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Why eBay Bought Milo.com

eBayDog

Local. Need I say more? Mobile began to ramp in 2010 and will build speed in 2011, but expect local to fuel the deals and become a lucrative piece of the pie.

It has been more than a year since I analyzed why Google would buy a niche search engine that allows consumers to determine if items searched for online are in stock at local physical stores. As it turns out, shortly after the piece published in November 2009, Google announced integrating a similar technology.

While Google didn't scoop up the niche search site, Milo.com, co-founded by twenty-something Jack Abraham (son of Magid Abraham, comScore co-founder), eBay did step-up to shell out the funds. The deal announced Thursday helps merchants selling goods through the auction site reach more consumers browsing for bargains in nearby stores, especially on mobile phones.

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So, why would eBay want Milo.com? Technology supporting the site tracks real-time availability and prices of more than two million products available from nearly 50,000 retail stores across the country., And eBay claims to have handled more than 2 billion U.S. product searches in the third quarter of the year, according to comScore. The combination will help brick-and-mortar stores sell locally.

While eBay spent an undisclosed sum on Milo.com, reports put Amazon's minority stake investment in local deals site LivingSocial at about $175 million. Jeremy Liew, a venture capitalist at Lightspeed Venture Partners and a LivingSocial board member, expects to see ecommerce sites increase innovation in 2011. "We're seeing essential growth, though not at the same scale as Groupon," he says. "These sites take a very different spin into ecommerce."

For Google, the focus on local search plucked Marissa Mayer from the search team and into location and local efforts in October. It's not clear if Mayer is behind the $5 billion to $6 billion alleged bid for Groupon, but the location-based services and targeted local ads will not only move the spotlight on to co-op coupon buying services, but also companies like Localeze and Local.com that help consumers search for deals.

Location-based mobile media company JiWire in November acquired NearbyNow, a local search company and creator of mobile shopping applications as a basis to develop a new set of location-based advertising opportunities for major brands and developers.

NearbyNow's concierge service confirms product availability at local stores and then places them on-hold for later pick-up. For example, a Seventeen Magazine mobile app user sees an ad for her favorite boots online and instantly checks local inventory. If they are in-stock, the shopper reserves the boots and they are ready at the counter when she arrives. (Nice!)

This platform tracks both online and in-store sales. JiWire claims ad click-though rates of more than 20% and conversion-to-purchase average rates of 5.8%.

1 comment about "Why eBay Bought Milo.com".
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  1. Marcelo Di Franco from Branding, Marketing and Advertising Consultant, December 9, 2010 at 7:23 p.m.

    It seems the old 90's motto "Think Global, Act Local" is being redefined... at least in the digital space. If consumers' start to act Local, they will definitely start thinking Local, too. Is Globalized technology really bringing us back to Local Thinking?

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