Guest Speaker: Paul Graham, Producer - Yahoo! Store
Interviewer: Diane Watlov-Collins, President, MARKETINGWEB.COM
Date: March 31, 1999

Welcome to the MARKETINGWEB.COM Forum! The purpose of this Forum is to provide online discussion concerning the methods of Internet marketing.

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Marketingweb: The E-Commerce Race - Special Reports Series: Yahoo! Store - March 31, 1999

Marketingweb: Our guest tonight is Paul Graham, producer of Yahoo! Store. Prior to joining Yahoo in 1998, Paul was president of Viaweb, Inc. which Yahoo! acquired in a stock deal reportedly valued at $49 million.

Marketingweb: The Viaweb technology purchased by Yahoo! guides merchants through an easy-to-use store building process that takes about 20 minutes.

Marketingweb: Mr. Graham is here to discuss how the Yahoo! Store e-commerce strategy and technology can be of benefit to small businesses interested in transacting online.

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**PGraham enters.

Marketingweb: Welcome, Paul! It is a pleasure to have you with us.

PGraham: Hi folks.

Marketingweb: Are you ready to get started?

PGraham: Sure, let's go.

Marketingweb: Paul, many small businesses are recognizing the power of marketing online as more of their customers and their competitors establish Internet connections and e-commerce enabled sites.

Marketingweb: Most small businesses, however, do not have web savvy technicians as members of their staff. They worry about the cost of developing and maintaining a web site as well as customer service, security and marketing issues.

Marketingweb: In an attempt to help small businesses get online, many large information technology (IT) companies are developing "packaged" solutions that address these concerns.

Marketingweb: The e-commerce solutions that are being designed for small business tend to fit into three major categories: template commerce; shrink-wrapped commerce; and custom commerce. Where would you place Yahoo! Store's solution?

PGraham: Yahoo! Store is one of the Web-based solutions, meaning that it lets anyone make a store using just a browser.

Marketingweb: There is no need to purchase any additional equipment other than your pc and internet connection?

PGraham: That's right. You can just sit down in front of a browser.

PGraham:So you can work on your site from a friend's house, for example.

PGraham:(I often do.)

Marketingweb: How does the person "create" his site?

PGraham: After you log in, you just click on a "new item" button to add products to your online store. You can also upload a database of your products. Some of the bigger merchants do that.

Marketingweb: So, you log into Yahoo Store, create your site with templates and manage the inventory through the same template process?

PGraham: That's right, though you have a lot more design flexibility than people usually associate with "templates".

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Marketingweb: Can you elaborate?

PGraham: For example, you can control things like the colors used in your site, the sizes of your thumbnail images, and the fonts used in your nav bars a la carte.

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Marketingweb: The small business using your service would design their site with your templates. Their site would reside on your server. What value added technical services does Yahoo! Store offer for the monthly $100 merchant contract fee?

PGraham: Almost everything you need in an online store. Domain name registration, search engine submission, credit card processing, online merchant account signup, affiliate programs...

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Marketingweb: That's a lot of added value. Merchant ID and credit card finance arrangements are the responsibility of the small business, correct?

PGraham: Yes, merchants have a separate contract with the credit card co.

Marketingweb: You recommend First USA - a subsidiary of Banc One Corporation for those financial arrangements?

PGraham: Yes; in fact, we've just added an easy online application form

Marketingweb: They are quite an asset!

Marketingweb: First USA also provides the Yahoo Platinum Visa Card for consumers?

PGraham: I am not sure about that; different part of Yahoo! But they are one of the biggest companies in the credit card business.

Marketingweb: Small businesses range in size from the one-person shop to 99 employees and from a few products to thousands. The Yahoo! Store solution appears to offer a package deal to the small business owner. What extent of the above mentioned small business range can Yahoo! Store handle?

PGraham: Yahoo! Store can grow with you. Quite a lot of our users are large companies, in fact, like FAO Schwarz and Crabtree and Evelyn.

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Marketingweb: The pricing structure is $100 per month for 50 itmes or less and $300 per month for sites with up to 1,000 items, correct?

PGraham: Yes, that's it. (It's a good deal.)

Marketingweb: Yes.

