The big news of the day is Microsoft’s $45 billion dollar bid for Yahoo. While the blogosphere will be abuzz with predictions of how this will shake up the online landscape, there’s a very real impact on pure “traffic ownership.” We took a really brief look at what the potential merger means for Microsoft in terms of net new traffic, and how this will impact the big players in the space.

Microsoft currently owns three of the top ten most trafficked domains (as ranked by UVs). Yahoo.com currently ranks first across the entire web on this metric. What’s interesting is that, because of both Yahoo and Microsoft’s massive audiences, the overall pool of Unique Visitors grows by a surprisingly small amount. Looking at the chart below, Microsoft Properties* and Yahoo.com share 96 Million Visitors. In fact, the net new traffic, in terms of US Unique Visitors, only grows by 31% (37 million people). To throw the transaction value into the mix, that translates to $1,186 for each net new visitor.

But Unique Visitors are only one component of traffic measurement. In terms of total page views and Attention, a Yahoo acquisition would nearly double Microsoft’s numbers. The chart below shows the net new Unique Visitors, Pageviews and Attention that would result from the potential merger.

How would this potential merger shake up the overall internet landscape? Two-fold.

• Microsoft would dominate the web in terms of display ads. In addition to the billions of page views on various Microsoft domains, their ad network will grow exponentially.
• Microsoft would become a much bigger competitor in the search market.
  The chart below shows how the combined search, and site traffic will reshape the top performers on the net.

Google would still take the lions share of online search traffic but the combination of Yahoo and MSN/Live would grab about 25% of all search market share. However, the size of these two online giants would simply dominate any domain level traffic ranking, no matter how you slice the data. In terms of page views, the merged company would get over double the page views of second ranked MySpace.

There are many, many implications of a merger between Yahoo and Microsoft. As we dig deeper into this exciting development, we’ll be sure to keep you posted.

*In this analysis, Compete did not consider Yahoo Inc’s offsite traffic (at sites such as flickr or del.icio.us) and considered Microsoft traffic on Microsoft.com, MSN.com and Live.com

At Compete we frequently write about monthly traffic volume and site popularity, but the focus is usually on the ten or twenty sites that enjoy monthly visitors in the tens (or even hundreds) of millions. While it’s important to investigate these sites, massively popular domains like Google or Yahoo typically don’t change much in terms of domain-level traffic or rank. Right behind these behemoths, however, a large number of websites battle for the finite resource of consumer attention and the shifting dynamics of this group will ultimately define the future of the web.

With 2008 now more than two weeks old, it’s a great time to look back at last year and see how the web has changed. What sites experienced a surge of traffic in 2007? Has anyone fallen off the map? We compared the top 1000 sites in December 2007 with those in December of the previous year to find out.

The chart above shows the top twenty sites that gained or lost the most amount of traffic from December 2006 to December 2007, as a percentage of visits in December 2006. A few interesting trends are revealed:

• The web has yet to reach its “Social Peak”: Among the fastest growing sites, eighteen of the twenty offer a prominent peer-to-peer communication platform. Even in the adult video category, sites that function almost identically to YouTube (redtube.com and youporn.com) represent the fastest growing niche.
• Online daters would much rather be subjected to ads than a checkout form: Two of the fastest growing sites (Iamfreetonight.com and datehookup.com with 31000% and 3050% growth respectively) are relatively new entrants to an already crowded online personals market. Both services succeed by offering free membership and generating revenue through advertising, a business model they share with only a handful of other services.
• New Social Networks still have a chance…as long as they find their niche: CaféMom appeals to a very specific group, and has captured a substantial audience (and grown over 2000% in one year) despite the constant buzz surrounding Facebook last year.
• People place a high value on peer opinion: Both Stumbleupon and Reddit both grew by over 500% in 2007. Digg.com (not listed) also grew by nearly 300% in terms of visits in 2007.

One of the best perks of working at Compete is the ability to analyze website traffic down to page level detail for any domain — measuring visitor conversion, discovering a website’s referral sources, and getting traffic figures for millions of sites without being restricted to analyzing five domains at a time through Site Analytics.

Today, we’re pleased to make available Compete Top Lists. This new product provides ranking lists for up to 500,000 domains on the basis of any metric available on Compete.com:

• Unique Visitors
• Total Visits
• Pageviews
• Time Spent On Site
• Monthly Attention

Whether you’re a site owner wondering where you fall in the context of your peers, a domain buyer looking for the next great undervalued site, a venture capitalist looking for the next big as-yet discovered hit, or a stat-head interested in analyzing the web on a macro level, Compete Top Lists offers a new level of insight into the ever changing web.

Interested? Contact membersupport@compete.com or follow the link below for more information.

Online personal sites are a lot like social networks; the most critical factor for a site’s success is people. More specifically, the volume and activity level of members needs to be high enough for users to make connections, and for visitors to be enticed to join. But despite the online personals market becoming increasingly crowded with newcomers, the top dogs of the industry seem to be as strong as ever.

The chart below compares total site traffic to total active members for the top US online personal sites. By comparing these two numbers, its possible to see how factors such as acquisition efforts, site design, and audience impact site usage.

• Mate1.com and True.com both do a terrific job of driving visitors to their sites, but this traffic simply doesn’t convert. Members represent 13% and 24% of total visitors (respectively).
• HotorNot.com members also make up a small share (21%) of total visitors, but this results from the fact that visitors can rate members (the main draw of the site) without being a member themselves.
• Plentyoffish.com, a service built on ad revenue is a great success for all involved. More visitors become members because the service is completely free, and the site generates an a great deal more money because members consume considerably more pages.
• Niche dating site BlackPeopleMeet.com also sees a large number of members as a share of total visitors (71%) due to a very targeted audience.

