- Amazon Woos EBay’s Once-Loyal Merchants With Sales Growth: EBay Inc.’s once-loyal merchants are moving more of their business to Amazon.com Inc., saying they get more for their money by selling merchandise via the Web retailer. Amazon’s pool of merchants climbed to more than 2 million in 2014, while the number of sellers on EBay has remained flat at about 25 million in the past two years. Businesses that at first set up online storefronts on EBay say they’re surprised how quickly sales surge on Amazon once products appear on both sites. Moving storefronts doesn’t come cheap. Amazon charges a premium for its logistics services, which include storage, packaging and ensuring products are shipped in a timely manner. Both companies have complex price formulas that vary by product category. While EBay typically charges about 10 percent of each item’s final sale price, Amazon takes 15 percent in most cases, with additional fees for optional storage and packaging. Many sellers say Amazon is worth the extra expense to achieve greater sales volumes and that it’s cheaper to let Amazon handle logistics than do it themselves. The number of units sold on Amazon’s marketplace doubled in 2014. Amazon -- which also sells goods from its own inventory of products, not just from third-party retailers, such as EBay’s marketplace -- attracted 174.9 million unique visitors in the U.S. in February, 46 percent more than EBay, according to ComScore Inc. EBay remains the leading marketplace, measured by the number of of sellers, which has remained steady at 25 million for the past two years, according to Ryan Moore, a spokesman for EBay. He declined to comment on any sales shift, referring instead to Donahoe’s previous statements on revenue growth. Amazon, based in Seattle, had more than 2 million merchants at the end of last year, up from more than 1 million at the end of 2013. Still, Amazon’s logistical support services and larger customer base make it attractive to sellers with high sales volumes of quick-moving inventory, while EBay remains more favorable to small sellers of collectibles and specialty items. Amazon, which has 270 million active buyers compared with EBay’s 155 million, has had a third-party marketplace since 2000 and started offering Fulfillment by Amazon in 2007. Some sellers have been wary of Amazon, since it can also be a retail competitor. The shift highlights the value of Amazon’s paid membership model and its investments in distribution. Amazon boasts tens of millions of customers who pay $99 a year for fast delivery, as well as offering online music and movies. Merchants are willing to pay Amazon more to access those shoppers and have Amazon handle and deliver their products. “You can draw a pretty straight line to the success and popularity of Amazon Prime,” said Gil Luria, an analyst at Wedbush Securities Inc. “People who used to shop all over the place are now doing most of their shopping on Amazon.” Three out of four merchants using the Fulfillment by Amazon warehousing, packaging and shipping service reported annual sales growth of 20 percent, according to a recent survey by Amazon. More than 40 percent of all products sold on Amazon comes from third-party merchants who pay Amazon a cut of each sale, said Tom Taylor, Amazon’s vice president of seller services. Those sellers are increasingly paying Amazon extra to handle storage and shipping, he said.
- OYO Rooms, A Network of Branded Budget Hotels in India, Raises $25M: In the largest funding round to date for a Thiel Fellow project, Ritesh Agarwal has raised $25 million from Lightspeed, Sequoia and others to build a branded budget hotel network across India. Called OYO Rooms, the company partners with property owners across India and makes sure that their facilities meet a baseline of requirements from linen quality to breakfast to Internet access for a starting price of 999 rupees or $16 a night. The company, which has booked around 60,000 stays so far since starting almost two years ago, works with each partner hotel to improve their facilities over the span of a week before launching on the platform. While other tech companies like Airbnb also have a growing footprint across the country, Agarwal says that the Indian short-term rental market needs to guarantee a basic quality level that a ratings or reviews system meets only some of the time. While the U.S. and other European countries have long had chains like Best Western or Ibis, he argues that the Indian budget hotel market is still lacking in this area. He compares Airbnb to a Sidecar-like model while OYO has a more Uber-like approach where they focus on instant gratification and minimum quality standards. On the OYO platform, guests can do on-demand booking without waiting for a reply from a host, and they can check in and out instantaneously instead of waiting at a reservation desk. They’ve partnered with more than 200 hotels across 10 cities in India. By the end of the year, they plan to quintuple in size with a network of 1,000 hotels in 25 cities. Along with Lightspeed and Sequoia, Greenoaks Capital and DSG Consumer Partners also participated in the round.
- The Hackathon Fast Track, From Campus to Silicon Valley: Hackathons have become commonplace among professional developers, especially in booming tech centers like San Francisco and New York, and have emerged as prime places for networking, job recruiting, entrepreneurial pitching and, in many cases, winning cash. (One sponsored by the tech company Salesforce famously offered a $1 million prize to the most innovative project.) Now weekend hackathons organized by and for students are surging in size, scale and frequency. “A few years ago, hackathons weren’t really that popular — it was sort of a subculture,” says Kathryn Siegel, a junior at the Massachusetts Institute of Technology. “There’s been an enormous explosion.” The longest-running collegiate hackathon, founded at the University of Pennsylvania in 2009, has since ballooned to accommodate 1,200 students each semester. Demand, though, is far outpacing growth. At TreeHacks, 2,500 applied for 500 spots. (Capacity was later expanded to 672, which required setting up a heated outdoor tent.) More than 250 participants traveled to Palo Alto, Calif., from some 60 universities, including five Ivy League schools, top-tier engineering programs like Carnegie Mellon, M.I.T. and Georgia Tech, and universities as far away as the United Kingdom and Taiwan. Hackathon-goers maintain that what motivates them is not the awards. Mr. Hashme, who directs the University of Maryland’s Bitcamp, has participated in more than 40 hackathons since 2013. He says he attends because they force him to learn new tech skills. “Sitting in your dorm alone and trying to work on something, you wind up doing things you regret later, like watching a movie or browsing the Internet,” he says. At hackathons he enjoys meeting like-minded students from across the country — “It’s a room full of doers.” Fostering an education-first ethos, collegiate hackathons encourage students to tinker with new software and hardware and challenge themselves, and students teach one another. “There’s an expert on nearly anything there,” says Dave Fontenot, a former director of MHacks. “If you ask who the best JavaScript person is, pretty soon you’re meeting a GitHub celebrity.” (GitHub, a user-generated online repository for sharing computer code, is like a Wikipedia for software.) At TreeHacks, a team of Apple engineers was on hand to mentor students at all hours of the night. Collegiate hackathons have replicated that scene on a far grander scale. Identifying talented coders who can dream big and thrive under pressure is particularly valuable to Silicon Valley. Since hackathons showcase some of the best, brightest and most motivated upstart programmers, the events have become a focal point for recruiting. Some say hackathons are as fruitful as job fairs.
- Samsung Beats Analyst Predictions Despite Falling Profits: After a tough 2014 for Samsung Electronics, the beleaguered South Korean manufacturer said it expected earnings in the first quarter of 2015 to beat analyst forecasts, in an early sign of a possible turnaround for the company. In a news release, Samsung said its operating profit was likely to have fallen about 30 percent in the first three months of the year compared with the same period in 2014. Despite the drop, Samsung exceeded analyst expectations by posting an operating profit of about 5.9 trillion won, or $5.4 billion, in the quarter, down from 8.5 trillion won a year earlier. Sales totaled about 47 trillion won, down roughly 12 percent from 53.7 trillion won a year earlier. The figures are preliminary; Samsung will post final earnings later this month. Samsung’s forecast signals the sixth consecutive quarter of decline in operating profit, and highlights how competitive pressure from Chinese rivals at the low end of the market and Apple’s iPhone at the high end has been squeezing Samsung.