Marketingweb: What type of additional cost factors does the small business need to consider?

PGraham: The other main expense is a merchant account. That usually costs about $40-50/month, plus a startup fee.

Marketingweb: The templates for the beginner are easy.

Marketingweb: But what about the more advanced needs when a site wants a custom look.

Marketingweb: What if they can't handle the advance features and need a designer to handle the process?

PGraham: You can have several different types of customization. Beginners use one of our standard styles; more advanced users change individual properties of their site; and the most advanced users can create their own page templates. At that end, you have unlimited customization.

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Marketingweb: That's pretty cool! Any drawbacks?

PGraham: The one thing (probably the only thing) people can't do is write their own cgi scripts. Security requires that. But we have predefined cgi scripts for most needs.

Marketingweb: What do they include? Are they only "mail-to-form" cgi?

PGraham: There's a search script, a catalog request script, a script for ordering an item that's not in the site (but in the print catalog) --

PGraham: basically, whatever merchants have asked for.

Marketingweb: That's a great service. Cgi is a problem for a lot of small companies. How about auto-responders...for email?

PGraham: So far no one has wanted that; I think the emails a store gets are not standardized enough for autoresponders to be useful.

Marketingweb: What if they sell...reports for example. They may want automatic delivery of the report using an auto-responder.

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PGraham: We do have support for selling softgoods (reports, software, etc) but we don't distribute the stuff by email because we need to know if they got it.

Marketingweb: I see. Good point.

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PGraham: Thanks!

Marketingweb: Yahoo! Store packages many services into its small business offering bringing to play the strong Yahoo! marketing potential. Please explain how Yahoo! is leveraging its position as a portal to add value to Yahoo! Store merchant contracts.

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PGraham: Probably the most valuable thing Yahoo does is drive traffic to the merchants, through Yahoo Shopping.

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Marketingweb: How is that done?

PGraham: I think he just used an n instead of an h.

Marketingweb: Your right ... a not so near clone!

PGraham: Pretty crafty, PGranam.

Marketingweb: So, tell us how Yahoo! uses the Store to leverage clients to their merchant sites.

PGraham: All Yahoo Store merchants are also included in something called Yahoo Shopping, which is promoted throughout Yahoo. It includes a product search, a product hierarchy, and an alphabetical list of stores, arranged by type. Each is a source of traffic (and sales) for stores.

Marketingweb: Do you have statistics on the profitability of Yahoo! Store merchants? Is the program working for them?

PGraham: Overall, yes. Their contracts don't include any sort of time commitment, so if they weren't making money, they'd leave.

Marketingweb: Another good point.

PGraham: Thanks!

Marketingweb: Paul, some of our guests may wish to ask a few questions. May I open the floor to questions?

PGraham: You bet.

Marketingweb: Floor is open


Marketingweb: How can a merchant find information on becoming part of Yahoo! Store?

PGraham: http://store.yahoo.com

Marketingweb: What about designers that wish to help those who need a more complicated site rendition than the basic template.

PGraham: http://www.store.yahoo.com/vw/resprog.html

PGranam: so, do you allow sales of, er... risque items in Yahoo! Store?

PGranam: I hear they are very popular on the web so it seems like a natural sort of thing to try to sell.

PGraham: Actual porn stuff, no, but there are some lingerie shops.

Marketingweb: Yes, Paul --Viaweb designed Fredrick's site, right?

PGraham: Yes, Frederick's is a Yahoo Store user. Very sucessful too.

Marketingweb: The custom designs of the larger sites are a credit to the system versatility.

PGraham: Yes, some of the sites (like the Denver Broncos for example) are completely custom looking. If I saw them myself online, I wouldn't know they were made with Yahoo Store till I clicked on the Order button.

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Marketingweb: I agree. Paul, I want to thank you for your participation tonight! You have given us some valuable information.

PGranam: I learned a lot

PGraham: Thanks for inviting me!

Marketingweb: I learned as well. The transcript will be up tomorrow. I will email you with the specific url.

PGraham: Thanks!

PGranam:Are we done?

**PGranam exits.

Marketingweb: We are indeed. :) Thanks for attending!

PGraham: Roger, over and out.

**PGraham exits.

**Marketingweb exits.





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