REAL WORLD CASE 2

ENTELLIUM, DIGG, PEERFLIX, ZAPPOS, AND JIGSAW:

SUCCESS FOR SECOND MOVERS IN E-COMMERCE

Summary:

The case speaks about second movers and front-runners in a competing market. The
second mover watches the first mover’s every move, gauging when and where to make a
bid for gold. There are no safe leads. The second mover advantage seems more
substantial for companies that use the Internet as the home base for their businesses.

The case highlights to battle established leaders where one would need the right product
and strategy, and a big dose of savvy. Also highlighted are five strategies to “show up
after the starting gun and still come out on top”.

The first strategy is to ‘be better, faster, cheaper and easier’ than the competition
(Entellium vs. Salesforce.com). The second strategy is to ‘trip up the incumbents with
tactics from other fields’ (Digg vs. Slashdot). The third strategy is to ‘swipe the business
models of market leaders and start your own race’ (Peerflix vs. Netflix). The fourth
strategy is to ‘follow the biggest leader you can find’ (Zappos vs. online shoe sellers and
brick-and-mortar shoe stores); and finally, ‘aim for the leader’s Achilles’ heel’ (Jigsaw
vs. Hoovers).

If all these strategies are achieved, it would be easy for a second mover to become the
market leader.

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Case Study Questions:

1) Is the second-mover advantage always a good business strategy? Defend your answer
with examples of the companies in this case.
The case makes reference to Olympic speed skating, where they state that skater two
gets to conserve precious energy by drafting behind skater one. The number two
runner watches the front runner’s every move to know when to push forward to make
a bid for gold. In simple, the second-mover advantage is where a business looks at
another and develops a way(s) or strategy to improve and gain a better competitive
advantage; hence, pushing beyond their products and services.

In reality, the second mover advantage may not always be a good business strategy.
Companies should always be looking for ways to stay ahead as new competitors enter
the market. However, pertaining to this case and these examples, this business
strategy has its advantages and thus, it works. The second movers offered solutions to
the front runners’ shortcomings.

The problem with Salesforce.com is that its user interface is not so user- friendly.
Slashdot’s website only allows users to read and blog about technology news.
Consumers rent DVD’s from Netflix by mail. Online shoe sellers cater to small
niches and lack variety. Dun and Bradstreet subsidiary, Hoover’s lack sufficient
contact information that salespeople need to close deals.

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2) What can a front runner business do to foil the assaults of second movers? Defend
your answer using examples of the front runner companies in the case.
Front-runner businesses can:
 Observe the second-movers and improve on their tactics. Front-runners can offer
attractive and innovative products and services at competitive prices.
 Continue establishing mutual trust and secure access between the parties in an e-
commerce transaction by authenticating users, authorizing access and enforcing
security features.
 Build a reputation for high quality, guaranteed satisfaction, and top customer
support while shopping and after the sale. This would challenge the second-
movers and make it a little more difficult to compete against the front-runners.
 Increase their ownership and control through acquisition. This is where one
organization purchases another so that the buyer assumes control.
 Increase the amount of investment needed to enter into the market, thereby
deterring attempts made by the second-movers to reach in ‘first place’ or
discouraging them from competing at all.
 Form contracts with key suppliers and manufacturers.
 Keep all of their business plans and strategies confidential. This could be done by
having all employees sign confidentiality and non-competition agreements.
 Own the ideas of its employees, once it is done on the company’s time using the
company’s resources, by asking them to sign agreements passing rights over to
the employer.

Netflix could also start trading DVD’s online for a low flat rate. Regular Netflix
consumers know the brand and may be loyal to them online as well (name recognition
and brand loyalty). This could take away from Peerflix’s market share. Hoover’s
could provide contact lists in addition to its extensive research on companies, so users
would get two sources of information for the price of one.

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3) Do second movers always have the advantage in Web-based business success?
Why or why not? Evaluate the five strategies given in the case and the companies that
used them to help defend your answer.
Pertaining to the examples in this case, second movers have been competing
successfully.

