Yelp escapes extortion lawsuit unscathed, except for its reputation


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For years, businesses have accused Yelp of running an extortion racket. If companies refused to pay for ads, Yelp would allegedly pull down some of their positive reviews (and wreck sales) until they gave in. Well, those accusations don’t appear to hold much legal water; an appeals court has upheld a California judge’s dismissal of a 2010 class action lawsuit that claimed Yelp was committing civil extortion. Needless to say, the recommendation service is ecstatic. It cites the ruling as proof that the shops simply had an “axe to grind” and were either trying to “draw attention away” from bad reviews or else prop up review manipulation schemes.

Only that’s not really why the court ruled the way it did. As Courthouse News Service notes, the plaintiffs lost because their claims didn’t meet the requirements for an extortion case. They couldn’t demonstrate that they had a right to hold on to those good reviews, or that Yelp had no right to demand payment. In other words, it’s still possible that Yelp was pressuring stores to buy ads at the risk of losing positive buzz; it’s just that no one was entitled to that buzz in the first place. The appeals court was quick to note that this “stringent standard” prevents abuse of extortion laws against upstanding businesses. Whether or not that’s true, the ruling won’t do much to reassure people that reviews accurately reflect a location’s quality — you might want to double-check ratings the next time you’re thinking of visiting an unfamiliar restaurant.

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Source: (PDF), Yelp Official Blog

Tuesday, September 2nd, 2014 news No Comments



Gilt Groupe, Inc. CEO Susan Lyne

Susan Lyne, the CEO of AOL’s brand group, is stepping down, according to Re/code.

Lyne will now head up an AOL-owned venture fund that promotes women-fronted digital startups.

The “fully funded” and “relatively dormant” venture fund is tentatively called the Build Fund. It will invest in woman-run startups. 

AOL told Re/code that investments will primarily be made in companies related to “consumer Internet areas, including e-commerce and media.”

Lyne left Gilt Groupe in February 2013 to come to AOL. Before that, she ran Martha Stewart Living Omnimedia. And prior to that, Lyne was a network executive at ABC. She oversaw the development of series like “Lost” and “Desperate Housewives,” Re/code reports.

Lyne doesn’t intend to waste any time getting started with Build Fund. “We are going to be investing very soon,” Lyne told Re/code. “This is not something that can wait many months — we need to develop a pipeline.”

SEE ALSO: Yahoo CEO Marissa Mayer Has Sold $11.6 Million Worth Of Yahoo Shares This Year

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Source: New York Times

Saturday, August 30th, 2014 news No Comments

Here’s Why Alibaba Is Becoming A Huge Threat To Amazon And eBay


Alibaba is expected to IPO in September and a new financial report from the company reveals that the Chinese e-commerce giant continues to grow at a blistering pace. The company’s growth pattern, and its recent entrance into the U.S. market, makes Alibaba a serious threat to e-commerce giants like Amazon and eBay. 

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Alibaba is growing ~50% annually in volume terms. 

The gross merchandise volume (GMV) — or, the value of all merchandise — sold on Alibaba’s e-commerce sites reached $248 billion in 2013, 52% more than it sold in 2012. 

GMV in the second quarter of 2014 was $82 billion, which is 45% more than the same quarter last year.

bii alibaba gmv total

Alibaba sells 4X as much stuff in dollar terms as eBay does, and it’s growing much faster. 

It’s useful to compare Alibaba and eBay because they are both marketplace businesses — meaning they don’t actually own the merchandise they sell. Rather, retailers, merchants, and consumers use their sites to sell directly to consumers. 

bii alibaba ebay gmv

Alibaba owns two main e-commerce sites.

  • Tmall, an Alibaba site where retailers sell directly to consumers, grew 81% year-over-year in the second quarter.
  • Taobao, where consumers sell to other consumers, grew 33% year-over-year and still accounts for the majority of sales via Alibaba. 

bii taobao tmall gmv

Mobile commerce is driving an increasing share of Alibaba’s business. 

One in three dollars that flowed through Alibaba’s e-commerce sites came from mobile shoppers last quarter, up from 12% one year earlier.

bii alibaba mobile penetration

For context, 30% of eBay’s GMV comes from mobile. 

bii alibaba ebay mobile

More than a quarter billion people bought something through Alibaba in the second quarter.

Alibaba’s customer base is already far larger than eBay’s, and it’s growing much faster.

bii alibaba ebay active buyers

Alibaba is still very dependent on Chinese shoppers.

Less than 1 in 10 revenue dollars from Alibaba’s e-commerce sites come from customers outside China. However, with the recent launch of its U.S. site, that could soon change.  For comparison, almost 40% of Amazon’s revenues come from outside North America

bii alibaba revenue breakdown


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