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Category: Retail & eCommerce

eCommerce, Online Retail & Retail News

  • Google Wallet Now Keeps Track Of Your Recent Orders

    Google Wallet Now Keeps Track Of Your Recent Orders

    Google has added a new feature to Google Wallet, which automatically keeps track of users’ online purchases. It appears on the Android and iOS apps.

    It will also notify you about the status of your orders.

    “Once you activate Orders in Google Wallet, you’ll be able to see any receipts sent to your Gmail right in the Google Wallet app,” says product manager Amit Litsur. “We’ve also worked with primary package carriers in the US so that when your order status is updated, you’ll get notified of the update through Wallet. So whether your order is shipped, out for delivery, or delayed, you’ll never wonder about the status of your order.”

    “Google Wallet also makes it easy to see your order history and details of what you’ve purchased all in one place,” he adds. “You can view the products you’ve ordered, merchant contact information, and shipping details in the app. Plus, with just one click you can call or email the merchant if you have questions about your order.”

    2014 has been a relatively quite year for Google Wallet so far, though it did get an update in January making it easier to add loyalty cards.

    Image via Google

  • Google Announces New Enforcement For Google Shopping Unique Product Identifier Requirements

    Last summer, Google started enforcing its new unique product identifier feed specification for Google Shopping. Google said it was improving support for merchant-defined multipacks. The feed specification clarified how multipack products should be submitted. As it moved toward high-resolution displays, Google also started recommending higher-quality images with at least 800 pixels in height and width.

    For products like custom goods, vintage items, collectibles, etc., which don’t have unique product identifiers, Google introduced the “identifier exists’ attribute, and updated its requirements on unique product indentifiers.

    Last year, Google began disapproving products that didn’t have data in the feed for the unique product identifier attributes, demoting products that incorrectly used the identifier_exists attribute, and disapproving products that provided invalid GTINs that didn’t conform to standard GTIN specifications.

    You might want to check out this data feed discussion from the company:

    Image via Google

  • eBay Launches ‘Smart Hashtags’ For Social Commerce

    eBay Launches ‘Smart Hashtags’ For Social Commerce

    eBay announced the launch of Smart Hashtags on Wednesday. Users can click on the share widget on a product, guide or other page to share to Twitter or Pinterest, and a box pops up with a shareable link, a text phrase or product title, and one to three of the smart hashtags.

    “The phrases — set aside with a hash mark (#) — are optimized to highlight relevant and searchable information for easier discovery,” the company explains in a blog post. “From a business perspective, the addition is also a subtle way of dropping commerce into the social conversation in a non-obtrusive and user-friendly way.”

    “Smart Hashtags also aligns to eBay’s goals and the company’s desire to create a more relevant and personalized experience for our customers,” says Corinne Sherman, who came up with the idea. “It capitalizes on consumer behavior — and leads us toward a new path I like to call Social Network Optimization.”

    “At eBay, we are constantly trying to do really cool, innovative things with social,” says Sherman. “It’s been a fantastic experience working with teams across the company to execute, automate, and scale Smart Hashtags to enhance the shopping experience.”

    She pitched the idea at the eBay Data Conference last year, and software engineer Jing Chen built it.

    The feature is live across the site.

    Image via eBay

  • 2014: The Year Affiliate Marketing Grows Up

    2014: The Year Affiliate Marketing Grows Up

    Affiliate marketing is stagnant and ripe for innovation. In-content “affiliate” or “performance” marketing — driving traffic through product links embedded in original content — is one of the oldest business models on the web and it has barely changed in a decade. This year, 2014, change is emerging.

    A new affiliate exchange, bringing merchants and publishers together to buy and sell clicks in real time, launched in the summer of 2013. This new content-driven commerce exchange is picking up steam. As a result of this exchange and others like it, publishers will unlock billions of dollars in revenues in the next five years. Merchants will be able to reliably and predictably buy product specific content-driven commerce clicks on demand and at scale.

    Affiliate marketing is plagued by a reputation for fraud. It is also dominated by coupon sites that often do little more for merchants than create margin pressure. Equally problematic, affiliate marketing suffers from mind boggling fragmentation and complexity. Tens of thousands of merchant programs are spread across dozens of affiliate networks in the US alone. Much of the work required of publishers for earning from clicks they drive to merchants remains manual and error prone. Until recently, real- time bidding for contextually-relevant product placements within original content hasn’t been possible.

    Sites like the New York Times don’t monetize through affiliate marketing not out of high-minded editorial integrity but because old school affiliate marketing isn’t worth the trouble. For these reasons, affiliate marketing has never achieved the economies of scale of either search or display advertising.

    In 2014, this has all started to change. A combination of big data, Natural Language Processing, and powerful predictive analytics has automated away the complexity. These technologies sound complex. In fact, they simplify all of the messy pieces that comprise creating, pricing, and filling affiliate inventory in a rational two-sided marketplace. Both the buyers (online merchants) and the sellers (online publishers) of affiliate clicks are benefiting.

    This has allowed for the emergence of the first ever content-driven commerce exchange. In this exchange publishers auction clicks on product links embedded in their content to the highest bidder that sells the product (A Nikon D5300 camera is the same camera if you buy it at BestBuy or on Amazon). By bidding to buy these in-content shopping clicks, merchants are winning more sales. At scale, this shift will boost publishers’ commerce-based revenues by double-digit to triple-digit percentages. Online merchants finally gain reliable, predictable access to commerce driven by trusted content and the aggregated audience of in market shoppers.

    The drivers for this change are self-evident to every online publisher. Today, publishers sell clicks on product mentions embedded in their original content with no idea how much the average click yields in revenue. They cannot keep track of changes in commission structures across dozens of affiliate networks or direct performance marketing relationships with merchants. They cannot predict in advance whether traffic to one online merchant will convert at a higher rate than traffic to another.

    Publishers should not be expected to build sophisticated models to predict which merchant will pay the most for, let’s say, a German visitor on a mobile phone clicking on a deep link to a pair of dress shoes. The results are woeful inefficiency. A publisher trying to manage affiliate marketing manually is lucky to monetize a third of their commerce clicks, and at rates that drastically undervalue their worth. This is a classic yield management problem, long ago solved for both search and display.

    Merchants also suffer. There is no unified marketplace, no NASDAQ or DoubleClick or AdWords for clicks from content. Today, merchants must navigate the existing universe of sophisticated click traffickers. These include the classic affiliate networks, comparison shopping engines and countless other niche players. Successful integration into an affiliate network is neither easy nor fast. As a result, switching costs are high. In the end, merchants that need to buy extra shopping clicks struggle to find them.

    The solution for affiliate clicks is a platform where big data trains ever-smarter models that drive advertising automation. What humans see as chaos — a pool of content and clicks fragmented across a giant mass of affiliate networks — computers see as data — normalized, structured, relational data.

    This allows software to create linkages between content sites and commerce sites and to price those linkages efficiently. This efficiency will place the best merchant offers on clicks delivered by the publishers with the best audience. Today, the best models can automatically identify product mentions with high precision. Predictive pricing models select the most economically rational link based on factors such as commission fee structure and merchant conversion rates. Software automatically embeds that link, routing traffic to the most competitive retailer.

    The first content-driven commerce exchange opened for business in June. Every day, it auctions off thousands of clicks on product mentions to eager merchants. Publishers see earnings per click that were 200% to 300% higher, on average, as compared to clicks not flowing through the exchange. A number of merchants eagerly jumped in to gain access to one of the largest aggregated pools of content-driven shoppers on the Web today. Most importantly, the whole process was orderly and painless on both sides. It’s the future of content-driven commerce and it’s inevitable.

  • Autumn Radtke, CEO Of First Meta Virtual Currency Exchange, Found Dead

    Autumn Radtke, CEO Of First Meta Virtual Currency Exchange, Found Dead

    Autumn Radtke, the 28-year-old CEO of virtual currency exchange First Meta, has died. According to multiple reports, suicide is suspected, but not confirmed.

    The Daily Mail cites “police sources” as saying they have “strongly suspected” suicide, and reports that she was discovered in her Singapore apartment on February 28th. Officials are reportedly awaiting toxicology test results to determine the cause of death.

    A message on the First Meta Exchange site says, “The First Meta team is shocked and saddened by the tragic loss of our friend and CEO Autumn Radtke. Our deepest condolences go out to her family, friends and loved ones. Autumn was an inspiration to all of us and she will be sorely missed.”

    Some of the stories about Radtke are playing up the Bitcoin angle, with at least one calling her “Bitcoin CEO,” but according to a post from September (via Business Insider) about the currencies First Meta Exchange supports, it only supports selling Bitcoin, while offering much greater support (like buying, depositing and withdrawals) of a number of other currencies, including Linden dollars.

    Here’s a 2012 presentation Radtke gave on the “past and the future” of virtual currency trading:

    Image via YouTube

  • Recently Announced Google Capital Makes Fourth Investment

    Last month, Google announced Google Capital, an investment fund for growth-stage businesses. This is for Google to invest in established companies as opposed to those just getting off the ground, which is what Google Ventures is for.