Number 1: Be better, faster, cheaper, easier

Entellium offers something different from Salesforce.com by being better, faster,
cheaper (40% less) and easier (user-friendly and offering 24/7 customer service).

Number 2: Trip up incumbents with tactics from other fields

Inspired by MySpace, Digg offers a better, more marketable tech news site than
Slashdot. The Digg website actually allows users to blog about anything they want,
not just technology. Readers can even vote on any story, image, etc. they like the
most, which can make it to the front page for everyone to see/read.

Number 3: Swipe their business models and start your own race
Peerflix learnt from Netflix’s business plan- easy renting by mail and eBay-trading
items online. People can exchange DVD’s without bidding, for a 99-cent transaction
fee. They can keep the DVD’s or sell them to others unlike Netflix where one has to
return their rentals.

Number 4: Follow the biggest leader you can find

Looking at the case concerning Zappos- they were not growing at first because they
focused on the wrong competitors, the target market was minute and they did not
carry inventory. The online shoe seller was not thriving. They had to realize who they
were really competing against. Zappos’ main competitors were not other online shoe
sellers that carried a limited amount of brands and catered to small niches; but were
brick-and-mortar shoe stores. So, they built relationships with suppliers to improve
customer service; and deliver exactly what the customer wants and on-time.

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Number 5: Aim for the leader’s Achilles’ heel

Jigsaw developed a new kind of contact subscription service where all the names and
addresses in their database came from their users. The users themselves ensure that
the listings are accurate and current. This proved to be advantageous for Jigsaw as the
leading online databases of corporate information, such as Dun & Bradstreet
subsidiary Hoover’s, did not offer up-to-date contact lists that salespeople needed to
close deals.

The five strategies stated in bold above, work for these companies However, there is
always new competition trying to enter the market with better unique ideas.
Therefore, both front runners and second movers should pay attention to the
environment and its customers and continually adapt to meets their needs, so that they
can come out on top.

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Real World Activities:

1) Use the Internet to research the current business status of all of the many
companies in this case. Are the second movers still successfully using their strategies,
or have the first movers foiled their attempts? Have new strong players entered the
markets of the first and second movers, or have business, economic, or societal
developments occurred to change the nature of competition in these markets?
Unfortunately, the second mover strategy did not work for Entellium because they
were engaged in fraudulent activities whereby they misrepresented their revenues;
thus, they filed for bankruptcy in December 2008. Intuit, a financial software maker,
purchased some of their assets.

The domain "digg.com" attracted at least 236 million visitors annually by 2008
according to a Compete.com survey. It was also rated as the #1 user-submitted news
site worldwide. Given the current economic climate, Digg has made the decision to
take a more conservative approach to their expansion plans and aggressively focus on
reaching profitability within the year. This means they would be taking proactive
measures to manage costs including a headcount reduction in certain areas that are
less core to the year’s objectives while continuing to hire for roles that will help build
on their leadership position and get them to profitability faster. This includes hiring a
direct sales team, in addition to other targeted hires in 2009. Tom Shin was hired
from Yahoo to be in charge of the sales team and overall advertising strategy.

As part of their aggressive path to profitability within the year, they highlighted some
of the major priorities for the company:

 New features to grow and engage community

 Building on advertising infrastructure
 Building on successful partnership with Microsoft
 Ongoing sponsorship opportunities
 Ongoing publisher and trade partnerships

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Competitors in the DVD online rental category include Netflix and Blockbuster,
which have foiled the attempts of Peerflix to be number one. As a matter of fact,
Peerflix is no longer a participant in online DVD trading. Recent articles from
techcrunch.com have announced the acquisition of Peerflix by LiveUniverse in
September 2008. LiveUniverse, founded in late 2005 by Myspace founder Brad
Greenspan, owns a number of social network and video properties.

