withdraw from NBCU's ad network over the summer. NBCU is still an investor.
-- Bloggers can access "hundreds of thousands" of Getty (NYSE: GYI) Images.
-- Existing blogs can be imported from Blogger, Wordpress, or Typepad.
-- Options include widgets, polls, quizzes, quotes and more.
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WPP Digital has acquired a minority stake in online analytics provider Proclivity Systems, Brand Republic reported. The New York-based firm looks at consumers' e-commerce habits, which is used by its clients to target merchandise and marketing efforts. WPP Digital, the investment arm of the ad holding company, followed Fung Capital USA Investments, which was the lead investor in the unspecified funding round. The two were also joined by the Pilot Group as a stakeholder in Proclivity Systems. Back in April, WPP Digital took a minority stake in Chinese rich media ad delivery outfit HDT Holdings Technologies and in August, the ad company purchased a 12.82 percent share of IGA Limited, the Cayman Island-based parent company of InGame Ad Interactive Technology.
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 After a wave of speculation as to where she would land after resigning as president and CEO of Martha Stewart Living Omnimedia (NYSE: MSO) in June, Susan Lyne has been named CEO of Gilt Groupe, an online retailer of discounted luxury items. The e-commerce site is open to customers by invitation-only. Gilt is part of Alley Corp, the online holding company founded by Kevin Ryan and Dwight Merriman, the former CEO and CTO of DoubleClick, respectively.
Lyne's move seems surprising, because of her extensive background in entertainment and media. Before heading MSLO in the fall of 2004, Lyne was president of ABC Entertainment in charge of the network's primetime programming and had been with the network since 1996. The company announcement of Lyne's hire gave no indication as to whether Gilt would try to move into content creation or curation in some way. At Gilt, Lyne takes over for Alexis Maybank, the company's founder. Maybank will remain on as chief strategy officer.
Staci adds: Just got off the phone with Susan Lyne, who is amused by the surprise factor. "I told everyone I'm not going to do what you think I'm going to do." So why Gilt rather than Oprah or any of the other options floating around? "I was completely won over by the energy and growth at Gilt Groupe." The current media environment played a role, too. "There's so much uncertainty and fear in the media marketplace right now, a lot of slowing growth, advertising is a tough revenue stream at the moment. But you look at a company like Gilt (commerce and the internet) ... And it's a different story." For Lyne, whose most recent employers were Martha Stewart and ABC, it's also a different size and, as a premium-only site for now, a different concept. When I mentioned how much smaller, she laughed and replied: "It is now." Gilt has a staff of about 70 now with 40 positions open. For her, the choice was between being at the top of a company "where the hard work has been done" or "what is going to get me up in the morning excited." Lyne became a Gilt customer before she started talking about the job seriously. What's next? Lyne isn't going into detail but I wouldn't be surprised to see some options that move beyond the current members-only concept—possibly a new level or other ways of opening the gilt gates a bit. Lyne did say she would be exploring media partnerships—private sales, special events and the like. As for producing media, Gilt is already getting into content like with Fashion Week. Expect more.
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The Wall Street Journal has a wine franchise in columnists Dorothy J. Gaiter and John Brecher that's hard to match on the content side. Now Dow Jones (NYSE: NWS) hopes to capitalize on the combination of that reputation and its affluent audience by offering WSJwine, a direct-to-home wine service. Pairing with Direct Wines, WSJwine launched today promising a wide range of choices but without any actual connection to WSJ's wine journalism. In fact, it's not obviously possible to get from WSJwine.com to WSJ.com. The first bottle I found was a 2003 Roche Lacour Cremant de Limoux for $19.99 ($219.99 a case). Trying to buy a bottle took me right into an error page. Enthusiasts can join The Discovery Club with a 12-bottle case for $69.99, $120 off usual prices, plus tax and $20 shipping. That includes a free binder for labels and notes—and a wine-tasking kit in a wooden box. Every three months, members will get a new case for $140 plus shipping and tax unless they opt out. Oh, and I finally figured out the error pages: unless you pick a state and swear to being at least 21, you can't order anything.
Speaking of competition, Amazon (NSDQ: AMZN) is said to be on the verge of launching its own wine store although so far the options when you enter "wine" in the search engine run to books, vinegar and gum. (This search brought to one of those fascinating serendipities on Amazon: customers who bought a six-pack of Wish Bone Fat Free Red Wine Vinaigrette Dressing also bought Wish Bone Fat Free Ranch Salad Dressing, Kellogg's Apple-Cinnamon Nutri-Grain Bars and two gel-filled king-sized Dream Supreme pillows. The pillows would make a lot more sense with a six-pack of wine.) The e-commerce company hasn't confirmed this yet but wine industry insiders are talking about it. Reuters reports that the wine will qualify for Amazon's discount shipping program but exactly where it can be shipped and how is part of the legal crazy quilt that cost Amazon when it tried wine in the past. This time, Amazon is working with Napa's New Vine Logistics for wine fulfillment.
How much can the Journal and Amazon make with this? Barbara Insel, president of Stonebridge Research Group, told Reuters total U.S. wine sales were between $30-$32 billion in 2007 with $2.8 billion sold through wine clubs, tasting rooms, etc. Of that, only some 7 percent comes from e-commerce now, making it a potential growth area. It's not easy to project from the outside, especially since partners and fulfillment houses are involved and because the laws vary so much from state to state. The memberships—a different kind of paid content—could be the best bet. Competition is stiff but WSJ has the brand and Amazon has both brand and volume.
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