Jellyfish.com
Encyclopedia
Jellyfish.com was a reverse auction
online shopping site website. The Middleton, Wisconsin
-based company was acquired by Microsoft
in 2007. On May 22, 2008, Microsoft officially announced the cash back service as part of their Live Search group of tools. The site was shut down at Midnight, February 16, 2009.
It is the first website exclusively using "cost per action"
for shopping, and the first to give ad revenues to customers, by means of rebates on purchases.
In a press release, Kegonsa Capital Partners said that it acquired 25 percent of Jellyfish.com's stock for about $600,000 in February 2006, and made 15 times its seed investment with the deal.
On October 2006, Jellyfish raised an additional 5 million dollars in funding. According to their founders, Jellyfish has 1,000 retailers advertising more than 5 million products, from shoes to electronics to home appliances. It was expected to have 20 employees by the end of October 2006, at the Old Sauk Trails business park, on the Far West Side.
Kegonsa, a Fitchburg, Wisconsin
group with 42 Wisconsin investors, led the second round of investment on October 2006, with more than $1 million in October 2006 through the Kegonsa Co-Invest fund, for a total of $5 million. The second round investors more than doubled their investment in less than a year.
In an interview in July 2007, Wiegand said Jellyfish had sold nearly $5 million worth of products, "everything from bicycles to shoes".
McGuire explained that the name Jellyfish was chosen because they wanted to be completely transparent.
When bought by Microsoft, it had 26 employees.
Here's how it works:
There are different shows for different types of items. The main show ("The Daily Smack") starts at 11:00 am central time and a number of random items are for sale during that time. Usually, each offer has multiple items, so more than one person can get a deal. There used to be shows that ran all the time, however, all the other shows were discontinued on June 30, 2008.
The website has a forum where users can discuss the current offers on real time. Depending on the show and time of day, there can be anywhere from 100 to 600 people on.
On February 9, 2009, it was announced that "SmackShopping will stop all SmackShows, chat, and other interactive services as of 12:00 am CST February 16, 2009." The site will remain available for 90 days (until May 15) to allow users to redeem any coins they may have accrued.
It's the only comparison shopping engine to share its advertising revenue directly with consumers. The site offers rebates to customers from the advertisers' payments, which are offered not at the purchase moment, but later on, when advertisers have paid their ads.
Buyers get paid 50% of the ad revenue, this percentage being calculated before the expenses of the site.
Jellyfish shares some speculation among Microsoft thinkers that the current pay-per-click-focused advertising model
may not be the optimal one, and wants to replace it with cost per action
.
Dan Marriott, CEO, Pronto.com, at the Chelsey Interactive Local Media conference in Philadelphia in 1 December 2006, identified "new styles of services competing in the online comparison shopping space" and listed Jellyfish as having a separate style that he called "consumer incented".
It plans to offer an alternative to cost-per-click (CPC) by allowing advertisers to bid directly to customers.
as part of Jellyfish.com and is integrated with Live Search in May 2008. Users now require to use Windows Live ID
to sign in to their Cashback accounts instead of the previous Jellyfish.com account. Microsoft plans on using this to catch up to Google
in the search market.
Reverse auction
A reverse auction is a type of auction in which the roles of buyers and sellers are reversed. In an ordinary auction , buyers compete to obtain a good or service, and the price typically increases over time...
online shopping site website. The Middleton, Wisconsin
Middleton, Wisconsin
Middleton is a city in Dane County, Wisconsin, United States. It is a western suburb of the state capital, Madison but it was actually founded before Madison. It got its name from Middletown, Connecticut; the "w" being dropped was due to a paper work error made by long time historian Edward Kromrey...
-based company was acquired by Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
in 2007. On May 22, 2008, Microsoft officially announced the cash back service as part of their Live Search group of tools. The site was shut down at Midnight, February 16, 2009.
It is the first website exclusively using "cost per action"
Cost Per Action
Cost Per Action or CPA is an online advertising pricing model, where the advertiser pays for each specified action linked to the advertisement....
for shopping, and the first to give ad revenues to customers, by means of rebates on purchases.
History
Jellyfish launched the first beta version of service in June 2006, after receiving an initial seed round of investment from its founders, Brian Wiegand and Mark McGuire, and Kegonsa Capital Partners.In a press release, Kegonsa Capital Partners said that it acquired 25 percent of Jellyfish.com's stock for about $600,000 in February 2006, and made 15 times its seed investment with the deal.
On October 2006, Jellyfish raised an additional 5 million dollars in funding. According to their founders, Jellyfish has 1,000 retailers advertising more than 5 million products, from shoes to electronics to home appliances. It was expected to have 20 employees by the end of October 2006, at the Old Sauk Trails business park, on the Far West Side.
