By Nick Patience
According to Epinions.com Inc, a web of trust is something most of us already have – although we might not realize it. It is the people we trust to offer advice when buying a product or service and we gauge their opinion based on how much we think that person really knows about the subject. It’s a fairly woolly concept, but one that Epinions.com thinks it’s got down pat, so much so that it has filed a patent to protect the algorithm at the heart of its new web-based online shopping guide service, where the reviews are written by consumers.
The reviews are not edited in any form except being fed through a profanity filter and are posted immediately. Visitors to the site then rate the review and can also group together reviewers they have come to trust. That way, reviewers that simply trash every product they come across, or conversely are suspiciously over- enthusiastic about products that most people have found to be faulty, will get fewer recommendations, and over time fewer people reading their reviews.
The overall concept is not new, admits Mike Speiser, one of the company’s co-founders. But it differs from similar ideas employed by About.com and Deja.com in that Epinions is focused on people’s buying decisions, he says. The other differentiator claims Speiser are the consumer-controlled tweaks that should separate the wheat from the chaff in terms of reliable reviews. Reviewers have an incentive to write reliable reviews because they can participate in the company’s royalty scheme, whereby they can earn a percentage of ad revenues, based on page impressions. They can also increase their visibility and even gain some notoriety. Users have an incentive to rate the reviews because it helps them build up their web of trust – a sub-community of reviewers whose opinions they trust. Incidentally, it is similar to the model employed by the Zagat restaurant survey. That started 20 years ago in New York by asking visitors to restaurants to submit their own reviews. It now gathers them together into guides to restaurants all over the world. Speiser likens it to the eBay model, where sellers are rated by buyers of products through its person-to-person auction site.
As well as ad revenue, Epinions plans to syndicate parts of its content out to other sites. It has signed letters of intent with a number of partners, but cannot name any of them right now. Speiser says they include retailers, both online and those that plan to get online in the future, that will partner on co-branded sites hosted by Epinions with the companies splitting ad revenues between them. Epinions is also talking with a number of portals about adding its services to their e-commerce offerings, hopefully in time for this year’s Christmas rush.
Nirav Tolia, one of the co-founders of Epinions was previously a marketing manager at Yahoo Inc and another, Ramanathan Guha worked extensively on Yahoo’s taxonomy during an earlier spell at the portal. That kind of knowledge comes in useful when understanding how to map onto the SKUs that represent the products and that that are central to e-commerce, says Speiser. In addition, other content and community sites offer another chance for syndicating content, says Speiser and Epinions will shortly begin a self-service affiliate program that will offer the ability for sites to license parts of the content automatically, using a wizard. The system, including the database, was built in-house, based on the resource definition format (RDF), Netscape’s extension to XML.
Epinions has no plans to either directly sell any products itself or to offer a shopping bot at present. It will instead concentrate on expanding beyond the nine vertical markets it covers at present into other verticals and services. It currently offers Epinions on cars, computers, electronic goods, media (books, movies and music) sporting goods and travel. It also plans to expand abroad pretty rapidly, and has already begun negotiations with companies in Europe and Asia about join
t ventures in those areas. Epinions already employs 43 people, has 30 vacancies and is still only just over four months old. It raised $4m each from Benchmark Capital and August Capital back in July and is in the middle of raising a second round, but Speiser could not say how much and who with. Benchmark’s Bill Gurley and August’s John Johnston are members of the Mountain View, California-based company’s board.
Other areas of possible expansion include directory listings along the lines of Yellow Pages. The company already offers ‘where to buy’ links chosen by the topic moderator, but they could easily be expanded, says Speiser. The company could also find itself going up against BizRate Inc. The start-up that enables buyers to rate the suppliers of the products. A tie-up between the two would seem to make a lot of sense, but they are not talking at the moment. á
