1. Understanding the Influence of Comparison Shopping Engines Internet World, 30 th April 2008

2. CONFIDENTIAL Agenda Why should you care about CSEs? How do CSE’s work? The CSE landscape CSE 1.0 CSE 2.0 Understanding the True Influence Common CSE pitfalls Key Takeaways Q+A 2

3. CONFIDENTIAL ChannelAdvisor and CSEs… 3

4. CONFIDENTIAL 4 Why Should You Care About CSEs?

5. CONFIDENTIAL 5 E-Commerce – Large and Growing 20% Year over Year Jupiter Research Data US Retail Forecast 11/07 and European Retail Forecast 8/07

6. CONFIDENTIAL 6 Online E-Commerce Channels Growing in Importance FBR Research based on publicly available Gross Merchandise Volume (GMV) Information. Also corroborated by ChannelAdvisor’s real-world data. More consumers shopping online via search, comparison shopping engines, marketplaces. Today up to 75% of sales for an internet retailer is driven by online channels.

7. CONFIDENTIAL E-commerce Everywhere Which of the following types of online tools/services, if any, do you usually use when you conduct online research before making a purchase? Source: iCrossing

8. CONFIDENTIAL Acquisition, Retention, and CLV Average cost-, value-, and profit-per-order, by marketing tactic: Source: Forrester Research, Cantor Fitzgerald Avg per order metrics Marketing TacticCostValue"Profit" E-Mail to house list£3.29£56.06£52.77 SEO£5.39£49.37£43.98 Paid Search£13.48£57.30£43.83 Affiliate Programs£8.80£46.53£37.73 Blogs/Message Boards£2.02£35.27£33.25 CSEs£15.47£45.96£30.49 Traditional portal deals£22.27£49.41£27.14 New portal Deals£6.25£20.00£13.75 Banner Ad£36.22£45.46£9.24 E-Mail to prospecting list£26.48£33.21£6.73

9. CONFIDENTIAL Other important CSE datapoints Forrester – 75% of online shoppers influenced by CSE ChannelAdvisor – some customers see CSE as large as 40% of GMV Comscore: January 08 UK: 33m unique internet users 17m visited CSEs 51% reach 9

10. CONFIDENTIAL 10 How do CSE’s Work?

11. CONFIDENTIAL Comparison Shopping Engines How it works You pay for traffic on a per-click basis (called CPC in the industry) Per-click determined by category and merchant auction Traffic driven to your e-commerce site for potential conversion 11 £X/click

12. CONFIDENTIAL How do CSEs get traffic? Direct navigation This is a relatively small amount of traffic CSEs are, in general, not sticky SEO Generally strong results in natural search results, strong Page Rank Portal/Search Partner AOL, eBay, MSN Shopping, etc. Paid Search A huge driver of traffic for these sites Often not high placement on very broad terms Effectively reselling traffic to merchants Sometimes sell it back to Google and Yahoo via AdSense / Yahoo Publisher Network Network Partner sites (super-affiliates) Shopping.com ads also appear on eBay, Dealtime, PriceGrabber powers AOL and CNET

13. CONFIDENTIAL 13 The CSE Landscape

14. CONFIDENTIAL Understanding CSE 1.0 and CSE 2.0 CSE 1.0 Vintage <2000 Product catalog driven Usually heavily electronics oriented CPC Stagnant, little to no changes since 2006 timeframe Primarily acquire traffic from paid- search CSE 2.0 Vintage >2006 Variety of models to enhance experience/business Reviews (Ciao) Social (Crowdstorm/Facebook) Traffic/fun (Jellyfish) BizModel (CPA – Jellyfish) Comprehensive Vertical orientation (Mobile-phones) Local (Abcaz) Integrated checkout (shop.com) 14

15. CONFIDENTIAL 15

16. CONFIDENTIAL Comparison Shopping Engine Share Data 16 Rank Comparison ShoppingAug-2007Sep-2007Oct-2007Nov-2007Dec-2007Jan-2008Jan Share 1 Shopping.com Sites7,1337,1468,1127,4426,8676,235 36% 2 Ciao Sites3,0733,1113,3713,7703,4353,685 22% 3 Shopzilla.com Sites3,4123,3823,6193,7703,7113,576 21% 4 ValueClick Sites1,2091,0451,9282,5323,4893,436 20% 5 Kelkoo Sites3,9033,3043,2003,5923,7512,858 17% 6 Shopping.net Ltd2,1301,9272,1152,0461,9422,197 13% 7 Nextag.com Sites1,8111,7311,9122,2622,4082,075 12% 8 MSN Shopping1,2511,1851,4911,8671,6591,349 8% 9 Shop.com Sites1,4141,1891,5911,4861,5601,333 8% 10 PriceGrabber1,2301,3151,3611,6021,5271,301 8% 11 COMPARESTOREPRICES.CO.UK1,3471,2061,1901,5211,2981,259 7% 12 Dooyoo Group1,2811,0831,1681,0971,0231,113 7% 13 Google Product Search7577786377101,1701,110 6% 14 GOCOMPARE.COM530586593622465979 6% 15 TwengaN/A 760 4% 16 DoorOne Sites177159281477546741 4% 17 Kelkoo Shopping on Yahoo!494551621729626678 4% 18 SHOP-FOCUS.COM1,3441,143970887606668 4% 19 Yahoo! Shopping645596636823786633 4% 20 MOBILE-PHONES.CO.UKN/A240439525456512 3%

