Twingle

An Online Auctioning Company Case Study

1 Twingle – Case

Study

Case Written by Xavier Azcue for the TIMES (Tournament In Management and Engineering

Skills) Project.

Special thanks to: Marthe Rodrigues, Diogo Pires, João Barata, Paulo Melancia, Francisco

Guimarães, Rui Guerra, João Doroana and Luís Alves.

2 Twingle – Case

Study

Table of Contents

Company Overview and Business Model ............................................................... 4

Market Segmentation and Client Profile ................................................................ 7

Twingle Auction Process ........................................................................................ 8

Online Auctions...................................................................................................... 9

The boom in online trading ......................................................................................................... 9

Ecommerce .................................................................................................................................. 9

Future Forecasts .......................................................................................................................... 9

Advantages and Disadvantages ................................................................................................ 10

Evolutionary Growth ............................................................................................ 12

Advertising and Distribution ................................................................................ 13

Macro Environment ............................................................................................. 16

Political-Legal ............................................................................................................................ 16

Economical ................................................................................................................................ 16

Social ......................................................................................................................................... 17

Technological ............................................................................................................................. 17

Micro Environment .............................................................................................. 18

Main Direct Competitors ........................................................................................................... 18

Market / Competitors Analysis ................................................................................................. 20

Reliability and Quality Service: .............................................................................................. 21

The Future ........................................................................................................... 22

Credibility Problem .................................................................................................................... 22

Future Possibilities .................................................................................................................... 22

International Expansion ......................................................................................................... 22

3 Twingle – Case

Study

“Buy Now” Option ................................................................................................................. 23

Other Possibilities .................................................................................................................. 23

The Meeting ........................................................................................................ 24

Financial Data ...................................................................................................... 26

Balance Sheet (31/12/09) ......................................................................................................... 26

Annexes ............................................................................................................... 27

Annex 1: Data Relative to January 2010 ................................................................................... 27

Annex 2: Data Relative to December 2009 ............................................................................... 28

Annex 3: Data Relative to November 2009 ............................................................................... 29

Annex 4: Clicks Discriminated by Originating Website ............................................................. 30

Annex 5: Registries Discriminated by Originating Website ...................................................... 30

Annex 6: Sales Discriminated by Originating Website .............................................................. 30

Annex 7: Privacy Policy .............................................................................................................. 31

4 Company Overview and Business Model

Twingle – Case

Study

Company Overview and Business Model

Twingle online auctions is a Portuguese company, created in April 2009 and is situated in

São Domingos de Rana of the Cascais area. The idea behind the business came from a group of

childhood friends – Rui Guerra, João Doroana and Luís Alves – who despite not having any

major previous knowledge about the business model, desired to create an innovative project,

differentiable from the existing competition.

Being one of the most recent online auction websites, Twingle brought to Portugal a

new and innovative concept of online auctions of a wide range of products (from gift

certificates to plasma televisions). All products are of Twingle’s responsibility; they are new

products and sold with warranty guaranteed by Twingle.

The new concept introduced to Portugal arises from the fact that buyers end up paying

practically nothing for the products themselves, what they do spend money on is bids. Each bid

costs €0.20 and must be purchased before being used. Each bid adds a variable number of

seconds to the final time of the auction and €0.01 to the products final value.

The final buyer ends almost always pays less for the product than what it costs for

Twingle. So technically in the sale of the product Twingle loses money. However, all those who

attempted to buy the product and didn’t manage to usually end up losing most of the money

they spent purchasing the bids, which is where Twingle makes money.

If the user does not manage to buy an item which he bid for (which means he/she got

outbid by some other user), the bids used while attempting to buy the product will then be

converted into discount vouchers. Discount vouchers have a limited time period of 30 days to

be used and can only be used as a discount on the price of purchased items; they cannot be

used to buy new bids nor to pay for shipping expenses.