    While the Google Capital investments have been happening for over a year, it was only in February that Google announced the fund and its actual name. With the announcement came a roster of three businesses that Google Capital had so far invested in: SurveyMonkey, LendingClub and Renaissance Learning.

    Now, the fund has reportedly made its fourth investment in Auction.com. According to to TechCrunch, Google Capital made a $50 million investment in the real estate marketplace, and a rep from Google’s fund will join its board of directors, while another will serve as a board observer.

    Auction.com has been repeatedly described as an eBay for real estate, as buyers bid on real estate, and actually initiate transactions online. TechCrunch quotes David Lawee, one of the partners leading Google Capital, as saying:

    “Auction.com has quietly built one of the largest marketplaces on the web. We think Auction.com can fundamentally change how real estate, and particularly commercial real estate, can be bought and sold, leveling the playing field for smaller investors.”

    The money will reportedly be used for product expansion, mobile development and sales/marketing.

    Product expansion and mobile development were apparently on SurveyMonkey’s list of post-funding priorities as well. Since the Google Capital announcement (though the investment was made last year), that company has launched a new mobile app.

    Image via Auction.com

  • eBay Adds More Countries To Global Shipping Program

    eBay announced today that it has added Switzerland and Norway to the list of countries sellers can ship to using the Global Shipping Program, which includes 42 additional countries.

    “As you know, the Global Shipping Program helps you expand your sales to millions of eager international buyers,” the company says. “Through the program (which is free to join), you can sell to buyers in dozens of countries—just mail your packages to a shipping center located in the US. You’re only responsible for the domestic leg of shipping.”

    eBay says, “Once your item arrives at the designated US shipping center, the Global Shipping Program takes care of ALL facets of international processing, including: Completion of customs forms; Remitting applicable import charges pre-paid by your buyer; Shipping the package to the buyer—with end-to-end international tracking.”

    Sellers’ shipping-related Detailed Seller Ratings are protected, eBay says. Sellers aren’t responsible for loss or damage that occurs throughout the international shipping process.

    In addition to Switzerland and Norway, the Global Shipping Program includes the following eligible countries: Australia, Austria, Belgium, Bulgaria, Canada, China, Cyprus, Czech, Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Indonesia, Ireland, Israel, Italy, Japan, Latvia, Lithuania, Malta, Mexico, Netherlands, New Zealand, Philippines, Poland, Portugal, Romania, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Slovakia, Slovenia, Taiwan, Thailand and United Kingdom.

    Image via eBay

  • Worldwide LTE Subscriptions Steadily Rising

    Worldwide LTE Subscriptions Steadily Rising

    The smartphone market is continuing to grow, yet most of the world does not yet have access to 4G LTE connections. This is set to change in the near future, however, as emerging nations such as China begin to build out their infrastructure.

    Market research firm ABI Research today released a new report showing that LTE subscriptions worldwide hit 229.7 million last year. This number is expected to rise rapidly within the coming years and the firm is predicting that LTE subscriptions will hit 2 billion by the end of 2019.

    With established markets such as the U.S. beginning to see smartphone and tablet growth slow, growth in LTE subscriptions is being concentrated more in emerging markets. This is particularly true in Asia, where aggressive LTE technology rollouts have combined to add millions of new LTE subscribers in the past year.

    “Among the LTE subscription growth, Asia-Pacific contributes the most with a 49% market share. The second greatest contributor is North America with an 18% share,” comments Marina Lu, research associate at ABI Research. “The large population base in Asia combined with rapid LTE network deployment and cost-competitive smartphones has accelerated the remarkable subscriber adoption.”

    ABI’s report also predicts that several LTE-related technologies will grow along with the overall industry. LTE-Advanced is expected to hit 750 million subscribers by the year 2019 and the voice over LTE industry is expected to take off as network coverage expands. Mobile revenue is predicted to grow since LTE subscribers spend more on average.

  • Sony To Shut Down 20 Of Its U.S. Retail Stores

    Sony To Shut Down 20 Of Its U.S. Retail Stores

    Electronics giants operating their own retail stores has always been a weird proposition. Apple made it work by offering a retail experience that you just can’t find anywhere else, but others haven’t been so successful. Sony is one of those companies, and now its US retail presence is getting decimated.

    Sony announced this week that it will be shutting down 20 of its 31 U.S. retail stores this year. The stores being closed are in areas that you wouldn’t expect to see Sony stores in the first place – like Virginia and Pennsylvania. Those that will remain open are primarily located in California and New York with two locations in Florida and one location in Texas remaining open as well.

    “While these moves were extremely tough, they were absolutely necessary to position us in the best possible place for future growth,” said Mike Fasulo, President and COO of Sony Electronics. “I am entirely confident in our ability to turn the business around, in achieving our preferred future, and continue building on our flawless commitment to customer loyalty through the complete entertainment experience only Sony can offer.”

    Here’s the full list of stores being closed:

    Tysons, VA
    University Village, WA
    Galleria Dallas, TX
    Forum Shops, NV
    Pentagon, VA
    Boca Raton, FL
    Menlo Park, NJ
    Las Americas, CA
    Camarillo, CA
    Aurora, IL
    Gilroy, CA
    Wrentham, MA
    Pleasant Prairie, WI
    San Marcos, TX
    Cherry Creek, CO
    Dolphin, FL
    Century City, CA
    Valley Fair, CA
    Comcast, PA
    Central Valley, N.Y. (Woodbury Common Outlets)

    Alongside the announcement of the above store closings, Sony also announced that it will be laying off 1,000 employees by the end of the year. These 1,000 employees are part of the original 5,000 employees that Sony previously announced it would be laying off. There’s no word yet on when the other 4,000 will be getting the axe or which parts of the company they’ll come from.

    Image via Wikimedia Commons

  • Square Pickup Lets You Place Orders With Square-Using Restaurants

    Square Pickup Lets You Place Orders With Square-Using Restaurants

    Square is testing a new app called Square Pickup, available by invitation only. The app reportedly lets users order food from restaurants who use Square, and is testing with “several San Francisco restaurants”.

    Presumably it would be used with non-restaurant businesses as well.

    Priceonomics.com first reported on the app after noticing it when picking up lunch. You can check out their article for screenshots.

    After using it, the site suggests the product could be “a massive step in bringing more offline commerce online”.

    The news comes just after a report from The Information indicating that Square is also testing a service in which it gives merchants “thousands of dollars” in capital to help them grow. That report also indicates that the company is considering taking a new round of funding, and delaying its IPO, which was expected to happen this year.

    It’s been a pretty busy month for Square. The company also announced its first grocer partnership with Whole Foods Markets, and launched new money-requesting functionality to its Square Cash product.

    The company has also made headlines for poor handling of a chargeback situation with one New York business owner, though its later efforts once the story emerged were somewhat redeeming.

    Square is also said to be looking to offer more big businesses custom rates.

    Image via Square

  • GoDaddy Partners With Spree To Offer eCommerce Solutions To Small Businesses

    Last year, GoDaddy moved away from super models to focus on small businesses and Jean-Claude Van Damme. Since then, the the company has entered into a number of key strategic partnerships to help out small businesses with everything from email management to eCommerce solutions.

    GoDaddy announced today that it has partnered up with Spree Commerce to offer its open-source eCommerce platform to small businesses. The partnership is another step in GoDaddy’s strategy of democratizing technology for small businesses.

    “Many of our customers do not have the technical expertise to build a successful online store, yet they all want to serve their customers who are increasingly online and mobile,” said GoDaddy Head of Product for Presence and Commerce Sandeep Grover. “With GoDaddy, our vision is to make it simple for any small business to create an eye-catching store that will stand out and help them sell more. With Spree Commerce on the back-end, we’ll be translating the great open-source work of the Spree community into a store experience available to the masses.”

    It’s noted that the eCommerce segment is expected to hit $370 billion by 2017. GoDaddy wants to be part of that growing trend by getting as many small businesses as it can online before then. With Spree, it will be able to do just that.

    “We’re pleased to partner with GoDaddy to provide a technology solution that can scale to tens of thousands of stores,” said Spree Commerce CEO Sean Schofield. “We also look forward to GoDaddy joining our worldwide open source movement, which is constantly innovating together to improve our platform’s capabilities.”

    As Schofield mentioned above, GoDaddy will be joining the open source movement with this latest partnership. In exchange for using Spree’s technology, GoDaddy will be contributing back to its open source community.

    “GoDaddy is embracing open ecosystems and communities in open source. This commitment not only allows GoDaddy to be a leader in the hosting and domains industries by adopting and contributing to the latest innovations in open source, but also expand our large-scale systems expertise,” said GoDaddy CTO Elissa Murphy. “Over the next year, GoDaddy will adopt and contribute new innovations focused on the VSB (very small business) customer to these communities.”

    Those using GoDaddy for their small business needs will be able to utilize Spree Commerce starting this Spring.