Zappos has had better luck than Entellium and Peerflix. Zappos is currently the
leading online shoe store. They also sell clothes, handbags, eyewear and accessories.
Zappos followed the biggest leader and now they are in front and winning the race.
What makes Zappos so successful is its company’s culture and its superior customer
service. Thus, there is a lot of customer retention and word-of-mouth advertising for
the company.

Jigsaw seems to be doing well. The case states that its database surged from 200,000
to 2 million contacts since 2004. Now, Jigsaw provides an online business directory
of over 11 million business contacts. Dun & Bradstreet subsidiary Hoover’s offered
extensive research on companies but little on contacts. Their website now explores a
database of 28 million public and private companies, more than 36 million people and
more than 600 industries.

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2) Assume you will start an Internet-based business similar to one of those
mentioned in this case or another one of your choice. Would you be a first, second, or
later mover in the market you select? How would you differentiate yourself from
other competitors or prospective new entrants? Break into small groups to share your
ideas and attempt to agree on the best Web-based business opportunity of the group.
The Internet-based business chosen would be an online grocery shopping store, in
particular PriceSmart Trinidad. PriceSmart already has a brick-and-mortar facility; so
we want to update their current website and integrate an online shopping experience
for its members (clicks-and-bricks strategy). In terms of the global market, we would
be second movers as this type of e-commerce already exists in the U.S.A. and Europe.
However, in Trinidad, there is no such development.

ttpricesmart.com would be differentiated from other competitors and prospective new

entrants by:
 Being more convenient to the busy or disabled customer by having an online
shopping service.
 Being very user-friendly, in terms of ease of access, shopping and buying.
 Building a reputation of high quality, guaranteed satisfaction and excellent
24/7 customer service support.
 Personalizing the customers’ shopping experience. The customer would be
welcomed by name and greeted with special offers and product recommendations.
There would also be e-mail notices.
 Offering a wide selection of attractive services and products- which would be
available in inventory for prompt delivery to the customer.
 Allowing customers to use their PriceSmart card # and passwords to sign in.
 Incorporating a PriceSmart debit and credit card for use of payment of goods.
A wireless linx machine would also be used when the delivery arrives, if the
customer has neither of the above.
 Enforcing security features to protect customers’ personal information.
 Efficiently delivering orders exactly as the customer requested, in the time
frame promised, with extra time to shipments to Tobago.

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 REAL WORLD CASE 3

YAHOO AND FLICKR:

WILL SOCIAL MEDIA AND SOCIAL NETWORKING
GIVE YAHOO A COMPETITIVE EDGE ON THE WEB?

Summary:

The case begins with Flickr, which is the rapidly growing photo-sharing site acquired by
Yahoo in March 2005. Yang, the co-founder and chief at Yahoo felt the need to acquire
Flickr as he stated “I look at Flickr with envy and it feels like where the Web is going”
and if this is where the Web is going, Yang wants to ensure that Yahoo gets there first.
What Yang envies is the “community of 1.5 million rabidly loyal users Flickr has
cultivated and the vast amount of content they’ve created.”

Yahoo has already seen the benefits of acquiring Flickr, as the purchase helped ignite a
larger strategy and it is a key weapon in its war against Google in providing customers
with “social-networking.”

Yahoo has 191 million registered users and they hope to form deep, lasting, Flickr-like
social-networking bonds with those registered customers. Yahoo also hopes to increase
their revenues from the user fees customers pay for Flickr’s services.

In order for Yahoo to gain the lead in the social-networking circuit they have sought to
“hire champions of the social media.” The entrepreneurs hired by Yahoo are sprinkling
their social media DNA all over the company.” Their main goal is to “turn Web searching
into a social event – the idea being that you can find what you’re looking for faster if you
first see pages saved and tagged by people that you know and trust” and, if “done well, it
could play as the triumph of the humans over Google’s cold, mechanical approach” with
their site YouTube.