Kegonsa, a Fitchburg, Wisconsin
Fitchburg, Wisconsin
Fitchburg is a city in Dane County, Wisconsin, United States. The population was 25,260 at the 2010 census. Fitchburg is a suburb of Madison and is part of the Madison Metropolitan Statistical Area.-History:...
group with 42 Wisconsin investors, led the second round of investment on October 2006, with more than $1 million in October 2006 through the Kegonsa Co-Invest fund, for a total of $5 million. The second round investors more than doubled their investment in less than a year.
In an interview in July 2007, Wiegand said Jellyfish had sold nearly $5 million worth of products, "everything from bicycles to shoes".
McGuire explained that the name Jellyfish was chosen because they wanted to be completely transparent.
Microsoft Purchase
On October 2, 2007, Microsoft announced purchase of Jellyfish. The estimated price for the buyout was said to be $50 million. The Jellyfish engine may be used as a part of Microsoft Live Search. Microsoft sees Jellyfish.com as a way to augment its e-commerce and search offerings.When bought by Microsoft, it had 26 employees.
CPA leader
Jellyfish.com was the Internet's first comparison shopping search engine to operate exclusively on a Cost Per Action (CPA) ad model.After the sale
As of 2009, the founders have sold a total of three startup companies in 10 years, the last one being the selling of Jellyfish to Microsoft. They have now raised $4.3 million funding for another online retail service, Alice.com, which launched in March 2009.How it works
The company describes their site as a reverse-auction site, "like eBay in reverse". They call it "smack shopping".Here's how it works:
Smack Shopping
The other main part of the site is smack shopping, where items are for sale and the price drops until someone buys the item:There are different shows for different types of items. The main show ("The Daily Smack") starts at 11:00 am central time and a number of random items are for sale during that time. Usually, each offer has multiple items, so more than one person can get a deal. There used to be shows that ran all the time, however, all the other shows were discontinued on June 30, 2008.
The website has a forum where users can discuss the current offers on real time. Depending on the show and time of day, there can be anywhere from 100 to 600 people on.
On February 9, 2009, it was announced that "SmackShopping will stop all SmackShows, chat, and other interactive services as of 12:00 am CST February 16, 2009." The site will remain available for 90 days (until May 15) to allow users to redeem any coins they may have accrued.
Business model
A retailer pays advertising fees to Jellyfish.com only when a shopper buys. Rather than the more traditional pay per click online marketing system, Jellyfish.com is based on a "Value Per Action" model.It's the only comparison shopping engine to share its advertising revenue directly with consumers. The site offers rebates to customers from the advertisers' payments, which are offered not at the purchase moment, but later on, when advertisers have paid their ads.
Buyers get paid 50% of the ad revenue, this percentage being calculated before the expenses of the site.
Jellyfish shares some speculation among Microsoft thinkers that the current pay-per-click-focused advertising model
CPC
- Organizations :* Confirmation Preperation Class* California Preparatory College* Canadian Parachute Centre* Canadian Paralympic Committee* Center for Plant Conservation* Children's Psychiatric Center, Monmouth County, NJ USA* Climate Prediction Center...
may not be the optimal one, and wants to replace it with cost per action
Cost Per Action
Cost Per Action or CPA is an online advertising pricing model, where the advertiser pays for each specified action linked to the advertisement....
.
Dan Marriott, CEO, Pronto.com, at the Chelsey Interactive Local Media conference in Philadelphia in 1 December 2006, identified "new styles of services competing in the online comparison shopping space" and listed Jellyfish as having a separate style that he called "consumer incented".
It plans to offer an alternative to cost-per-click (CPC) by allowing advertisers to bid directly to customers.
Patent
Jellyfish has a patent-pending form of online advertising that consists on returning part of the CPA fees back to consumers. It alleges that it creates inherent price savings for online shoppers and risk free sales for advertisers and calls it value-per-action advertising.Live Search Cashback
Live Search Cashback allow users to search for products from multiple vendors and find their prices. It offers money back for purchases made through the site. This service started in June 2006as part of Jellyfish.com and is integrated with Live Search in May 2008. Users now require to use Windows Live ID
Windows Live ID
Windows Live ID is a single sign-on web service developed and provided by Microsoft that allows users to log in to many websites using one account...
to sign in to their Cashback accounts instead of the previous Jellyfish.com account. Microsoft plans on using this to catch up to Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
in the search market.
See also
- List of companies acquired by Microsoft Corporation
- CPA (cost-per-action)Cost Per ActionCost Per Action or CPA is an online advertising pricing model, where the advertiser pays for each specified action linked to the advertisement....
- CPC (cost-per-click)Pay per clickPay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...