    Image via GoDaddy/YouTube

  • Demand Media Earnings Continue To Suffer Google’s Wrath

    Demand Media reported its financial results for Q4 and fiscal 2013 on Tuesday. The company continues to suffer at the hands of Google algorithm changes (it just so happens that this week marks the three-year anniversary of the Panda update).

    While things seemed to be going better for Demand Media after it navigated around its initial Panda obstacles, somewhere down the line, Google’s algorithm caught up with the company’s properties (specifically eHow) once again. Last quarter, the company reported revenue decline thanks to the lost of search referrals, and this report paints a similar picture.

    Revenue declined by 6% to $96.7 million for the quarter, and the outlook isn’t looking much better.

    CFO Mel Tang said, “We need to fix eHow.”

    On top of that, parking revenue and domain sales are down 33% for the year, compared to 2012.

    Interim CEO Shawn Colo said, “The fourth quarter was highlighted by solid performance from Society6, Content Solutions and our registrar business, offset by continued declines in the Company’s core eHow business. Additionally, we have made steady progress against key initiatives, such as product improvements on Society6 and relaunching the Livestrong.com website, while continuing to prepare for our upcoming spin-off of Rightside Group. I continue to be excited about long-term strategic opportunities within our large and growing markets.”

    Demand Media stock is down nearly 10% on Wednesday morning.

    Since the earnings call, the company has announced a new strategic advertising partnership with Healthline, which will see the latter creating digital ad solutions and exclusively representing key categories for LiveStrong.com.

    Here’s the release in its entirety:

    SANTA MONICA, Calif.–(BUSINESS WIRE)– Demand Media, Inc. (NYSE: DMD), a leading digital content & media and domain name services company, today reported financial results for the fourth quarter and fiscal year ended December 31, 2013.

    “The fourth quarter was highlighted by solid performance from Society6, Content Solutions and our registrar business, offset by continued declines in the Company’s core eHow business. Additionally, we have made steady progress against key initiatives, such as product improvements on Society6 and relaunching the Livestrong.com website, while continuing to prepare for our upcoming spin-off of Rightside Group,” said Shawn Colo , Interim CEO of Demand Media. “I continue to be excited about long-term strategic opportunities within our large and growing markets.”

    Financial Summary
    In millions, except per share amounts
    Three months ended
    December 31,    		 Year ended
    December 31,
    2013 2012 Change 2013 2012 Change
    Total Revenue $ 96.7 $ 103.1 (6 %) $ 394.6 $ 380.6 4 %
    Content & Media Revenue ex-TAC(1) $ 55.4 $ 62.3 (11 %) $ 230.4 $ 227.0 1 %
    Registrar Revenue 38.6 34.5 12 %   148.2   134.2 10 %
    Total Revenue ex-TAC(1) $ 94.0 $ 96.8 (3 %) $ 378.6 $ 361.2 5 %
    Income (loss) from Operations $ (11.3 ) $ 6.1 NA $ (18.5 ) $ 8.7 NA
    Adjusted EBITDA(1) $ 18.0 $ 29.4 (39 %) $ 88.4 $ 103.4 (15 %)
    Net income (loss) $ (11.5 ) $ 4.7 NA $ (20.2 ) $ 6.2 NA
    Adjusted net income(1) $ 3.0 $ 10.8 (72 %) $ 23.2 $ 34.3 (32 %)
    EPS – diluted $ (0.13 ) $ 0.05 NA $ (0.23 ) $ 0.07 NA
    Adjusted EPS – diluted(1) $ 0.03 $ 0.12 (75 %) $ 0.26 $ 0.39 (33 %)
    Cash Flow from Operations $ 9.7 $ 26.0 (63 %) $ 76.2 $ 91.0 (16 %)
    Free Cash Flow(1) $ 8.3 $ 17.1 (51 %) $ 44.4 $ 62.3 (29 %)
    ____________________
    (1) These non-GAAP financial measures are described below and reconciled to their comparable GAAP measures in the accompanying tables.

    Q4 2013 Financial Summary:

    • Total revenue ex-TAC declined 3% year-over-year, with 12% year-over-year growth in Registrar revenue offset by an 11% decline in Content & Media revenue ex-TAC. Excluding the acquisitions of Society6 and Name.com, total revenue ex-TAC decreased 15%.
      • Registrar revenue grew 12% year-over-year, primarily due to the addition of Name.com, which was acquired at the end of Q4 2012. Excluding the acquisition of Name.com, Registrar revenue increased 2%.
      • Owned & Operated revenue decline of 5% was driven primarily by reductions in search engine referral traffic, offset by revenue of $8.4 million from Society6, which was acquired at the end of Q2 2013. Excluding the acquisition of Society6, Owned & Operated revenue decreased 23%.
      • Network revenue ex-TAC declined 31% due primarily to $3.5 million less revenue from the Company’s YouTube Channels as well as declines in the Company’s Social Media and Network Monetization businesses, offset partially by growth in Content Solutions.
    • Adjusted EBITDA decreased 39% year-over-year, primarily reflecting the negative impact from search engine referral traffic on high-margin revenues and a mix shift to lower margin commerce and Registrar revenue.

    “We generated over $8 million of free cash flow in the fourth quarter and over $44 millionfor the year,” said Demand Media’s CFO Mel Tang . “We will continue to invest our free cash flow into our strategic content, commerce and new gTLD initiatives.”

    Business Highlights:

    Content & Media:

    • January 2014 US and Worldwide comScore Rankings:
      • On a consolidated basis, Demand Media ranked as the #19 US web property and Demand Media’s properties reached more than 88 million unique users worldwide.
      • eHow.com ranked as the #27 website in the US and reached more than 50 million unique users worldwide.
      • Livestrong / eHow Health ranked as the #3 Health property in the US, with more than 20 million unique users worldwide.
      • Cracked ranked as the #5 Humor property in the US, with more than 8 million unique users worldwide.
    • In Q4 2013, our Content Solutions business, which delivers custom and hosted content marketing services to partners, grew revenue ex-TAC 50% year-over-year to$2.8 million.
    • During Q4 2013, Society6 had a record $8.4 million of revenue and its sales on Cyber Monday increased 73% year-over-year. Society6 also expanded its product line-up to include mugs, baby onesies, kids T-shirts and a calendar created in collaboration with the artist community.

    Domain Name Services:

    • Launched our back-end registry platform in Q4 2013, powering the launch for over 60 new gTLDs and over 150,000 domain registrations to date.
    • Signed our first registry operator agreements with ICANN in Q4 2013, and have signed 14 agreements to date, including .dance, .democrat, .immobilien and .ninja, which are currently in their ‘sunrise’ launch phase.
    • Our registry entered into its first agreements with registrars to distribute our owned gTLDs, with over 40 signed to date.
    • Our eNom and Name.com registrar channels signed agreements with new registry operators to distribute new gTLDs and have launched over 80 new gTLDs to date.
    Operating Metrics:
    Three months ended
    December 31,    		 Year ended
    December 31,
    2013 2012 %
    Change    		 2013 2012 %
    Change
    Content & Media Metrics:
    Owned and operated websites
    Page views(1) (in millions) 4,054 3,354 21 % 16,348 13,192 24 %
    RPM(2) $ 11.38 $ 14.55 (22 )% $ 11.96 $ 13.53 (12 )%
    Network of customer websites
    Page views(1) (in millions) 2,245 4,530 (50 )% 16,793 18,989 (12 )%
    RPM(2) $ 5.30 $ 4.38 21 % $ 3.03 $ 3.58 (15 )%
    RPM ex-TAC(3) $ 4.12 $ 2.98 38 % $ 2.08 $ 2.55 (18 )%
    Registrar Metrics:
    End of Period # of Domains(4) (in millions) 15.0 13.7 9 % 15.0 13.7 9 %
    Average Revenue per Domain(5) $ 10.47 $ 10.09 4 % $ 10.36 $ 10.19 2 %
    ____________________
    (1) Page views represent the total number of web pages viewed across (a) our owned and operated websites and/or (b) our network of customer websites, to the extent that the viewed customer web pages host the Company’s monetization, social media and/or content services.
    (2) RPM is defined as Content & Media revenue per one thousand page views.
    (3) RPM ex-TAC is defined as Content & Media revenue ex-TAC per one thousand page views.
    (4) A domain is defined as an individual domain name registered by a third-party customer on our platform for which we have begun to recognize revenue.
    (5) Average revenue per domain is calculated by dividing Registrar revenue for a period by the average number of domains registered in that period. Average revenue per domain for partial year periods is annualized.

    Q4 2013 Operating Metrics:

    • Owned & Operated page views increased 21% year-over-year to 4.1 billion, driven primarily by mobile page view growth on our core Owned & Operated sites, which more than offset significant declines in search engine referral traffic. Owned & Operated RPM decreased 22% year-over-year, reflecting the mix shift to lower yielding mobile page views as well as lower direct display advertising, offset partially by increased revenue from Society6.
    • Revenue per visit to our Owned & Operated Content sites was $0.05, up 25% year-over-year.
    • Network page views decreased 50% year-over-year to 2.2 billion, reflecting the Company’s decision in Q3 2013 to focus its monetization efforts on its Owned & Operated properties. Additionally, there were lower reported page views from its Pluck customers. Network RPM ex-TAC increased 38% year-over-year, reflecting higher monetization of our Social Media and Monetization page views.
    • End of period domains increased 9% year-over-year to 15.0 million, driven by the acquisition of Name.com, with average revenue per domain up 4% year-over-year, due to higher average revenue per domain on Name.com.