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Case Study Questions:

1) How does the Web foster the growth of social media and social networking Web
sites? What potential benefits could such Web sites offer a business? Visit several
sites like Flickr, MySpace, Facebook, and YouTube to support your answer.
The Web fosters the growth of social media and social networking Web sites by
connecting people all over the world. As people are able to communicate freely, the
Web breaks down communication barriers that people or businesses encountered 10-
20 years ago. Due to this, people are now able to work, chat, buy and sell items off of
the Web (Internet).

Users can conduct keyword searches on the Web to find anything of interest to them,
including information about businesses. The Web is easy to use and people have the
opportunity to add personal, creative content. Flickr allows users to describe their
photos with ‘tags’ and they can share it publicly. Thus, these ‘tagged’ images create a
“gold mine of image search.” With Facebook, a user can search for people by interest
type. They can get to know others through their profiles and relationships with other
users all before contacting and meeting them directly.

Potential benefits Web sites could offer businesses are:

 A place to advertise on their website.
 Extra pop up ads.
 An icon that when selected could link to the company business.
 The ease of finding information on a company as opposed to going into the
business, for example for products, mission, etc. A customer can select which
company to do business with by the amount of information they provide to the
customer, making it faster for customers to make decisions as all the information
is readily available to them. Thus, they are more empowered
 Increased clientele as more and more people have easy access to the Web, for
example through the use of mobile devices.
 Increased revenue, especially if the customer is satisfied and spreads a favourable
word about the business. This would also boost its reputation.

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2) What business benefits does Yahoo hope to gain from its acquisition of Flickr and
drive to “Flickrize” its business? How realistic are such planned benefits for Yahoo at
the present time, given the acquisition of MySpace by News Corp. and YouTube by
Google? Defend your position.
There are quite a few things Yang hopes to achieve for Yahoo with the acquisition of
Flickr. Firstly, Yang hopes to achieve the community of rabidly loyal users Flickr has
cultivated (Flickr has a customer base of 1.5 million users). Yahoo also hopes to
achieve the vast amount of content they’ve created for their customers to enjoy.
Yahoo hopes to be part of the “culture of participation sweeping Web.” Yahoo would
like to be the first in the industry to provide customers with a medium to “write their
own blogs, produce their own products, and post their own personal photos for all to
see.”

Yahoo hopes to provide “social-networking” (information sharing and personal

connecting experience) as a key weapon in its war against Google. Google has
acquired MySpace and users have already been sharing personal information, for
example, pictures with their friends and family. Some of the customers of Google’s
MySpace may in fact be some of Yahoo’s own customers. Yahoo hopes this service
would keep the 191 million registered users loyal to them and they would not have to
seek services from other providers.

Yahoo also hopes to increase their revenues through the generation of more ads and
more premium subscriptions. For example, Flickr Pro users pay $25 a year to take
their photo-uploading allowance from 20 megabytes to 2 gigabytes a month. Such
user fees account for 13 percent of Yahoo’s revenues. Yahoo’s profit was $1.2 billion
then and they hope to increase those figures within the coming years.

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3) Can social media and social networking serve as a strategic competitive
differentiator for Yahoo, enabling it to overtake Google in the multibillion-dollar
targeted search ads market? Why or why not?
Social media and social networking can serve as a competitive differentiator for
Yahoo, which may enable them to surpass Google’s multi-billion dollar search ad
markets.

This is due to:

 Monopolizing the market by trying to buy out the competitors, such as Facebook,
so that they could have a larger and wider social networking system (but
Facebook declined their offer).

 Acquiring social media and social networking services that would allow
Yahoo to provide their existing customers with services that they would normally
attain from other sites. Yahoo may also acquire new customers who seek to gain a
multitude of services from one provider, for example cars, music and their Geo
cites.

 Yahoo’s revenues increasing with the acquisitions of Flickr Pro; user fees paid
annually by customers account for 13% of all of Yahoo’s revenue. Profits were
already $1.2 billion for the first nine months of that year and if Yahoo continues
their monopolizing idea, their profits would increase.