For example, a person buys 500 bids for €100 and uses them without winning any

product. Those €100 will be converted into discount vouchers worth €100. The person then

buys mores bids and wins a product less than 30 days later, with a final bidding price of €80

(store price could be over €500). That means that to buy the product the person will only pay

for the bids he/she used. €80 of the €100 discount vouchers will be used to pay for the final

5 Company Overview and Business Model

Twingle – Case

Study

price of the product, leaving the person with discount vouchers with a value €20. Nevertheless,

most times a client does not manage to use his/her discount vouchers.

Therefore Twingle’s revenues come from: product sales and bids. The product sale

minus is product cost is almost always negative. Twingle makes a profit on the bids; not so

much the bids purchased by the final buyer, but more from the bids purchased by clients who

don’t win and then end up not using the totality of their discount vouchers.

It is important to note that Twingle also has a feature called TwingleBidder, which is an

automatic bidder. It allows users to bid on products without having to do so manually. It is

extremely useful for example when one needs to go away momentarily and does not want to

lose the auction. TwingleBidder has various fields that can be configured to bid more

effectively; these configurations can be activated/deactivated at any time.

The strategic advantages of the general online auction business model (not only for

Twingle) include:

No time constraints. Bids can be placed at any time (24/7). Items are listed for a

number of days (usually between 1 and 10, at the discretion of the seller); giving

purchasers time to search, decide, and bid. This convenience increases the number

of bidders.

No geographical constraints. Sellers and bidders can participate from anywhere that

has internet access. This makes them more accessible and reduces the cost of

"attending" an auction. This increases the number of listed items (i.e.: number of

sellers) and the number of bids for each item (e.g.: number of bidders). The items do

not need to be shipped to a central location, reducing costs, and reducing the

seller's minimum acceptable price.

Intensity of social interactions. The social interactions involved in the bidding

process are very similar to gambling. The bidders wait in anticipation hoping they

will "win." Much like gambling addiction, some bidders may bid primarily to "play

the game" rather than to obtain products or services. This creates a highly loyal

customer segment for those clients who remain. This can also skew the prices of

items/services/goods in the auction.

6 Company Overview and Business Model

Twingle – Case

Study

Large number of bidders. Because of the potential for a relatively low price, the

broad scope of products and services available, the ease of access, and the social

benefits of the auction process, there are a large numbers of bidders.

Captures consumers' surplus. Auctions are a form of first degree price

discrimination. As such, they attempt to convert part of the consumers' surplus

(defined as the area above the market price line but below the firm's demand curve)

into producers' surplus.

Twingle is a growing business, but at the moment it has 7 members: 3 managing

partners, 2 programmers, 1 web designer and a person responsible for information security.

The most likely scenario is that they will hire another programmer soon.

Figure 1: Company Hierarchy

Even though Twingle is a small business the four employees have specific job functions

while the three managing partners take care of day to day operations (such as communicating

with to suppliers and handling packaging and shipping) and focus on the general company

objectives and course of action.

3 Managing Partners

2 Programmers

1 Web Designer

1 Information security

7 Market Segmentation and Client Profile

Twingle – Case

Study

Market Segmentation and Client Profile

Most internet auctions follow the English auction method: the initial price starts low and

is bid up by successive bidders. There are two main ways for an online auction website to

specialize in: live auctions and online auctions. Most auction websites (like e-bay) specialize in

the live segment where they simply serve as a platform for other sellers or other companies to

place their products directly to consumer. In these sites many times the platform does not take

responsibility for any problem that may arise between sellers and buyers. Twingle’s scenario is

the second case; there is only a relationship between Twingle and the buyer.

The 3 partner-managers of Twingle never really established who their target market

was. Anyone over 18 can register and use the website. However they know that their clients

have, in general the following profile:

Male,

Age between 18-60,

Very well informed,

Internet users,

Technologically savvy,

Interested in technological items,

Interested in fashion items,

Interested in home items.

Twingle feels that to be a Twingle client means:

Access to a new and innovative online auction service in Portugal.

Benefit from products with high market value with the possibility of purchasing

them at low cost.

Benefit from a safe service where the client is followed and helped from the initial

bidding until the final purchase.

Access the best deals in technological products, home items and fashion vouchers.

