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Yahoo's 60-day e-commerce jump

Yahoo COO Jeff Mallett speaks with NEWS.COM on the Viaweb buy and keeping a 60-day jump on rivals.

At Yahoo, 60 days is all they ask.

That's the biggest lead possible in Internet time, says Yahoo chief operations officer Jeff Mallett, and he thinks Yahoo got it Monday by paying $49 million in stock for Viaweb. The Internet commerce firm rents its server-based software and Web storefronts to merchants.

But Yahoo archrival Excite isn't standing still, either. Today, the competitor announced it is adding online auctions.

In an interview with CNET NEWS.COM this week, Mallett provided a rare insider's snapshot of the frenzied world of Internet company development.

NEWS.COM: Why buy an e-commerce company?
Mallett: We've been watching submissions [for Yahoo listings] and

Jeff Mallett
Jeff Mallett
realized a lot of businesses want to be included, but lots of their Web sites are brochures. Merchants are intimidated and not sure how to do secure transactions. We saw the demand to offer these merchants a way to [sell online].

The Viaweb stuff is pretty darn good. We will be the only place for a while where you can combine secure transactions, get up and going easily on the Web, and drive credit card-carrying adults to your door.

If we get a 60-day jump on everybody, that's a luxury. We think we got it.

Why Viaweb?
Yahoo is very much on the server side, and these guys have kept a lean and mean operation, very Webcentric from a user and merchant standpoint. They never got caught up in the IPO race.

Second, we can scale Viaweb. It has 1,100 stores up and running, and it actually works. In the next 60 to 90 days, we're going to be sure Viaweb is integrated into Yahoo so we can be locked and loaded come this fall in the shopping season.

How will you integrate Viaweb with Yahoo?
We will immediately put it under the Yahoo look and feel, but it's pretty simple--build your store and get included in the Yahoo store listing. It will evolve to include promotional packages where merchants also get promoted throughout the Yahoo network, same as the big merchants.

In the fall, we will offer merchants a small-business resource service that will bring together content and news feeds, and package it so a motorcycle shop can put up the Motorcycle Daily, [for example,] and link to other motorcycle sites. We plan to move forward with small-business-branded email, chat, message boards, instant mail, and so on.

The most important thing, from our point of view: We are forming a small-business community, not to the level of the Better Business Bureau, but where small businesses can come to look for solutions. In Yahoo fashion, we expect to open it to everybody, but some things will be unique to people who set up shop with us.

Will you change Viaweb's pricing?
We think the pricing is right [at a flat monthly rates with no set-up fee or percentage of transactions, starting at $100 per month, ranging up to $300 for 1,000 products]. For the next couple of quarters, our eyes are on the ball of securing market share by making a lot of small to midsize businesses happy, online, and secure, and having people buying off the site.

What kind of reactions do you expect from other competitors?
AOL, with its Navisoft acquisition, has had small businesses hosted and a template service [for several years], but it hasn't taken off. Microsoft hasn't done anything on the server side. AltaVista, Snap, Infoseek, Lycos--we are anticipating that either through renting or acquisition they will feel market pressure, not from us, to offer these kinds of services.

What about Netscape trying to become a "business portal?"
There is no doubt that business users, during the day, have different needs, but they still want to check out sports scores. Netscape hopes to cater to that group.

We are a global media company that serves all audiences. Users can very efficiently log on and find what they're looking for. The "My Yahoo" crowd is [made up of] pretty heavy business users. We think people can have an affinity with one global brand to provide business and personal entertainment. The AOLs and Excites and Microsofts believe it, too.

So what's next for Yahoo on the e-commerce front?
We're not going to tip our hand.