17. CONFIDENTIAL Jan 07: CSE 1.0:76%, CSE 2.0:24% Jan 08: CSE 1.0:71%, CSE 2.0:29% Jul-2007Aug-2007Sep-2007Oct-2007Nov-2007Dec-2007Jan-2008Jan Share Total Internet : Total Audience180,078181,257181,858182,206182,362183,619184,239 100% Rank Comparison Shopping Engine62,65464,16664,14667,85672,31877,12771,543 38.83% 1 Yahoo! Shopping18,02717,84419,70022,66427,62530,61526,927 37.64% 2 Shopzilla.com Sites21,98321,64422,27223,56925,02326,52424,210 33.84% 3 Shopping.com Sites19,35819,69418,47520,08121,08021,61220,249 28.30% 4 ValueClick Sites13,77114,69914,96614,29512,51413,01313,835 19.34% 5 Google Product Search4,6634,3143,4761,0411,33711,93310,409 14.55% 6 Nextag.com Sites7,4157,7967,5728,0308,7919,0718,510 11.90% 7 Pronto.com2,3073,1563,1805,2205,4897,5058,406 11.75% 8 MSN Shopping7,5587,8337,2388,32010,6289,9807,932 11.09% 9 ShopLocal.com8,7319,68610,85610,56414,32311,7667,217 10.09% 10 Become.com1,9582,2812,3564,3854,2155,1105,641 7.89% 11 Shop.com Sites4,3904,1333,3294,2394,2955,5145,154 7.20% 12 PriceGrabber3,8634,6914,5904,9425,8046,0204,775 6.68% 13 AOL ShoppingN/A 4,229 5.91% 14 MySimon.com*1,5031,3731,6331,8852,0432,2722,015 2.82% 15 MonsterMarketplace.com2,1242,1391,6481,5319951,0821,240 1.73% 16 Buzzillions.com231280388428710734703 0.98% 17 Best-Price.com1,5841,3781,5711,6921,6291,198682 0.95% 18 dealnews.com Sites424467405504922912681 0.95% 19 SmartShopper.com594599668481368301484 0.68% 20 Ciao Sites674610632743750718470 0.66% CSE Share Data (US)

18. CONFIDENTIAL CSE UK Market Status The CSE 1.0 sites either were developed by large companies or have been bought Shopping.com/DealTime – eBay Shopzilla/BizRate – EW Scripps (rumored to be for sale) PriceGrabber - Experian (a subsidiary of GUS Plc) (rumored to be for sale) NexTag – Providence Equity Partners Inc. Kelkoo – Yahoo! (rumored to be for sale) CSE 2.0 activity: Pronto (IAC), Smarter (MeziMedia) – acquired by ValueClick (pricerunner) Jellyfish acquired by Microsoft Recent trend toward “social shopping” These sites currently generate a relatively small amount of traffic Potentially high conversion rate Low barrier to entry ChannelAdvisor gets constant requests for new sites, both from clients and the sites themselves Increase in niche sites over time Result: expect more to come!

19. CONFIDENTIAL 19 Understanding the True Influence

20. CONFIDENTIAL 20

21. CONFIDENTIAL 21 Common CSE Pitfalls

22. CONFIDENTIAL Datafeeds for Beginners Each CSE has a ‘feed specification’ Usually a CSV or XML file that includes required, recommended and optional information about your products Title, price, shipping info, tax info, EAN, model number, destination URL, image URL, etc.. You have to FTP the information on a daily basis (or when you want updates sent to the engine) Datafeeds are tricky because: The specs change constantly If you get it wrong you can pay dearly It’s impossible to know what’s “really” required vs. optional vs. recommended Every engine is VERY different so you can spend a lot of time managing this as it goes up linearly with the number of engines you support E.g. 7 engines is 7 times the work of 1. The datafeed is typically how you manage ROI so that causes more complexity 22

23. CONFIDENTIAL Common CSE Pitfalls Operational Complexities Feed changes Removal of non-performing products Updating of price information Updating of inventory (out of stocks/in stocks) information Site differences Surveys/reviews Lack of transparency Data: Impressions/CTR Behavior: Search versus browse Success factors: Which tactics are effective? Conversion rates Making sure your items are optimized/matched correctly Don’t underestimate the time or complexity 23

24. CONFIDENTIAL Key Takeaways Opportunities Forrester – 75% of online shoppers influenced by CSE ChannelAdvisor – some customers see CSE as large as 40% of GMV Economics still ‘work’, niche sites highly effective Next wave of innovation coming with CSE 2.0 – are you ready? Google Product Search! Did I mention that it’s FREE? 50% of UK internet audience uses a CSE each month – they are strategic to getting mindshare Challenges Increased fragmentation Brand recognition Retailers “put off” by CPC model and increasing rate-cards ROI management is complex due to most engines not sharing cost data/allowing bidding Positional/landscape awareness non-existent

25. CONFIDENTIAL 25 Thank You! james.scott@channeladvisor.com for a copy of this presentation