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Real World Activities:
1) Visit the main Yahoo Web site and evaluate the status of Yahoo’s current
integration of social networking into its many Web-based businesses such as Yahoo
Autos, Local, Shopping, Travel, My Web, and Yahoo Search. Is such integration
easily apparent? Does it seem to improve the value of the services offered? Present
your findings to the class.
Yahoo is a very user friendly website. When you log on to the Yahoo website, you
are greeted with a variety of services that are offered by Yahoo; the customer just has
to click on the service or the product they require from Yahoo. For example, when a
customer clicks on the icon for Yahoo Autos he/she has a wide variety of options to
choose from to find the type of vehicle he/she is searching for. Yahoo Autos allows
the customer to search by categories including SUV’s, Sedans, Trucks and Mini Vans
to name a few. Customers can also narrow their search for a vehicle by the colour or
whether they want a new or used vehicle.

Yahoo also offers to its Auto customers, services ranging from vehicle financing,
insurance and maintenance offered through a dealership near the customer. Another
feature of Yahoo Autos is the Green Centre which provides customers with the top
rated cars, that are the most environmentally friendly. The Green Centre also gives
the customer the breakdown of how the gases emitted from his car affects the
environment and which is the best type of gas for his/her vehicle to consume.

When a customer logs on to Yahoo Shopping, the page greets the customer with a
range of categories to choose from including electronics, sports and outdoors, flowers
and gifts. Customers can also choose to shop from categories including brand, store
and holiday. For example, if you logged on to Yahoo Shopping within the last week,
the holiday shopping deals that were being offered were for Valentine’s Day.
Customers could have gotten items (chocolate, flowers, jewelry and cards) at
discounted prices if they purchase from Yahoo.

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Furthermore, Yahoo Shopping is partnered with Capital One (a credit card company
in the United States) where they save 10% on products just because they purchased
from the Yahoo website. On the Yahoo Shopping home page, there is a Capital One
box and when a customer clicks to visit this box, they enter the “Saving Zone.”
Customers can capitalize on the savings they are offered by this part of the Yahoo site
but only if they are holders of a Capital One credit card. There is a featured “deal of
the week” or shoppers can choose to shop for their product deals by categories such
as home furnishings, apparel, diamonds and pearls. If there are customers who want
to capitalize on these deals but are not holders of a Capital One credit card, they can
apply for one right on the Yahoo website and “as soon as they’re approved and they
get their card, they can start saving in the Zone.”

When a customer logs on to Yahoo Travel he/she is greeted by several eye-catching

photos of different destinations. For example, when we logged on to the site this
week, we were greeted with pictures of Las Vegas, Nevada and Miami, Florida and
flight information to both destinations. Yahoo Travel already knew we were logging
on to the site from Trinidad. Yahoo Travel customers can choose to visit the flights,
hotels, cars, vacations or the cruises categories.

There is a part of the site called “Explore the Travel Guides” where they feature the
top world cities, the cities that are popular to visit from Port-of-Spain and the hot
spots of the week. It also features photos, maps and user reviews from the many
travelers using the Yahoo Travel website. Yahoo Travel features “today’s deals” as
well, where the spontaneous customer can choose to act upon one of these money
saving deals edited by Sherman’s Travel.com.

In addition, there is a feature of Yahoo Travel called My Travel where customers can
create a profile for themselves and communicate with other persons who like to
travel. Customers can also create a trip planner where they can store all their travel
information concerning the trips they have taken or the ones they plan to take and the
customer can plan what type of vacation he/she wants to have according to the themes

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category provided by Yahoo Travel. These categories include beach, honeymoon, ski,
and summer to name a few.

Yahoo search is located at the top right corner of the Yahoo website. Whatever you
click on, wherever you visit on the Yahoo website, the Yahoo search is always at the
top of the screen ready for use by one of its customers. Yahoo continues to give its
registered customers the option of logging in to their account and accessing their mail
or signing in to Yahoo messenger to chat with friends no matter which part of the
Yahoo website they are on.