    Business Outlook:

    The following forward-looking information includes certain projections made by management as of the date of this press release. The Company does not intend to revise or update this information, except as required by law, and may not provide this type of information in the future. Due to a variety of factors, actual results may differ significantly from those projected. The factors that may affect results include, without limitation, the factors referenced later in this announcement under the caption “Cautionary Information Regarding Forward-Looking Statements.” These and other risk factors are discussed in more detail in the Company’s filings with the Securities and Exchange Commission.

    Due to the planned separation of the Company’s domain name services business and evolution of its content and media business, the Company is replacing quarterly and annual guidance with a discussion of expected short and long term trends.

    In 2014, the Company expects the following:

    • Slightly declining revenue year-over-year driven by the Company’s shift away from traditional branded display sales and continued declines in eHow coupled with product and ad format changes to improve user experience, offset partially by growth in Society6, Content Solutions and Registrar revenue.
    • Adjusted EBITDA margins in the mid-teens, reflective of the inclusion of $8-$10 million of annual gTLD operating expenses post the launch of our first gTLDs inFebruary 2014, $10-$15 million of operating expense related to content remediation and infrastructure ramp for Society6 and Content Solutions, and a revenue mix shift to lower margin commerce and domain name services revenue.
    • Significant free cash flow generation.

    Longer term, the Company expects the following:

    • Demand Media standalone revenue driven by a return to growth in eHow, as well as our growing Content Solutions and commerce businesses contributing a significantly higher percentage of total revenue.
    • Rightside revenue driven by growth in domain name services revenue from the new gTLD opportunity, partially offset by continued declines in domain parking revenue.
    • For both businesses, we expect margin expansion and to continue to generate significant free cash flow.

    Conference Call and Webcast Information

    Demand Media will host a corresponding conference call and live webcast at 5:00 p.m. Eastern time today. To access the conference call, dial 877.430.7751 and reference conference ID 51526222. To participate on the live call, analysts should dial-in at least 10 minutes prior to the commencement of the call. A live webcast also will be available on the Investor Relations section of the Company’s corporate website athttp://ir.demandmedia.com and via replay beginning approximately two hours after the completion of the call.

    About Non-GAAP Financial Measures

    To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we use certain non-GAAP financial measures described below. The presentation of this additional financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of Non-GAAP Measures” included at the end of this release.

    The non-GAAP financial measures presented in this release are the primary measures used by the Company’s management and board of directors to understand and evaluate its financial performance and operating trends, including period-to-period comparisons, to prepare and approve its annual budget and to develop short and long term operational plans. Additionally, Adjusted EBITDA has been the primary measure used by the compensation committee of the Company’s board of directors to establish the funding targets for and fund its annual bonus pool for the Company’s employees and executives. We believe our presented non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) management frequently uses them in its discussions with investors, commercial bankers, securities analysts and other users of its financial statements.

    Revenue ex-TAC is defined by the Company as GAAP revenue less traffic acquisition costs (TAC). TAC comprises the portion of Content & Media GAAP revenue shared with the Company’s network customers. Management believes that Revenue ex-TAC is a meaningful measure of operating performance because it is frequently used for internal managerial purposes and helps facilitate a more complete period-to-period understanding of factors and trends affecting the Company’s underlying revenue performance of itsContent & Media service offering.

    Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) is defined by the Company as net income (loss) before income tax expense, interest and other income (expense), depreciation, amortization, stock-based compensation, as well as the financial impact of acquisition and realignment costs, the formation expenses directly related to its gTLD initiative, net gains or losses on withdrawals of interest in gTLD applications, and any gains or losses on certain asset sales or dispositions. Acquisition and realignment costs include such items, when applicable, as (1) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (2) legal, accounting and other professional fees directly attributable to acquisition activity, (3) employee severance payments attributable to acquisition or corporate realignment activities and (4) expenditures related to the separation of Demand Media into two distinct publicly traded companies. Management does not consider these expenses to be indicative of the Company’s ongoing operating results or future outlook.

    Management believes that this non-GAAP financial measure reflects the Company’s business in a manner that allows for meaningful period-to-period comparisons and analysis of trends. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of the Company’s underlying recurring revenue and operating costs, which is focused more closely on the current costs necessary to utilize previously acquired long-lived assets. In addition, management believes that it can be useful to exclude certain non-cash charges because the amount of such expenses is the result of long-term investment decisions in previous periods rather than day-to-day operating decisions. For example, due to the long-lived nature of a majority of its media content, the revenue generated by the Company’s media content assets in a given period bears little relationship to the amount of its investment in media content in that same period. Accordingly, management believes that content acquisition costs represent a discretionary long-term capital investment decision undertaken at a point in time. This investment decision is clearly distinguishable from other ongoing business activities, and its discretionary nature and long-term impact differentiate it from specific period transactions, decisions regarding day-to-day operations, and activities that would have an immediate impact on operating or financial performance if materially changed, deferred or terminated.

    Adjusted Earnings Per Share (Adjusted EPS) is defined by the Company as Adjusted Net Income divided by the weighted average number of shares outstanding. Adjusted Net Income is defined by the Company as net income (loss) before the effect of stock-based compensation, amortization of intangible assets acquired via business combinations, accelerated amortization of content intangible assets removed from service, acquisition and realignment costs, the formation expenses directly related to its gTLD initiative, net gains or losses on withdrawals of interest in gTLD applications, and any gains or losses on certain asset sales or dispositions, and is calculated using the application of a normalized effective tax rate. Acquisition and realignment costs include such items, when applicable, as (1) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (2) legal, accounting and other professional fees directly attributable to acquisition activity, (3) employee severance payments attributable to acquisition or corporate realignment activities, and (4) expenditures related to the separation of Demand Mediainto two distinct publicly traded companies. Management does not consider these expenses to be indicative of the Company’s ongoing operating results or future outlook.

    Management believes that Adjusted Net Income and Adjusted EPS provide investors with additional useful information to measure the Company’s underlying financial performance, particularly from period to period, because these measures are exclusive of certain non-cash expenses not directly related to the operation of its ongoing business (such as amortization of intangible assets acquired via business combinations, as well as certain other non-cash expenses such as purchase accounting adjustments and stock-based compensation) and include a normalized effective tax rate based on the Company’s statutory tax rate.

    Discretionary Free Cash Flow is defined by the Company as net cash provided by operating activities excluding cash outflows from acquisition and realignment activities, including expenditures related to the separation of Demand Media into two distinct publicly traded companies, and the formation expenses directly related to its gTLD initiative, less capital expenditures to acquire property and equipment. Free Cash Flow is defined by the Company as Discretionary Free Cash Flow less investments in intangible assets and is not impacted by net payments for gTLD applications, which were $3.9 million and $18.2 million for the twelve months ended December 31, 2013 and 2012, respectively, or net proceeds from the withdrawal of interest in gTLD applications, which were $5.6 million for the year ended December 31, 2013. Management believes that Discretionary Free Cash Flow and Free Cash Flow provide investors with additional useful information to measure operating liquidity because they reflect the Company’s underlying cash flows from recurring operating activities after investing in capital assets and intangible assets. These measures are used by management, and may also be useful for investors, to assess the Company’s ability to generate cash flow for a variety of strategic opportunities, including reinvestment in the business, pursuing new business opportunities, potential acquisitions, payment of dividends and share repurchases.

    The use of these non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense, or cash flows that affect the Company’s operations. An additional limitation of these non-GAAP financial measures is that they do not have standardized meanings, and therefore other companies may use the same or similarly named measures but exclude different items or use different computations. Management compensates for these limitations by reconciling these non-GAAP financial measures to their most comparable GAAP financial measures within its financial press releases. Non-GAAP financial measures should be considered in addition to, not as a substitute for, financial measures prepared in accordance with GAAP. Further, these non-GAAP financial measures may differ from the non-GAAP financial information used by other companies, including peer companies, and therefore comparability may be limited. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. The accompanying tables have more details on the GAAP financial measures and the related reconciliations.

    About Demand Media

    Demand Media, Inc. (NYSE: DMD) is a leading digital media and domain name services company that informs and entertains one of the internet’s largest audiences, helps advertisers find innovative ways to engage with their customers and enables publishers, individuals and businesses to expand their online presence. Headquartered in Santa Monica, CA, Demand Media has offices in North America, South America and Europe. For more information about Demand Media, please visit www.demandmedia.com.

