shopping.com analyzed

Filed in archive Entrepreneurship on March 26, 2004

Stefan has a great analysis of shopping.com.

"High fixed costs, low variable costs: An important consideration with the infomediation business model is the assumption that it has relatively high fixed costs, whereas variable costs are relatively low, which in the end would provide for an increasing margin along with growth. Although it's hard to know how that is turning out for Shopping.com due to the high fluctuation in the cost base after the bubble, there is one statement indicating that variable human resources costs are indeed relatively low: "199 of our 279 employees were engaged in research and development". Those costs usually do not increase in a linear fashion along with revenue growth."

You might guess Stefan is working on a new venture if you compare his October analysis of Friendster and his launch of the best consumer related social networking site in Germany I know of - Friendity in January this year. :-)