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2) How are News Corp. and Google capitalizing on their respective acquisitions of
MySpace and YouTube? Visit their Web sites and search the Internet for information
that will enable you evaluate how these companies are integrating social networking
into their business initiatives.
Some early statistics available on News Corp.’s MySpace, dated August 9 th, 2006
with a report by Pete Cashmore states that MySpace has reached the one hundred
million mark on the number of accounts they have registered with them. The statistics
suggest that MySpace is “currently signing up five hundred thousand new users a
week” and is the number one social networking site.

Another statistical information centre Comscore, however, had different results on

MySpace. The results are dated July 2006 and it held that MySpace remains the
number two site behind Yahoo at this time. It acknowledges however that MySpace
“looks set to reign supreme if the current trends continue”.

Latest statistics dated June 12th, 2008 in an article by Michael Arrington says that
April 2008 was the milestone: “Facebook officially caught up to MySpace in terms of
unique monthly worldwide visitors according to Comscore.” The results show that
both social networking sites are attracting 115 million people to their respective sites
each month.

The question was whether News Corp. was capitalizing on their acquisition of
MySpace and the answer is yes. MySpace is still the top social networking site as it
dominates over Facebook within the United States market. MySpace has 72 million
uniques within the U.S. market as opposed to Facebook’s 36 million monthly unique.

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YouTube, which was acquired by Google was intended to be a social networking site
just like My Space and Facebook, but most of YouTube’s customers use the site to
view videos as opposed to connecting with friends through messenger. Customers
usually view a video that one of their friends sent them or one that they themselves
have searched for. They make comments on that video and then if they so choose,
they e-mail the video to other friends to view.

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The question was whether Google was capitalizing on their acquisition of YouTube
and the answer is yes. The latest statistics available on YouTube is dated September
2008. It states that there are over eighty million videos on YouTube to be viewed with
two hundred thousand videos being uploaded every day. If one person was to view all
of those videos posted on YouTube, it would take them four hundred years.

According to Comscore, YouTube searches have surpassed that of Yahoo searches by

.1 billion searches according to a report conducted by Miguel Helft on October 16th,
2008. YouTube’s searches were 2.5 billion in August as opposed to Yahoo’s 2.4
billion searches.

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3) As in personalized online classifieds Web pages, social media and social
networking sites offer personalized Web pages that are accessible to others online.
Unfortunately, this ability may provide the potential for serious security, privacy,
fraud, and spam assaults by online criminals, hackers and spammers. Use the Internet
to research how Yahoo and others are protecting users of their social networking sites
from such assaults. Break into small groups with your classmates to discuss this issue,
your research results, and other steps that users and the companies could take to
improve the security of social networking sites.
Yahoo takes very seriously providing a safe environment for its customers to social
network. When a customer logs on to the Yahoo website, the customer can see a little
icon on the bottom of the page called “Privacy Policy” which outlines all of Yahoo’s
terms and conditions it has set for the use of its social networking site.

Yahoo provides “practical tips” developed by the federal government and technology
industry to help its customers safeguard themselves against fraud, to secure their
computers and protect their personal information. These “practical tips” are
categorized according to topic, games, tools and videos (everything a Yahoo
customer uses Yahoo for). The topics include information on spyware, online
investing, laptop security, kids’ safety and a host of others the customer just has to
click on if needed.

Yahoo states to its customers that when they register, Yahoo collects their personal
information. This personal information collected by Yahoo includes the customer’s
name, e-mail address, gender, Zip code and occupation. For financial products and
services, Yahoo may ask the customer for their Social Security number and
information about the customer’s assets. The purpose of Yahoo gaining access to this
information is to customize the advertising and content the customer sees, fulfill the
requests of the customer for products and services, contact the customer and conduct
research for themselves.

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When it comes to children under the age of 13 who try to register for a Yahoo
account, Yahoo asks the child to have their parent or guardian create a Yahoo Family
Account so as to obtain parental permission. Parents can review, edit and delete
information relating to their child’s Yahoo account using the tools offered by Yahoo.