    About Rightside

    Rightside™ inspires and delivers new possibilities for consumers and businesses to define and present themselves online. The company, with its affiliates, is a leading provider of domain name services, offering one of the industry’s most comprehensive platforms for the discovery, registration, development, and monetization of domain names. This includes 15 million names under management, the most widely used domain name reseller platform, more than 20,000 distribution partners, an award-winning retail registrar, the leading domain name auction service through its NameJet joint venture and an interest in more than 100 new Top Level Domain registry operator agreements or applications through Rightside affiliate, United TLD Holdco Limited, trading as Rightside Registry. Following its planned separation from Demand Media, Rightside will be home to some of the most admired brands in the industry, including eNom, Name.com, andNameJet (in partnership with Web.com). Headquartered in Kirkland, WA, Rightside has offices in North America, Europe and Australia. For more information please visitwww.rightside.co.

    Cautionary Information Regarding Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements involve risks and uncertainties regarding the Company’s future financial performance, and are based on current expectations, estimates and projections about our industry, financial condition, operating performance and results of operations, including certain assumptions related thereto. Statements containing words such as guidance, may, believe, anticipate, expect, intend, plan, project, projections, business outlook, and estimate or similar expressions constitute forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered an indication of future performance. Potential risks and uncertainties that could affect our operating and financial results are described in our annual report on Form 10-K for the fiscal year ending December 31, 2012 filed with the Securities and Exchange Commission (http://www.sec.gov) on March 5, 2013,as such risks and uncertainties may be updated in our annual and quarterly reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including, without limitation, information under the captions Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations. These risks and uncertainties include, among others: our ability to complete a separation of our business into two separate public companies and unanticipated developments that may delay or negatively impact such a transaction; the possibility that we may decide not to proceed with the separation of our business as previously announced if we determine that alternative opportunities are more favorable to our stockholders; the impact and possible disruption to our operations from pursuing the separation transaction; the expectation that the separation transaction will be tax-free; revenue and growth expectations for the two independent companies, and the ability of each company to operate as an independent entity, following the separation transaction; changes in the methodologies of internet search engines, including ongoing algorithmic changes made by Google as well as possible future changes, and the impact such changes may have on page view growth and driving search related traffic to our owned & operated websites and the websites of our network customers; the impact of product and ad format changes to improve user experience; changes in our content creation and distribution platform, including the possible repurposing of content to alternate distribution channels, reduced investments in intangible assets or the sale or removal of content; our ability to successfully grow adjacent lines of business such as commerce and content solutions as part of our growth strategy; the effects of shifting consumption of media content from desktop to mobile; our ability to successfully pursue and implement our gTLD initiative; our dependence on material agreements with a specific business partner for a significant portion of our revenue; changes in amortization or depreciation expense due to a variety of factors; potential write downs, reserves against or impairment of assets including receivables, goodwill, intangibles (including media content) or other assets; and our ability to retain key personnel. From time to time, we may consider acquisitions or divestitures that, if consummated, could be material. Any forward-looking statements regarding financial metrics are based upon the assumption that no such acquisition or divestiture is consummated during the relevant periods. If an acquisition or divestiture were consummated, actual results could differ materially from any forward-looking statements. The Company does not intend to revise or update the information set forth in this press release, except as required by law, and may not provide this type of information in the future.

    Demand Media, Inc. and Subsidiaries

    Unaudited Condensed Consolidated Statements of Operations

    (In thousands, except per share amounts)
    Three months ended
    December 31,    		 Year endedDecember 31,
    2013 2012 2013 2012
    Revenue $ 96,661 $ 103,142 $ 394,598 $ 380,578
    Operating expenses:
    Service costs (exclusive of amortization of intangible assets shown separately below)(1) (2) 55,127 48,865 204,763 181,018
    Sales and marketing (1) (2) 9,587 12,823 46,445 46,501
    Product development (1) (2) 10,920 9,719 44,187 40,708
    General and administrative (1) (2) 18,677 16,171 73,277 63,025
    Amortization of intangible assets 13,685 9,460 44,409 40,676
    Total operating expenses 107,996 97,038 413,081 371,928
    Income (loss) from operations (11,335 ) 6,104 (18,483 ) 8,650
    Interest income 5 8 21 42
    Interest expense (668 ) (157 ) (1,642 ) (622 )
    Other income (expense), net (12 ) (34 ) (61 ) (111 )
    Gain on sale of assets 1,666 – 4,232 –
    Income (loss) before income taxes (10,344 ) 5,921 (15,933 ) 7,959
    Income tax expense (1,177 ) (1,172 ) (4,241 ) (1,783 )
    Net income (loss) $ (11,521 ) $ 4,749 $ (20,174 ) $ 6,176
     