The next step in the love equation is member usage, and if repeat visitation is any indicator, consumers find a great deal of value in free (or at least open) services. The chart above shows overall member involvement (measured as the total number of times a member accessed each site). Since this metric is a function of both total members and member activity, it paints a more accurate picture of each site’s base.

• SinglesNet.com, ranked 4^th in terms of UVs, ranks first in total member visits at over 27 million in December. A fairly open platform and free trial membership helps encourage registrations and an average of 10.7 monthly visits per member.
• PlentyofFish.com, despite having around 1/5 as many visitors, nearly ties Yahoo Personals in terms of total visits. The entirely free service encourages users to communicate, and drives Plentyoffish members to visit the site an average of 14 times a month.
• While the represent major dating services in terms of total visitors, both True.com and Mate1.com look like they compete more with Niche site BlackPeopleMeet when compared on the basis of member visits. Aggressive acquisition and sales tactics (such as requiring a subscription for any type of user-to-user communication) are prime factors in their equally low repeat visitation (around 5 times per month per user)

With social networking providing much the same service as a dating site, its interesting that pure online personals sites continue to grow. But then again, “looking for anything I can get” doesn’t really mean anything on Facebook, but it will probably get you a full inbox on Mate1.

About one year ago, those lucky enough to purchase a Wii in November were enjoying it, about to make someone’s Christmas, or cleaning house on Ebay. Those who braved the lines or shelled out a premium for a PS3 were kicking themselves as retailers maintained an abundant supply of the console for most of December. Xbox 360 owners were too busy playing Gears of War to notice either situation. So with all three consoles surviving their first (or second) year out of the gate, what’s changed?

The chart below shows Compete’s estimate of monthly in-market video console demand based on the number of U.S. consumers observed shopping online for each console.* The biggest takeaway: Wii domination.

• Wii Demand skyrockets: nearly 3 million people shopped for the console online in November. In fact, demand for the Wii was nearly 40% higher than in the month that the Wii LAUNCHED in back in 2006.
• Halo 3 does what it’s told: The most anticipated game of 2007 helped Xbox 360 gain the title of most shopped console in September, besting the Wii for the first time since launch.
• Xbox experiences “launch 3.0?”; Xbox 360 consoles also experienced a huge lift in November, beating demand levels of the previous November (which we dubbed “launch 2.0”) by about 5%.
• Not in trouble, but not out of the woods either: PS3, despite having its best month since December of 2006 and a more affordable price, failed to compete with either the 360 or the Wii in terms of demand, attracting about 1.1 million shoppers.

Continue reading “Xbox 360 vs. Wii vs. PS3: Wii more in demand now than at launch” »

Online Shopping has plenty of perks: instantaneous price comparisons, customer reviews on everything from HDTVs to milk; communities focused entirely on finding deals. Ironically one of greatest benefits of online shopping, the ability to avoid crowds, has managed to take a lot of the holiday cheer out of recent Amazon promotions.

For the last two years Amazon.com hosted a “Customer Vote” promotion allowing registered Amazon.com users to vote for enticing offers, and offered limited quantities of winning deal. Last year, a horde of deal hunters pounded a $100 Xbox 360 page until the entire site crashed. Learning from this, the 2007 Customer vote promotion was more “democratic”. Instead of offering the winning deal on a first-come-first-serve basis, Amazon randomly selected winners from the pool of voters, and forced those participants to check the site on 6 consecutive days to see if they were eligible for any round of promotional deals.

And here is where crowds could have been an incredible help…by setting realistic expectations.

Just like the Xbox fiasco last year, Amazon Customer Vote 2007 participants had no clue what the competition looked like. Amazingly, over 1.3 Million people visited the Amazon Customer Vote promotion in November. Certainly not all of these visitors participated, but for the sake of this argument, lets say did, and that they all voted in each round. The table below shows the promotion items for all 6 rounds, and the likelihood of winning each.

• The odds of being able to pick up that $400 Laptop of HDTV were both over 1 in 3000. For context, that’s around the same likelihood of hitting 21 in a game of Blackjack…four times in a row.
• Without knowing these odds, it was extremely easy for participants to drastically overestimate their likelihood of success, and inevitably set themselves up for disappointment.The Customer Vote Forum conversations suggest this was a widespread phenomenon. Being able to physically see the volume of other “voters” would have allowed these people to adjust expectations accordingly.

So what did Amazon get out of all this, besides selling a bunch of inventory below cost, and getting to write fantastic thank you letters? Incremental shopping.

While the average visitor to Amazon browsed about 14 pages per day during the promotional period, Amazon Customer Voters went through about 24, a 60% increase and far more than necessary to interact exclusively with the Customer Vote section. The chart below compares this shopping behavior from the 16th through the 30th of November. It’s interesting to note that the gap in consumed pages is actually wider on days when none of the deals were available for purchase.

Amazon does a lot of things right, and I would assume that the Customer Vote promotions are successful from a business prospective. But certain elements of this year’s promotion have the potential to make (increasingly web-savvy, and cynical) customers realize who really benefits from this type of promotion. The fact that users had to physically check the site, given Amazon’s level of sophistication, seems to a move to drive repeat usage, while providing no advantages to consumers. Couple this with the (undisclosed) odds of a participant actually capitalizing on the promotion, and the Customer Vote promotion has about as about as much value to participants as a “W1n a Fre e iPhne” email…from a retailer that can do infinitely better.