Within Yahoo “Privacy Policy” there is a list of all the products Yahoo offers and the
privacy settings related to them. A customer just has to click on the product he/she
requires information about. Generally however, the registered Yahoo customer has
the power to set his profile for only those persons he wants to have access to it. It all
happens with just a click of a button.

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APPENDIX

Entellium

Entellium is a U.S. software company that develops on-demand Customer Relationship

Management (CRM) software for small and midsize businesses. Entellium was founded
in Kuala Lumpur, Malaysia, in May 2000 by Paul Johnston, a former Apple sales
executive. The company moved its headquarters to Seattle, WA, in 2003. Entellium
continues to maintain a research and development office in Kuala Lumpur.

Products

Entellium’s products include two CRM applications and an issue tracking system:

 Rave - A smart client CRM application built on the Windows Presentation

Foundation . In building its Rave product, Entellium used Gamer Influenced
Design (GID), a concept that incorporates video-game features into business
software. Rave includes the following GID features:
o Star rankings associated with prospects and opportunities
o Animated effects
o Contextual activity sets
o Contact database
o Custom user profiles
o User performance ranking
 eSalesForce - A web-based CRM application built on the ASP.NET Framework
 eCustomerCenter - A web-based issue tracking system

Wire Fraud Scandal

On October 7th, 2008, Paul Thomas Johnston, the former CEO of Seattle-based
Entellium Corp., and Parrish L. Jones, former chief financial officer, were arrested and
charged with wire fraud for lying to investors in U.S. District Court in Seattle.

According to the FBI, the two software executives “devised a scheme to defraud
investors in the company by representing that company revenues far exceeded the actual
figures.”

The government alleges that actual 2006 revenues were $582,789 but the pair inflated the
revenues to nearly $4 million; actual 2007 revenues were $1.4 million inflated to $6.2
million; and actual 2008 revenues were $1.7 million inflated to $5.2 million.

The false revenue numbers, according to the government, were used by the pair to attract
millions of dollars in private investment, including $19 million from Ignition Partners, of
Bellevue. Two Ignition partners told government investigators that they never would
have made such an investment had they known the actual revenue figures.

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Forty Entellium staff were laid off after the arrests.

Bankruptcy

On December 2nd, 2008, Entellium filed Chapter 11 Bankruptcy protection, paving the
way for some assets to be sold to financial software maker Intuit.

Recognition

Entellium has received the following awards and media coverage for its software:

 A bronze 2007 IDEA honor co-sponsored by BusinessWeek magazine

 A "leader" ranking from Forrester Research in the categories of both Sales Force
Automation (SFA) and Customer Service Management
 CRM Magazine's 2004, 2005 and 2006 Market Leader Award for Sales Force
Automation (SFA)

Intuit

Intuit Sales Management ES (Beta) empowers your sales team to capture, organize, and
share critical customer information. See which prospects are ready to buy and which
customers need more attention. Help your sales team with an at-a-glance view of their
daily tasks, calendar, quota and forecasts. Sales Management ES gives your team access
to customer information at the right place, at the right time.

Digg

Digg is a place for people to discover and share content from anywhere on the Web.
From the biggest online destinations to the most obscure blog, Digg surfaces the best
stuff as voted on by our users. You won’t find editors at Digg — we’re here to provide a
place where people can collectively determine the value of content and we’re changing
the way people consume information online. How do we do this? Everything on Digg —
from news to videos to images — is submitted by our community (that would be you).
Once something is submitted, other people see it and Digg what they like best. If your
submission rocks and receives enough Diggs, it is promoted to the front page for the
millions of our visitors to see.

And it doesn’t stop there. Because Digg is all about sharing and discovery, there’s a
conversation that happens around the content. We’re here to promote that conversation
and provide tools for our community to discuss the topics that they’re passionate about.
By looking at information through the lens of the collective community on Digg, you’ll
always find something interesting and unique. We’re committed to giving every piece of
content on the web an equal shot at being the next big thing.