    (1) Stock-based compensation expense included in the line items above:
    Service costs $ 700 $ 679 $ 2,778 $ 2,820
    Sales and marketing 851 1,597 5,328 6,118
    Product development 1,084 1,283 5,186 6,452
    General and administrative 3,120 3,823   14,092 15,978
    Total stock-based compensation expense $ 5,755 $ 7,382 $ 27,384 $ 31,368
    (2) Depreciation expense included in the line items above:
    Service costs $ 3,352 $ 3,663 $ 14,213 $ 14,452
    Sales and marketing 84 108 379 453
    Product development 203 238 865 1,025
    General and administrative 1,527 1,025 5,044 3,728
    Total depreciation expense $ 5,166 $ 5,034 $ 20,501 $ 19,658
    Net income (loss) per share – basic $ (0.13 ) $ 0.06 $ (0.23 ) $ 0.07
    Net income (loss) per share – diluted $ (0.13 ) $ 0.05 $ (0.23 ) $ 0.07
    Weighted average number of shares – basic 90,310 86,140 88,534 84,553
    Weighted average number of shares – diluted 90,310 88,444 88,534 87,237
    Demand Media, Inc. and Subsidiaries
    Unaudited Condensed Consolidated Balance Sheets
    (In thousands)
    December 31,
    2013    		 December 31,
    2012
    Assets
    Current assets
    Cash and cash equivalents $ 153,511 $ 102,933
    Accounts receivable, net 33,301 45,517
    Prepaid expenses and other current assets 7,826 6,041
    Deferred registration costs 66,273 57,718
    Total current assets 260,911 212,209
    Property and equipment, net 42,193 35,467
    Intangible assets, net 88,766 91,746
    Goodwill 347,382 266,349
    Deferred registration costs, less current portion 12,514 11,320
    Other long-term assets 25,322 20,906
    Total assets $ 777,088 $ 637,997
    Liabilities and Stockholders’ Equity
    Current liabilities
    Accounts payable $ 12,814 $ 10,471
    Accrued expenses and other current liabilities 34,679 40,489
    Deferred tax liabilities 22,415 18,892
    Current portion of long-term debt 15,000 –
    Deferred revenue 84,955 75,142
    Total current liabilities 169,863 144,994
    Deferred revenue, less current portion 16,929 15,965
    Long-term debt 81,250 –
    Other liabilities 13,041 4,847
    Stockholders’ equity
    Common stock and additional paid-in capital 611,039 562,703
    Treasury stock (30,767 ) (25,932 )
    Accumulated other comprehensive income 502 15
    Accumulated deficit (84,769 ) (64,595 )
    Total stockholders’ equity 496,005 472,191
    Total liabilities and stockholders’ equity $ 777,088 $ 637,997
    Demand Media, Inc. and Subsidiaries
    Unaudited Condensed Consolidated Statements of Cash Flows
    (In thousands)
    Three months ended
    December 31,    		 Year ended
    December 31,
    2013 2012 2013 2012
    Cash flows from operating activities:
    Net income (loss) $ (11,521 ) $ 4,749 $ (20,174 ) $ 6,176
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:
    Depreciation and amortization 18,851 14,494 64,910 60,334
    Stock-based compensation 5,755 7,382 27,384 31,368
    Gain on other assets, net (1,666 ) – (4,232 ) –
    Other 691 1,134 3,038 1,717
    Net change in operating assets and liabilities, net of effect of acquisitions (2,375 ) (1,722 ) 5,237 (8,612 )
    Net cash provided by operating activities 9,735 26,037 76,163 90,983
    Cash flows from investing activities:
    Purchases of property and equipment (3,986 ) (5,283 ) (26,746 ) (17,708 )
    Purchases of intangibles (3,509 ) (4,647 ) (16,772 ) (13,237 )
    Proceeds from gTLD withdrawals, net 2,740 – 5,616 –
    Payments for gTLD applications, net (3,546 ) (16,200 ) (3,949 ) (18,202 )
    Cash paid for acquisitions (397 ) – (73,626 ) (17,480 )
    Change in restricted cash – – – (855 )
    Other 473 – 942 –
    Net cash used in investing activities (8,225 ) (26,130 ) (114,535 ) (67,482 )
    Cash flows from financing activities:
    Long-term debt borrowings 50,000 – 120,000 –
    Long-term debt repayments (3,750 ) – (23,750 ) –
    Debt issuance costs – – (1,936 ) (144 )
    Repurchases of common stock – (4,913 ) (4,835 ) (8,869 )
    Proceeds from exercises of stock options and contributions to ESPP 253 1,451 4,746 12,467
    Net taxes paid on RSUs vesting and options exercised (834 ) (6,151 ) (4,575 ) (9,496 )
    Other (180 ) (258 ) (620 ) (524 )
    Net cash provided by (used in) financing activities 45,489 (9,871 ) 89,030 (6,566 )
    Effect of foreign currency on cash and cash equivalents (17 ) (19 ) (80 ) (37 )
    Change in cash and cash equivalents 46,982 (9,983 ) 50,578 16,898
    Cash and cash equivalents, beginning of period 106,529 112,916 102,933 86,035
    Cash and cash equivalents, end of period $ 153,511 $ 102,933 $ 153,511 $ 102,933
    Demand Media, Inc. and Subsidiaries
    Reconciliations of Non-GAAP Measures
    (In thousands, except per share amounts)
    Three months ended
    December 31,    		 Year ended
    December 31,
    2013 2012 2013 2012
    Revenue ex-TAC:
    Content & Media revenue $ 58,022 $ 68,633 $ 246,397 $ 246,399
    Less: traffic acquisition costs (TAC) (2,644 ) (6,332 ) (15,989 ) (19,441 )
    Content & Media Revenue ex-TAC 55,378 62,301 230,408 226,958
    Registrar revenue 38,639 34,509 148,201 134,179
    Total Revenue ex-TAC $ 94,017 $ 96,810 $ 378,609 $ 361,137
    Adjusted EBITDA:
    Net income (loss) $ (11,521 ) $ 4,749 $ (20,174 ) $ 6,176
    Income tax expense 1,177 1,172 4,241 1,783
    Interest and other expense, net 675 183 1,682 691
    Gain on gTLD application withdrawals, net(1) (1,666 ) – (4,232 ) –
    Depreciation and amortization 18,851 14,494 64,910 60,334
    Stock-based compensation 5,755 7,382 27,384 31,368
    Acquisition and realignment costs(2) 1,880 314 6,113 446
    gTLD expense(3) 2,875 1,061 8,428 2,650
    Adjusted EBITDA $ 18,026 $ 29,355 $ 88,352 $ 103,448
    Discretionary and Total Free Cash Flow:
    Net cash provided by operating activities $ 9,735 $ 26,037 $ 76,163 $ 90,983
    Purchases of property and equipment (3,986 ) (5,283 ) (26,746 ) (17,708 )
    Acquisition and realignment cash flows(2) 2,861 25 4,587 25
    gTLD expense cash flows(3) 3,239 974 7,152 2,198
    Discretionary Free Cash Flow 11,849 21,753 61,156 75,498
    Purchases of intangible assets (3,509 ) (4,647 ) (16,772 ) (13,237 )
    Free Cash Flow $ 8,340 $ 17,106 $ 44,384 $ 62,261
    Adjusted Net Income and Adjusted EPS:
    Net income (loss) $ (11,521 ) $ 4,749 $ (20,174 ) $ 6,176
    (a) Stock-based compensation 5,755 7,382 27,384 31,368
    (b) Amortization of intangible assets – M&A 3,872 2,572 13,162 10,904
    (c) Content intangible assets removed from service 2,387 237 2,453 2,055
    (d) Acquisition and realignment costs(2) 1,880 314 6,113 446
    (e) Gain on gTLD application withdrawals, net(1) (1,666 ) – (4,232 ) –
    (f) gTLD expense(3) 2,875 1,061 8,428 2,650
    (g) Income tax effect of items (a) – (f) & application of 38% statutory tax rate to pre-tax income (632 ) (5,473 ) (9,962 ) (19,262 )
    Adjusted Net Income $ 2,951 $ 10,842 $ 23,173 $ 34,337
    Adjusted EPS – diluted $ 0.03 $ 0.12 $ 0.26 $ 0.39
    Shares used to calculate Adjusted EPS – diluted 90,911 88,444 89,428 87,237
    (1) Net gains on withdrawals of interest in gTLD applications, included in gain on other assets, net.
    (2) Acquisition and realignment costs include such items, when applicable, as (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition activity, (c) employee severance payments attributable to acquisition or corporate realignment activities and (d) expenditures related to the separation of Demand Media into two distinct publicly traded companies. Management does not consider these costs to be indicative of the Company’s core operating results.
    (3) Comprises formation expenses directly related to the Company’s gTLD initiative that did not generate associated revenue in 2013 or 2012.
    Demand Media, Inc. and Subsidiaries
    Unaudited GAAP Revenue, by Revenue Source
    (In thousands)
    Three months ended
    December 31,    		 Year ended
    December 31,
    2013 2012 2013 2012
    Content & Media:
    Owned and operated websites $ 46,127 $ 48,796 $ 195,546 $ 178,511
    Network of customer websites 11,895 19,837 50,851 67,888
    Total Revenue – Content & Media 58,022 68,633 246,397 246,399
    Registrar 38,639 34,509 148,201 134,179
    Total Revenue $ 96,661 $ 103,142 $ 394,598 $ 380,578
    Three months ended
    December 31,    		 Year ended
    December 31,
    2013 2012 2013 2012
    Content & Media:
    Owned and operated websites 48 % 48 % 49 % 47 %
    Network of customer websites 12 % 19 % 13 % 18 %
    Total Revenue – Content & Media 60 % 67 % 62 % 65 %
    Registrar 40 % 33 % 38 % 35 %
    Total Revenue 100 % 100 % 100 % 100 %

     

    Source: Demand Media, Inc.

    Images via Demand Media

  • PayPal Will Let You Approve Payments Using Your Fingerprint On The Galaxy S5

    PayPal Will Let You Approve Payments Using Your Fingerprint On The Galaxy S5

    Sooner or late, we’re all going to be using biometric data when shopping for anything. While it’s not exactly a fool proof method, it’s certainly better than the current magnetic strips found on credit and debit cards. While such a future is still years away, early adopters who use PayPal can start authenticating purchases with their fingerprints in March.

    PayPal announced today that it has partnered up with Samsung to offer the first fingerprint authentication system at retail shops. The catch is that those wanting to use the new authentication system will have to own the new Samsung Galaxy S5 as it sports a fingerprint scanner on the bottom of the device. By using this scanner, shoppers will be able to approve payments with their finger.

    It’s noted that this is just the first step in PayPal’s Fast IDentity Online Alliance which is moving to replace passwords with stronger security standards. Biometric data is apparently safer than passwords even though it’s been proven that fingerprints can be spoofed just as easily as anything else.

    While fingerprint thieves are certainly worrisome, a more pressing concern is how secure PayPal is going to be with your fingerprints. The company notes that all your financial information is stored in the cloud and never on your device. The fingerprint scanner instantly communicates with the cloud to authorize purchases and doesn’t store biometric data on the device or on PayPal’s servers. In short, the worst that can happen is hackers breaking into PayPal’s servers and stealing your financial information. While that’s certainly bad, they at least won’t have your biometric data which will one day be the most important identifier you have.

    PayPal says its fingerprint authentication system will be available at the Galaxy S5’s launch in April. The service will be available in 26 markets, including Australia, Brazil, Russia, the UK and the U.S.

    Image via PayPal/YouTube

  • Google Adds Channel Intelligence DoubleClick Search Integration

    Google Adds Channel Intelligence DoubleClick Search Integration

    Google announced on Monday that DoubleClick Search will now integrate feed management and optimization capabilities from Channel Intelligence, with the first step coming in the form of an add-on to the DoubleClick Search Commerce Suite.

    The add-on combines Channel Intelligence’s data feed solution with workflow and optimization features from DoubleClick Search, Google says.

    “Especially with the announcement of Shopping campaigns, having a detailed product feed is crucial for retailers to run high-impact search campaigns,” Google says in a blog post.

    Last week, Google announced worldwide availability of Shopping Campaigns, a new PLA type first announced back in October.

    Google also announced that DoubleClick Search would launch full support of Shopping Campaigns within weeks.

    Merchants can build optimized product feeds, use improved feeds to dynamically create and update product listing ads and text ads, and optimize in real time.

    “To further boost performance across these ads, DoubleClick Search bid strategies update bids up to 4 times a day, based on up-to-the-minute conversion information,” Google says. “This scale and speed allows retailers to respond to product inventory changes and market trends at the drop of a hat — even during the busiest holiday shopping days.”

    Google acquired Channel Intelligence roughly a year ago.

    Image via Google

  • Etsy Aims To Help Sellers By Giving Buyers Custom Recommendations

    Etsy Aims To Help Sellers By Giving Buyers Custom Recommendations

    Etsy announced this week that it is making some changes to make the shopping experience better for customers, which will in turn positively affect sellers.

    Etsy’s Heather Burkman says one such change is through custom recommendations. She talks about a recent email test Etsy ran.

    “Half of the buyers received an email with the same set of items, and the other half received custom sets of items based on their individual shopping preferences,” she explains. “The group with customized recommendations were twice as likely to come back and purchase than the group that received the same set. Not only do custom recommendations better connect the right buyers with the right shops, but they also bring exposure to a greater variety of sellers.”

