Tuesday, October 14, 2008

Internet Traffic and Ecommerce Update

I enjoy getting updates from industry analysts because they have access to data I don't have, or more accurately don't want to pay for. So here is the Merrill Lynch take on Internet/ecommerce trends in Sept, from Justin Post.

Traffic stable, no notable slowdown in Internet usage
comScore MM data indicated that US users were up 4% y/y in Sept., unchanged from in August. Google remained the most visited web property with 144mn unique users, up 11% y/y, and gained user share relative to Yahoo! (up 5%) and Microsoft (up 3%). In eCommerce Amazon's user growth slowed to a market rate of 4% while eBay declined 11% ... We continue to see AMZN (low prices), GOOG (information need) and PCLN (value buyers) as well positioned brands in this macro environment. 
Google users +11% y/y, Web Search PVs re-accelerate 
Google had a solid month, with 144mn visitors in September, up 11% y/y. Web Search page view growth re-accelerated m/m to up 24% y/y from up 13% y/y in Aug. Google continues to take user share in several verticals including Finance, Mail, and Maps, while YouTube users were up a solid 59%. We remain positive on Google as a share gainer in a high-growth media category, but note that the stock faces 4Q and 2009 estimate risk given abnormal economic conditions. We like Google risk/reward with the stock in the mid-$300s.
eCommerce user growth stable, AMZN slightly gains share
Online Retail user traffic growth was stable m/m in September at up 3% y/y. Amazon's users were up 4% y/y, down from +7% in Aug. but slightly better than industry, and eBay's users were down 11% y/y. comScore's data shows some pockets of slowdown (multi-channel retailers), but not a broad slowdown and the data supports our view that pure-play eCommerce companies should remain more resilient to an economic downturn than traditional retailers
In light of the economy in general, ecommerce and Internet traffic are holding up rather well. I certainly wouldn't predict a boffo 4th quarter but it may not be as bad as many thing. Low expectations may be helpful.

Just my 15%

9 comments:

Henry said...

eBay down only 11%. I would have expected more given that nearly all sellers have left them by now. Is that global or just USA? And does it include all of eBay (stubhub, sdc) or just eBay.com

Randy Smythe said...

Henry, I believe all of the numbers are for the US only and the eBay numbers are for eBay.com

Tony P. said...

Multiple IDs are a standard within ebay, not so much (I'd imagine) on the Amazon platform.

Randy, would a seller have a need for a "buyer ID" on Amazon? Or for a buyer to have multiple IDs?

We've said it so many times before - when a seller leaves ebay, so does a buyer.

Of all the sellers that I know, all but a few have multiple selling and buying IDs. Even if any particular one hasn't "left ebay", they've certainly curtailed usage of all of their IDs.

rksmythe said...

Tony,

That is why I feel eBay will never verify users or consolidate accounts, their active users number would drop precipitously.

Amazon's user numbers are actually representative. They only allow one seller account, per actual business entity.

I do have a personal and a business account.

Tony P. said...

Randy,

Thanks for the info. I've wondered about that (Amazon IDs) for a while.

Naturally, I have a buying account with Amazon and can't see a need for another one. They may actually become suspicious if one were to attempt to register a second buying ID. ;)

... their active users number would drop precipitously.

I think that is what we are seeing and will continue to see as it escalates.

Moonlight said...

Randy,

I wonder if the 'traffic' to eBay.com includes the forums, discussion boards, blogs, groups, neighborhoods, etc. They're all eBay.com......

There are an awful lot of users still visiting these areas, even though they're no longer buying or selling on eBay.

Speaking of which, I heard that when eBay's contract with liveworld is up, there goes the 'community'.

Randy Smythe said...

Moonlight,

I would think that the traffic would certainly include all of those.

Haven't heard that about Live World but it seems in line with their direction.

Aroxo Matt said...

eBay is down, while Amazon is up. Same market forces, so it can't be the impact of the economy which is depressing eBay.

In general for online retail, whilst the overall retail market is dropping, online's share of expenditure is rising which is currently helping shield online retailers from the economy.

On top of this, the recession will shift some buyers online from offline for the first time and people try and maintain spending but achieve more bang for their buck.

It's not all great, but we're shielded for a while.

Randy Smythe said...

Arroxo Matt,

I think you hit it right on the head.

The growth may be slower but it is still growth, just shifting of share .

US Internet users were still up 4% Y/Y so that's a lot of knew potential ecommerce customers.