Interview with Michael Yang CEO of Become.com--a stealth Google in the making?
It was good to catch up with Michael Yang recently, the CEO of Become.com, a comparison shopping search site. This is a stealth Google in the making and that's good--because in this new rules world you don't want to get on someone's radar screen too early.
I first met Mr Yang and his team about a year ago. It was one of those dinner events where my plan was to pop in and stay a short time because of an already full day running around Silicon Valley. I stayed much longer.
I stayed because it is an impressive team, and one that rode through the last bubble with the MySimon comparison shopping site, later sold to Cnet. Now the core of the team is back and this time they know how to play and win, and this time potentially win big.
"We are just at the beginning stages of the online economy," Says Mr Yang. "Online commerce is a small fraction of total sales." And he's right, most analysts predict strong growth over the next five years as online commerce grabs more of the sales pie.
At the heart of Become.com is a search engine technology called AIR (Affinity Index Ranking) that uses a unique algorithm developed by Become.com co-founder Yeogirl Yun, the CTO and a former classmate of the Google boys, Larry and Serge. Become.com says its algorithm is much more difficult to spam and has lots of other superior features.
But the effectiveness of the algorithm will be proved over time--because it needs to learn from the online habits of its users. That's why large beta populations are important to these Internet 2.0 companies.
Become.com hit its target of 10 thousand beta test users within months of launching. And has now exceeded 1.2m users. It will soon announce its next round of financing and it has a strong strategic relationship with a large partner in Japan, and more such deals in the making.
More strategic partnerships are being sought, especially in Europe. And Mr Yang says that shopping is not the only vertical market that Become.com wants to target. Potential sectors are healthcare and travel. "Right now, we pretty much want to be very focused on shopping--it is a very large opportunity."
Focus is paramount in this business because there are so many applications for Internet 2.0 technologies. But I wonder if search is going to still be a fertile ground for other companies, other startups.
"The leaders always change, you remember when search engines came and went," says Mr Yang. I do remember, those names such as Excite, Infoseek, Altavista, Hotbot, Inktomi--they were the fashion of their day--each one was usurped by a better product.
Mr Yang is confident that there is still plenty of room in the search engine market for usurpers, but I have my doubts. It will be difficult for small teams to break into the search engine market because of the scale that is needed to become successful.
First of all you need a large pool of users to start getting your algorithm trained on the search--vertical or not. Then you also need the scale of the revenue network with partners and sales teams. And you are up against some savvy incumbents--of which Become.com is certainly a group member.
However, it is always best to never say never in this business. The incumbents could take their eye off the ball or find it difficult to fight off new challenges.
One of the challenges out there is click fraud. Mr Yang says that his team keeps an eye on this issue, because Become.com also advertises on Google and other networks. "Click fraud isn't a problem, it would need to get much larger."
Become.com gets revenue from ad networks and it also sells its own ads. It is currently offering a free month of advertising to new customers.
What impresses me about the company is how Mr Yang is able to execute so precisely within a sector that is heavily populated with formidable players, and up and coming competitors. This second year will be interesting to watch...