    “We’ll be testing more custom shopping recommendations on Etsy, to give buyers more ways to discover items,” she adds. “Overall, we see value in both curated and custom shopping experiences, as they serve different needs of shoppers.”

    These days Etsy is offering users around 20 million items. In 2013, it sold over $1.35 billion worth of goods.

    Image via Etsy

  • Amazon Coins Now Available On Android Devices

    Last year, Amazon got into the digital currency game with Amazon Coins. Exclusive to Kindle devices, Amazon Coins were an easy way for consumers to buy apps and games on the Amazon Appstore. Now the digital currency is making its way to all Android devices.

    Amazon announced this morning that Amazon Coins are now available to all Android device users in the US, UK and Germany. That means those who use the Amazon Appstore for Android can now buy apps and games using Amazon’s own digital currency instead of real money.

    “Since the launch of Amazon Coins, we’ve been amazed by the number of customers using Coins, as well as how many Coins they’re spending on apps and games,” said Mike George, Vice President, Amazon Appstore and Games. “Because customers can earn Coins when they buy apps in Amazon’s Appstore, and because they can buy Coins themselves at up to a 10% discount, customers love the extra value they get when shopping in our Appstore.”

    Developers need not be concerned by the introduction of Amazon Coins on Android. They will still get the usual 70 percent cut that they would get if the consumer bought their app with real money. In fact, Amazon feels the addition of Amazon Coins to Android will attract more developers to their platform which means more developers making content for its Kindle ecosystem.

    If you want to learn more about Amazon Coins and how it can benefit you as a developer, check out this blog post.

    Image via Amazon

  • Amazon Is Taking Pre-Orders For ‘Arrested Development’ Season 4 DVD

    Arrested Development: Season 4 appears to be coming to DVD in the near future. The season debuted as a Netflix original last May.

    Amazon is now accepting pre-orders for the season, but no release date is given. The price is $20.99. No official announcement has been made so far.

    This wouldn’t be the first Netflix original to hit DVD. House of Cards: Season 1 was released back in June. The first season of Lilyhammer is also available, and Netflix has said that Orange is the New Black will make its way to the format eventually.

    It’s unclear when Arrested Development fans will get to see the next chapter in that saga, though last we heard, the movie is a go, and Netflix will still be involved.

    Via TV Shows on DVD

    Image via Amazon

  • eBay Sellers Speak Out Against Business Policies

    eBay Sellers Speak Out Against Business Policies

    eBay sellers have become frustrated with a feature the site has been automatically turning on for their stores.

    eBay announced Business Policies nearly two years ago. The feature amounts to a set of custom settings for shipping, return and payment information for sellers to manage easily from one central location. Sellers can create multiple policies, and select the ones they want to apply to particular listings with a few clicks. It’s supposed to be a time saver, and make sellers’ lives easier, but the roll-out doesn’t appear to be quite so simple for a lot of sellers.

    Should eBay force the new Business Policies feature on users? Share your thoughts.

    Though announced in the spring of 2012, the company said a few months later that its release would be postponed. Finally, on Friday, eBay said that it has begun turning it on automatically for some sellers. Others can opt in. Either way, it will become the only way to define policies for listings for everybody later this year.

    Sellers have taken to the eBay community forums to express their frustration. Much of this appears to come from the idea that this makes things harder on sellers offering a lot of different items.

    “Yikes, I just looked at it,” writes user gopetersen. “It appears to be designed for sellers who sell quantities of similar items and might be a nightmare (don’t know yet, but potentially) for those who sell a lot of unique and different items. If I’m understanding correctly, it automatically creates a new policy for each item listed with a slightly different policy and then you have to name and manage the lists. So, sellers who sell a lot of different things, to deal with this, we’ll probably have to sit down and work out a group of policies and then assign them to listings as we go. I couldn’t tell from the description if you can set up the names and policies first, but I’m hoping this is the case.”

    D-k_treasures says, “So stupid for the sellers of unique items. Every change creates a new policy – look at the examples. So if you have different shipping changes on each listing, it’s a new policy. Unreal. Where do they come up with this BS?”

    Piedmont33 says, “Don’t ya just love how we aren’t able to run our own businesses and eBay feels that they have to do it for us?”

    Another member expressed fatigue with the site, suggesting that “for many years,” sellers have just stayed because eBay is “the place to sell,” adding, “Some day, some of us,” will just get “tired of this” and “go elsewhere.”

    Ina Steiner at EommerceBytes shares a few more negative reactions:

    So why the poor reception? As initially described in this February 5th, EcommerceBytes Newsflash article, sellers suddenly encountered a drop down menu containing a great number of policies that had long codes that were incomprehensible. “I have a payment policy, and a shipping policy, and a return policy,” wrote one seller at the time. “Now, I get prompts. Having no idea now what this is, I open the drop-down and see about 50 different long-numbered “policies.””

    After being opted in, another seller said the feature interferes with the listing flow – those who haven’t set up policies have to leave the listing, go into their My eBay, navigate to Business Policies, set up the new policies, and then return to listing. “Did eBay do usability testing before rolling this mess out,” they wondered.

    Another seller said they set up set up a shipping policy under “my business policies” for local, national and international. “I called ebay earlier this week about a shipping issue and they resolved it by removing all my policies. I cannot find how to set up policies any more. Help please?”

    Frustration from sellers is certainly nothing new, though we haven’t seen quite the level of complaints in recent memory that we were seeing a few years back, and the company has made numerous changes in the meantime.

    Not all of the feedback is negative luckily (a good thing considering this is supposed to make things easier on sellers).

    Back in the forums, Girlspicer says, for example, “The one thing I do like is that I do mostly free shipping on the other acct and wanted to see what it was like to charge shipping and lower my sale price on this acct with shorter Buy it Now durations. I’ve created 3 policies for shipping – and have to say it’s easier to just pick one of my policies when listing for the shipping charges than manually change things. At first it was like visiting another planet setting all these things up tho because I am not a computer wiz by any means.”

    eBay is offering a few tips for using Business Policies, including: consolidating them, understanding how they’re being used before deleting them or making changes, and giving each policy a name that makes sense to you.

    “Every time you change even one policy detail in a listing, a new business policy is created. To keep things manageable, consolidate your policies into a short list of just a few that make the most sense for your business,” it said in Friday’s announcement. You can see which listings are using a specific policy on the
    ‘Manage your business policies’ page in Selling Manager or Selling Manager Pro…To save time, give each of your policies a name that makes sense to you. You might also rename those created automatically from your existing listings. Add a brief description to make it quick and easy to select the right policy when you’re listing.”

    eBay offers some additional tips here.

    eBay is allowing those who have been opted in to opt out, but as mentioned, this will be forced upon everyone later this year, so any opt out is only temporary. The company does say it’s listening to feedback.

    The company is also catching flack for siding with a buyer over a seller in a dispute, despite evidence in the seller’s favor. The company had sent debt collectors after the seller, but when taken to small claims court, eBay ultimately paid the seller for the item as well as for additional money it had removed from his PayPal account, and court costs. The seller is still seeking compensation for time spent fighting for his case.

    Sell on eBay? What are your thoughts about Business Policies? Let us know in the comments.

    Image via eBay

  • Square Looks To Offer More Big Businesses Custom Deals

    Square is reportedly looking to offer more merchants custom rates.

    According to TechCrunch, the company is “aggressively working to do more custom pricing for merchants, especially chains and big names” as a move to get bigger brands using its services.

    Last week, Square announced its first major partnership since the big Starbucks deal a year and a half ago, with entry into Whole Foods Markets. While it’s certainly a major brand, Whole Foods hasn’t entirely committed to Square (which got some bad press from a pissed off small business last week as well).

    Square Register and Square Stand will be used in Whole Foods sandwich counters, juice and coffee bars, pizzerias, and beer and wine bars, but apparently not in the regular grocery checkout lines, at least for now. Some of the stores will serve as “lab stores” testing additional Square integrations, so perhaps Square will make it into these lines in such locations.

    As TechCrunch notes, Square’s deal with Starbucks included custom pricing, and it’s likely that this is the case for Whole Foods as well. Leena Rao writes:

    Now, any larger chain merchant can apply for custom pricing via Square’s site. For example, Square tells TechCrunch that the Butterfly Studio Salon in New York City is processing millions in payments per year, and has negotiated a custom rate of 2 percent for each swipe using Square. The custom pricing allows merchants who are growing to stay with Square instead of moving to a POS system with better rates.

    Indeed, Square offers a form for “larger businesses with growing sales” here, noting that pricing starts at 2.75% and gets lower as you grow.

    “We want to make sure you know exactly how Square can meet your business’ unique needs,” it says.

    Service options include Beauty and Personal Care; Charities, Education and Membership; Food and Drink; Health Care and Fitness; Home and Repair; Leisure and Entertainment; Professional Services; Retail; Transportation; and Casual Use.

    Businesses are then prompted to select their estimated annual revenue, and enter their email address, phone number business name and name.