8 Twingle Auction Process

Twingle – Case

Study

Twingle Auction Process

The steps involved since interest from a client until the actual purchase in the Twingle

website are as follows:

1. To participate in the auctions one must first register in the database with a username

and password.

2. The user should buy bids, each with a cost of €0,20.

3. Each new bid adds extra time to the timer of the auction; this is visible on the site and

may vary from product to product.

4. Users pay for each bid they make, even if they end up not buying the product. The value

of the bids spent will be converted into discount vouchers with a life time of 30 days.

They can only be used by the user to discount on the price of future Twingle purchases.

5. The auction finishes when no more bids are presented in the time remaining of a

product. The user with the last bid before the end of the time wins the auction.

6. The winner of the auction is determined based on the data base of Twingle’s registry.

Past Sales Present Sale Current Price

Time Remaining

Price Sold

(not including cost

of bids made)

Store Price

9 Online Auctions Twingle – Case

Study

Online Auctions

The boom in online trading

The economic downturn will eventually lead to an increase in online trading in 2010.

Consumers will increase their purchases online looking for deals and promotions, especially

through auction sites. Craigslist, eBay, Twingle and many others will probably see their traffic

increase exponentially. According to the website Strangecorp.com, retailers will therefore have

to make a more competitive offer to sell their products in order to attract new users to their

websites. The business model of online companies might have to be based on marketing

strategies that include offerings and promotions in order to increase customer loyalty and in

the end sales.

Ecommerce

According to Forrester Research, US online retail reached $175 billion in 2008 and is

projected to grow to $335 billion by 2012. Business-to-consumer (B2C) ecommerce continues

its double-digit year-over-year growth rate, in part because sales are shifting away from stores

and in part because online shoppers are less sensitive to adverse economic conditions than the

average US consumer. Despite the continued growth of the channel, online retailers face

several challenges to growth: online stores are broadly perceived as a second choice for

shoppers, online retail is becoming increasingly seasonal, and online shoppers rarely admit to

browsing, which can drive valuable incremental dollars during their Web shopping experiences.

Future Forecasts

Over 10% of the Portuguese population uses on a regular basis online websites to

purchase products which accounts for more than a million people. This number is expected to

grow somewhere near 2.5 million by 2012. In 2009 around 88000 Portuguese companies used

online markets and it is expected that in four years about 45% of Portuguese companies will

10 Online Auctions Twingle – Case

Study

use e-commerce. This type of markets are booming in Portugal but there is still much room for

them to grow especially regarding the purchases made by individuals, also known as business

to consumer (B2C)

By 2012, almost 22% of the Portuguese population will be using online shopping.

Advantages and Disadvantages

The trend of the online auction markets has been one of rapid growth, both in size and

in number. One of the main reasons is that the apparent advantages of this market outweigh

the disadvantages for the company. A brief summary of some of the advantages and

disadvantages of the market are represented in the following table:

Table 1: Advantages and Disadvantages of Online Auctions

Advantages Disadvantages

Autonomy selling Physical distance between company and client

Autonomy buying High customer turnover

Product costs Little interaction with customer

Product exposition Low customer loyalty

Protection of goods Cannot place too many items on sale without

having many customers, however customers

like having variety to choose from

Stock Control

Relatively easier international expansion

(when compared to a traditional store)

Increased scope for new companies and new

products

Growing market means easier to raise new

clients

Reduced distribution costs (shipping is paid

11 Online Auctions Twingle – Case

Study

for by buyer)

Can offer wide range of products to the

consumer

The main disadvantages of the online markets are related to the fear that consumers

still have when shopping online. Although online shopping has increased significantly the last

few years, there are still a lot of people afraid to purchase anything online, let alone high tech

expensive products.

Online companies tend to advertise a lot in order for their customers to feel that they

know how the business works, that they know the structure that is behind the activity of the

company and that generates more confidence which allows the customer to feel safe and

secure when purchasing anything online.

