Kurt Shintaku's Blog

Holy crap.  We bought Jellyfish!  The home of Smackshopping!
http://www.pcworld.com/businesscenter/article/137933/microsoft_buys_jellyfishcom_shopping_site.html

If you haven’t checked out Jellyfish, you really need to.  This is going to be huge… and people that haven’t tried Jellyfish in the past are going to be going Jellyfish crazy over the next few months.

<rewinding for those that don’t know what Jellyfish & Smackshopping is>
For those of you who’ve never checked out Jellyfish, it’s the world’s most famous Internet-based reverse auction.  It’s got a very loyal and strong following – people actually have "parties" known as "smackparties" around Jellyfish auctions.  Here’s the basic principle behind "reverse auctions":

1. A product of UNKNOWN QUANTITY is put up for auction on http://jellyfish.com at a predetermined auction time.
2. An auction is initiated at a STARTING RETAIL PRICE which bidders online bid on in real time.
3. The price BEGINS TO DROP IN REAL TIME at roughly 1% every 20 seconds or so.
4. People may buy the product at the currently discounted rate at anytime by "buzzing in" using the web interface.
5. Once the entire quantity of the product has been sold, the auction is ended.

(By they way, the process is called "smackshopping" and the events are called "smackdowns".  A "smack" is the term used for a group of jellyfish.  A "flock" of geese.  A "school" of fish.  A "smack" of jellyfish.  Got it?)

I believe that this is one of the processes that are patent-pending.  When demand is low for a product, I’ve seen products get discounted as low as 80% off! 

HOW DOES JELLYFISH MAKE MONEY
And how does Jellyfish make money?  Jellyfish is more than just smackshopping.  In fact, smackshopping may be the thing that I’m hyped about but it’s revenue model is the reason Microsoft bought them.

• SEARCH ENGINE FOR BUYING
  Jellyfish is essentially a search engine for people that want to buy things at a discount.  It takes care of the risk associated with buying from merchants, but it does something interesting when you buy:  It shares the revenue it gets from the sale with you.

  When you buy things on Jellyfish, you basically get a share of the revenue generated from your buying activity.  This doesn’t just include commissions from purchases – it also includes advertising revenue.  The Jellyfish promise is:
  
  "We share at least half of every $1 we earn when you shop and buy products using Jellyfish.com*.
  

• EBAY IN REVERSE
  The term they use is "eBay in reverse".  At eBay, you the consumer bid to purchase products sold by merchants online.  At Jellyfish, merchants bid on the purchases of consumers of certain specific products as they are searched for in the Jellyfish search engine. 

  Merchants essentially pay for search engine placement and the more they pay, the higher up in the search engine ranking they get, but more importantly, the more money the consumer gets back!  That’s right:  Consumers get 50% of any money that merchants pay for higher search engine placement making these purchases cheaper for buyers. 

  Let me repeat that:  Buyers get better discounts when advertisers pay more to be listed higher in the Jellyfish search engine.  See http://www.jellyfish.com/howWeLowerPrices for a description of how this process works.

• NO ADVERTISING!
  The side effect of all of this is NO ANNOYING ADVERTISING.  There’s no point:  People buy what they want to buy and only see discounts for things they’re interested in buying.

This is yet another process that’s being patented.