    According to Rao, Square is also ramping up its sales force, which will be used to seek out more of these custom deals.

    Last week, Square launched a new feature for its Square Cash product, which lets users easily email money to one another. Now, users can also request money from those who owe using a similar format.

    Image via Twitter

  • Business Owner Details Getting ‘Screwed By Square’

    Business Owner Details Getting ‘Screwed By Square’

    Alex Shvartsman runs a small store called Kings Games in Brooklyn as well as its e-commerce counterpart. He’s been a longtime Square Reader user, and was an early adopter of Square Market, the company’s online storefront for small businesses.

    “I’ve used the Square Reader (the little square dongle) for close to two years, and their e-commerce site almost literally since they day they launched it last summer,” Shvartsman tells WebProNews.

    He was a happy customer until late last year when someone used stolen credit card numbers to place several large orders on his site, and ultimately got him “screwed by Square,” as he put it in a blog post.

    Before the issue was discovered, the store shipped about $1,800 worth of trading cards to different addresses provided by the criminals. Nothing about the transactions, according to Shvartsman, was suspicious, but in November, he received two chargeback notices from Square totaling about $1,200. He wrote:

    I deal with occasional chargebacks in-store, and through PayPal for our eBay transactions. In all PayPal cases, I have been able to get my money back once I provided proof that we shipped the item where we were supposed to, with tracking and delivery confirmation. Resolving such a case typically takes from a few days to a few weeks.

    Square has a slightly different procedure. For each chargeback, they provided a link asking me to fill out a survey and provide supporting data such as invoices, receipts, and communications with the buyer. None of which I had, since the entire transaction was handled online, directly through Square. That’s OK though — their FAQ suggests that even without additional documentation, they will represent the seller and try to resolve the dispute on their end — just like PayPal would.

    Unlike PayPal however, it seemed that they just withdrew the disputed funds from my store’s bank account, without any additional follow-up.

    At this point, he tried to get in touch with the company, but discovered they offered no phone support, so he was left to settle for hearing back from the company via email a week later only to be told that Square would respond to billing disputes on his behalf, and that it could take up to 90 business days to resolve the disputes. Meanwhile, a third chargeback emerged, bringing the total to about $1,800. He wrote:

    $1800 is a lot of money to me. What’s worse, these items are sold on incredibly low margins. After the wholesale cost, shipping, and processing fees, I make approximately $5 in net profit for each $90 box of trading cards sold. (And that’s not counting fixed costs!) So an $1800 loss wipes out profits from literally tens of thousands of dollars in sales.

    As recently as last week he got another chargeback for another order from November. He emailed Square again, and got a much more prompt response telling him they had deactivated his account, and that he would no longer be able to process credit card transactions using Square, and “for security reasons” could not divulge the reason for the termination.

    An understandably irate Shvartsman blogged:

    So not only has Square done nothing so far to help me resolve these chargebacks, not only did they withdraw 100% of the funds in question from my bank account, but they also punished me for being a victim of fraud by shutting down my account without advance notice, even though I have processed hundreds of legitimate transactions with them before and since this incident.

    I’m out over $2300 to date, but this will end up costing me even more money in lost business. This Monday alone, my employees and I packed and shipped out approximately 250 orders we received through eBay and other seller portals over the weekend. Each of those shipped orders included a flyer inviting our customers to visit our Square-supported site. Those of them who might, will find that they can no longer place orders with us there, and we’ll most likely lose their repeat business. We’re now scrambling to get a PayPal shopping cart installed on the site, but that will take some time.

    Shvartsman tells us a number of people have expressed to him having similar issues with Square. Many, it would turn out, were quite sympathetic to his plight, and ultimately he managed to make some real noise with his blog post. Gawker’s Valleywag and some other publications republished it or otherwise reported on it, and Square itself got the message. So did its competitors.

    Someone from Square customer support called him, and told him that Square had indeed attempted to fight the chargebacks on his behalf, but lost the cases. The support guy told Shvartsman that Square was going to inform him via email “soon,” but since he “expressed a strong desire” to know about the transactions on Twitter, he was given “a more immediate update” by phone.

    Shvartsman wrote in a follow-up post:

    Losing the chargebacks does suck, but I could accept that, if all the other parts of this scenario had played out differently. My real issue was with the lack of communication, which I expressed to him, and he acknowledged that they could have done better in that regard, and are working on improving that aspect of their business.

    Then the conversation got around to the cancellation of the store’s account. He started off by explaining that collectibles are a high-risk sort of item with lots of fraud potential, and that they planned on disallowing the sale of this type of item via Square e-commerce portal in the future. Which is interesting, because how exactly do you define a collectible, and who is going to evaluate listings and enforce this policy? According to Wikipedia, the only type of items Square currently disallows to be sold using their service are firearms.

    The Square representative was at least kind enough to offer that he could still use the Square Reader device in the brick-and-mortar store. His blogged response to that:

    Really, Square? Really? Isn’t it a little like breaking up with someone over text message, and then magnanimously suggesting that you’d be willing to still be friends with them?

    Someone else at Square, he says, also tried to reach him at the store while he was away, which led to him to trying to call a toll-free number only once again finding it impossible to speak with a human. He woke up on Thursday to find that Square had emailed him $2,280.78 – what he says is the full amount of disputed transactions less Square’s 2.75% fee.

    “At this point, I don’t know if they managed to convince the credit card companies to cover these chargebacks after all, or if they decided to pay it out of their own pocket,” he wrote.

    But while dealing with all of this, Shopify and PayPal both became aware of the situation, and stepped in to offer Shvartsman solutions and discounts. Shopify, he says, offered to waive six months worth of fees totaling about $1,000, and PayPal actually showed up at the physical store, and offered to set up a shopping cart on the website and a PayPal Here-enabled POS terminal in the brick-and-mortar.

    “Although I really appreciate the offer of help from Shopify, my immediate plans are to move forward with PayPal,” he tells WebProNews. “They’re going to help install a shopping cart onto our web site which will allow us to process online orders via PayPal, as well as set up a PayPal Here POS terminal for in-store purchases. They’ve showed a tremendous amount of initiative, visiting the store, asking a lot of questions about our business to see how they can help us move forward. I’m also very comfortable with their system for handling chargebacks, which goes further to protect the seller than the other services I’ve looked into.”

    “At this time, I have no plans to continue using Square in any capacity,” he added. “Although they have taken considerable steps to resolve the issue, they still don’t have a robust system in place that would make me feel comfortable with using the service to process online transactions.”

    He does tell us after having a conference call with a couple of people from Square that they did seem “genuinely interested” in feedack as to how they can improve the merchant experience.

    “I hope that my situation will help nudge them toward setting policies in place that will prevent other merchants from suffering a similar fate in the future,” he tells us.

    As for the resolution, he adds, “I’m sure that PR had a lot to do with it, but there are any number of ways they could have chosen to proceed, including doing nothing at all. Even if their motive may have been primarily to respond to a wave of negative PR, they deserve credit for choosing to act quickly and in a way that was meaningful and helpful to my business.”

    Shvartsman wrote in his second blog post, “There are lots of fascinating ethics problems here. As a self-interested individual, I’m obviously thrilled to have my money back. But is this resolution fair? Should I have expected far less, given how often merchants lose chargeback cases, out there in the real world? Should I have expected more, given the additional loss of business and the fact that our account is still cancelled, not because we did something wrong but due to the cold equations of risk management? And if Square covered the loss, is this fair to them? Or have I leveraged the power of social media to extort a favorable resolution?”

    Interesting questions to which direct answers aren’t likely to come. Either way, the ultimate resolution was probably the right PR move for Square, which is just celebrating five years of operation. Also, they just launched a feature that lets you request money from people by email.

    Image via Google

  • Already Handling Millions Of Dollars Per Week, Square Cash Now Lets You Request Money By Email

    Square launched Square Cash last fall as a simple way to send money to people via email. All you have to do is send the recipient an email with the amount in the subject line and Cc: [email protected].

    As mentioned at the time, Google had previously launched its own way of sending money by email with Gmail and Google Wallet, but it was only for Gmail, only for the desktop and there was a transaction fee, seemingly giving Square’s offering a leg up.

    Square made another move today that could put it further ahead of Google still. A new feature lets anyone request money from individuals or groups.

    “The new feature makes it easier than ever to request money – whether you’re a coach collecting dues for little league uniforms or planning a group birthday dinner for a friend, Square Cash is fast and free,” the company says.

    “The new request feature makes it effortless to collect money – staving off those awkward conversations with friends and colleagues about the money they owe you,” Square adds. “With Square Cash, anyone can now request money for everything from concert tickets and vacation rentals to class field trips and college textbooks.”

    All you have to do is do the same thing you would to send money, but instead of [email protected], Cc: [email protected]. It even works when replying-all to a group thread.

    They’ve also added a feature to the Square Cash app (Android, iOS) that lets you check in on the status of a requested payment to see who has paid and who still owes.

    Square says people have been using Square Cash to send “millions of dollars” each week.

    Image via Square