12 Evolutionary Growth Twingle – Case

Study

Evolutionary Growth

Twingle has had an unexpected growth and daily gaining an average of over 150 new

registered clients. One of the hardest parts in this business model is starting up because of the

vicious cycle that naturally exists. Small websites with a small amount of clients cannot place

many items on sale at a time (because the number of clients would not allow enough bids to

make it profitable). However, part of what clients seek is a wide range of products, so potential

clients aren’t so attracted to smaller online auctions.

Twingle had an advantage of being one of the first to market with an innovative idea

which allowed for its initial and continuing growth. At first the company would place an average

of three new products every day to be auctioned, now the average lies somewhere between

ten and twelve per day.

Revenues have also increased over the months since start up. After a couple of months

revenues were less than €40 000, in October and November 2009 they were somewhere

between €50 000-€60 000 hitting an all time high in December topping the €70 000 mark. In

January things returned approximately to the level they were at in November.

See Annexes 1-3 for discriminatory numbers on the amount of visitors, originating traffic

sources (how visitors arrive to the site) and regional coverage (where the visitors come from)

during the months of November, December 2009 and January 2010.

13 Advertising and Distribution

Twingle – Case

Study

Advertising and Distribution

Twingle’s main distribution system is based on the company’s platform website. The

products are made known to the consumer and then auctioned and finally made available

through the website. After being purchased, the products are sent to the consumers thanks to

another company (CTT), the Portuguese public post service. However, Twingle’s main products

come from another website company called Pixmania. The products sold by Twingle are mostly

High Tech products such as mobile phones, computers, movie cameras, refrigerators, but also

perfumes or even vouchers. The products auctioned online are always new products with

warranty.

In terms of advertising, Twingle being a new company in the Portuguese market has

used so far only two methods to advertise for herself. The company uses the server Google as a

way to access her potential customers by appearing in the search part of Google’s front-page

with her own personal paid for link. Another way to advertise used by Twingle has been to

appear in little ads in other websites.

Twingle’s products are usually sold at a less expensive price than other products and

that contributes in part to the company’s success in the online market. The prices can vary

depending on the type of products or the number of interested buyers.

Twingle hasn’t been in the Portuguese market for a long time, but its methods in terms

of advertising and distribution have allowed it to keep selling new products at very low prices.

However the market in which the company operates is very immature. People tend to be

extremely cautious when buying products online and the use of credit cards doesn’t always

attract new customers. Twingle is a small, recent but innovative company, and still as progress

to do in the online market especially in terms of its dependence towards the online platform it

is attached to and which often tends to collapse and loose all auctioned data recorded so far.

Twingle’s marketing strategy essentially comes down to advertisements in other

internet sites. The logic behind this is that Twingle users are internet users; therefore it makes

sense to advertise where there is visibility for the target market.

14 Advertising and Distribution

Twingle – Case

Study

A great majority of Twingle’s expenses come from advertising expenses. The thing about

internet advertising is that even though there is a fixed cost, part of what is paid is variable

depending on: the number of clicks to visit the website, the number of registered clients that

arrived from that original link and the amount of money those people spent on the website.

Twingle estimates that they spend around €15000 a month on advertisement – less on

the months with less return and more and on the months with more. The return is not the total

revenue of the company (currently the total revenue ranges between €50000-€60000). The

return deriving from the website where Twingle advertises – designated “advertisement

revenues” – is calculated by adding total of what those clients – who registered in Twingle after

having clicked on the link from one of Twingle’s paid advertisement – end up spending in the

Twingle website.

Once again it is important to understand that the return here considered is not the total

revenue of the company, it is only the direct return from clients that originated from websites

where Twingle pays to advertise in. It does not consider the indirect return that derives from

the word of mouth these clients create.