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Peerflix

Peerflix is a peer-to-peer online trading platform for physical goods or services. In its
first application, Peerflix allows users to trade DVDs across a large, decentralized
network, where each U.S. household serves as a distribution center. Peerflix carries no
inventory and does not participate in the transaction: they simply optimize matches across
people and products. They transfer their low overhead directly to customers by charging
99 cents for each trade facilitated.

The site abandoned the flat fixed pricing scheme for a demand-based model in 2006, but
that didn’t work well either: in November 2007 it decided to launch a media network that
had nothing to do with its original DVD swapping service. Peerflix finally canned the
DVD trading business earlier this year, so Live Universe is acquiring it solely for its ad
network.

Zappos

Zappos.com is an electronic commerce company specializing in footwear and is currently

based in Henderson, Nevada, USA. The company warehouse is located in Shepherdsville,
Kentucky, along with an outlet store. In addition, Zappos has two outlets stores in Las
Vegas, Nevada and Henderson, Nevada.

Since its founding in 1999, Zappos has grown to be the biggest online shoe store. Zappos
has expanded from shoes to handbags and purses, and has launched a second line of high-
end shoes called Zappos Couture. Zappos also serves the niche shoe markets, including
narrow and wide widths, hard-to-find sizes, American-made shoes, vegan shoes, and
Zappos exclusives.

Recently, Zappos has started to sell eyewear, apparel, and watches, as well as electronic
devices and media, such as DVDs.

Sales model

Zappos uses a loyalty business model and relationship marketing. The primary sources of
the company's rapid growth have been repeat customers and numerous word of mouth
recommendations. In 2005, the chairman reported that 60% of customers were repeat
buyers.

Zappos has a stated goal to offer "best service in the industry." Their core value is to
"deliver 'wow' through service." Their service promotes such benefits as: free shipping
both ways; a 365-day return policy; and a call center that is always open

They ended their 110% price protection policy and free overnight shipping in January
2008. The company promises 4-day shipping free with all orders but often delivers next-
day anyway, so as to pleasantly surprise customers.

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Competitors

 Endless.com, a shoe and handbag store owned and operated by Amazon.com

 Piperlime, an online store owned by Gap Inc.
 Shoebuy.com, an online shoe vendor based in Boston
 Gothamcityonline.com, an online shoe store based in New York City and
specializing in NYC fashion
 Shoe-Store.net, an online shoe vendor based in Rochester, NY
 Onlineshoes.com, the first online shoe web retailer privately owned in Seattle,
WA
 Midtownshoes.com, an online shoes store based in Chicago, IL featuring Dr.
Martens footwear and shipping worldwide

Jigsaw

Jigsaw provides an online business directory of company information and more than 11
million business contacts. If your success depends on reaching out to others, Jigsaw is
essential. And that's why over 500 corporations and more than 600,000 members turn to
Jigsaw. Every contact in Jigsaw is complete with full name, title, postal address, hard-to-
find e-mail address and telephone number.

Jigsaw is a points-based system where members earn points for the contributions to the
database that they make. They then use those points to acquire data that they need. The
more data you contribute, the more points, or credits, you earn. You also get points when
you update incorrect contacts. If members add bad data, they lose points. And if you ever
buy a bad contact, you can challenge that contact and get those points back.

The Jigsaw system corrects itself. It rewards you for doing what you would do on your
own anyway. When you pick up bad contact info, you update it and your points are
returned to your account. This keeps the system timely and accurate. Everybody wins.

Mission

The Jigsaw mission is to map every business on the planet. Each Jigsaw member
contributes to the puzzle. The result is a radically new and more effective way to gather
and maintain corporate information

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BIBLIOGRAPHY

www.amazon.com
www.digg.com
www.engadet.com
www.hoovers.com
www.intuit.com
www.jigsaw.com
www.techcrunch.com
www.wikipedia.com
www.zappos.com

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