Table 2: Advertisement Expenses and Advertisement Revenues

Revenues Expenses

Nov-09 17.535,00 € 15.000,00 €

Dez-09 32.790,00 € 15.000,00 €

Jan-10 17.140,00 € 15.000,00 €

0,00 €

5.000,00 €

10.000,00 €

15.000,00 €

20.000,00 €

25.000,00 €

30.000,00 €

35.000,00 €

Nov-09

Revenues

Expenses

0,00 €

5.000,00 €

10.000,00 €

15.000,00 €

20.000,00 €

25.000,00 €

30.000,00 €

35.000,00 €

Dez-09

Revenues

Expenses

0,00 €

5.000,00 €

10.000,00 €

15.000,00 €

20.000,00 €

25.000,00 €

30.000,00 €

35.000,00 €

Jan-10

Revenues

Expenses

15 Advertising and Distribution

Twingle – Case

Study

The monthly expenses can be approximately divided into the following discriminated

expenses:

Table 3: Discriminated Expenses

Google 6.000 €

Netaffiliation 4.000 €

Facebook 2.000 €

Various 1.500 €

Megaclick 500 €

Eroadver 500 €

Sapo 500 €

total 15.000 €

See Annexes 4-6 for more information about discriminated number of clicks, number of

registries and total money spent by people that derive from each of the websites.

16 Macro Environment Twingle – Case

Study

Macro Environment

The following section will consider a PEST (political-legal, economical, social and

technological) analysis of Twingle’s macroeconomic external environment.

Political-Legal

Twingle has various clauses that protect the company/seller, the website and the

buyer/client.

In Portugal there is currently no clear law regarding the legality of these websites. The

vastness of the internet does not allow the law to contemplate every specific case. However

that is something that worries legislators and there are already some specific laws for some

cases. It is difficult to administer laws in a platform, that even for the most understood in the

matter, is a giant world that is constantly changing.

Customer support and complaints management are a big concern for the company.

Since the legal scenario is not clear cut, it’s necessary to pass their own security tests and

present the legal rules with which the company guides itself.

Economical

All markets, including the online auction one, were affected by the global crises that

started in 2008. Despite the difficult and unstable scenario, Twingle managed to turn a profit in

the electronic auction market because of its innovative and differentiable project. This crisis

created doubt and reluctance from possible clients, but Twingle so far has managed to

differentiate in this market.

In this way, regardless of the economical instability the company has done well in the

market and used this crisis to its advantage by trying to show consistent alternatives which a

fragile client can start to believe in and bet on. Twingle managed to have an unplanned success

and sales volume with a very quick growth, with serious concerns about sustainability.

In such high-tech market, change is of the essence. This makes the market somewhat fragile

and hard to predict. In order to be successful a website must be versatile and discover what it is

17 Macro Environment Twingle – Case

Study

clients are seeking. So far Twingle has gotten this at least acceptably right; however there is

some worry about the future.

Social

The social facts have positive and negative impacts on this sector, the fact that

nowadays clients are more informed and more concerned, creates a positive impact for this

social context. The retraction on the acquisition of some products is due this exact fact, the pre-

purchase search for information makes the clients more experts and more able to analyse

them. Although there is the customer loyalty factor, clients search for what is best for them,

looking for websites that offer better condition even if they are for a short period of time and at

a cheap price.

There is, however, some retraction when it comes to the use of these types of websites

by the general population.

Technological

Technological impacts are positive and visible when it comes to quickness and how easy

it is to access the client’s account.

The Internet brought a positive comfort to the client allowing them, through these

websites, to access the personal account, bid from home, work, iPhone etc. We are talking

about a huge technological breakthrough.

However adding to this fact there is a positive response to these sites despite the

liability they have. With this indirect contact type of service the relation customer-seller

ceases to exist making it harder to build a trust relation.

Although the technological impact is positive it is necessary to take into account that the

use of the internet takes customers away from their sellers making it hard to build a long lasting

relation.

18 Micro Environment Twingle – Case

Study

Micro Environment

Main Direct Competitors

Bidrivals offers a way of buying new products at low prices through fun and exciting

auctions. Bidrivals’ organization is corporate, and focuses especially in supplying its members

an excellent customer service. They work with different product suppliers, both local and

global, and with internationally recognized safe payment methods, such as PayPal and

ClickandBuy.

Bidoloo Portugal, SA is a Portuguese law recognized society that develops a commercial

activity, which consists of trading consumer goods throughout the Internet, having the products

their price fixed by an auction-by-the-cent system. They are present in several countries, like

Finland, Estonia and Latvia. They are about to enter both the United Kingdom and Russian

markets. All auctioned products are new and from market recognized brands. The auctions

occur on a multi-country scheme, happening at the same time in Finland, Estonia, Latvia and

Portugal. They intend to apply in a domestic level this auction specialized e-commerce system

as soon as the number of national users justifies it.

19 Micro Environment Twingle – Case

Study

Table 4: Comparison between Twingle and competitors

Number of Users 27047

Country of Origin /

Countries

Portugal Finland, Estonia,

Latvia, Czech

Republic, Slovakia,

Spain, Portugal

USA, Australia,

Malta

Payment Methods

Years of Existence 04 / 2009 04/2008 4 / 5 years

Bid Price 0,20 € By packages:

Average price =

0,57 €

0,50 €

Functioning Hours 10h – 24h 7h – 22h 24 h

Limit of Winning

Auctions per person

(monthly)

No No 6

“Buy now” option No No Yes

Automatic Bidding

System

Yes No Yes

Presence in social

networks

Yes Yes Yes

Money refund for

unsuccessful bids

Discount vouchers

with 30 days life

time to be used in

No Discount vouchers

with 24hour life

time (since end of

20 Micro Environment Twingle – Case

Study

another purchase auction) that can

be used to

purchase the

auctioned product

at the “buy now”

price

Demonstration of

satisfied customers

No Yes No

Published articles

on the website

(press)

No Yes No

Market / Competitors Analysis

The financial situation that Portugal is currently living allows a stagnation of the demand

of products with high perceived value due to innumerous reasons, such as the increase in

unemployment.

This can be interpreted as a decisive factor also in the decrease of demand of companies

such as Twingle. However, if for one side the involvement of the consumer with high-priced

products has decreased in the last year due to the lack of capital, the opportunity of getting

such products at low prices, due to low-cost auctions can be interpreted as a boost to the

demand of consumers.

The low-cost auctions market is increasing. In the months of October, November and

December 2009 Bidrivals’ demand has grown 48%, Bidoloo 30% and Twingle shows a stunning

growth of 148%.

Twingle focuses in the quality of the products that makes available to the customers, as

well as in some safety assurances regarding both the bids, their respective payment and in the

sending of won products to the customers.

21 Micro Environment Twingle – Case

Study

Reliability and Quality Service:

The customer has the possibility of receiving the product in Twingle facilities;

The customer has the possibility of acquiring high-tech products with low prices;

The customer enjoys the less expensive auction website available in the market.

22 The Future Twingle – Case

Study

The Future

Twingle has been growing over the past months, but it has difficulties with client

retention. This end up flattening what could be an exponential growth. This makes one wonder

about the viability of the business model itself. Also, Twingle faces a challenge because of its

low credibility.

Credibility Problem

Despite Twingle’s privacy policy and their desire to have a transparent and honest

company, Twingle has suffered harsh criticism and in general does not have a tremendously

high credibility among internet users. Obviously these sites have more people losing bids then

those who win (otherwise they would not make money) and those who lose sometimes feel like

they were cheated. Therefore it is normal for these kinds of sites to initially have some

credibility problems, however Twingle’s case is more so, and therefore slightly worrying for the

managing partners.

See annex 7 for Twingle’s privacy policy.

Future Possibilities

There are a few possibilities for future courses of action. However, the three managing

partners cannot seem to decide on whether or not they should follow all of them, one of them,

or even none of them (at least in the short term).

International Expansion

One possibility is international expansion. The initial plan envisioned Twingle on an

international level, at least including all of the Iberian Peninsula. The contract with the current

transporter already includes that provision. However it does not go without a cost, for one

thing the company would need to hire someone fluent in Spanish. They would also have to buy

a new domain (seeing as currently they own www.twingle.pt) but www.twingle.com is owned

23 The Future Twingle – Case

Study

by an individual in the United States who said he would sell the domain for US$7000,

(approximately €5100).

Also, Twingle is a registered brand for German motor engines, there shouldn’t been any

problem since the business model is completely different, but they could be forced to change

brand. This would be a huge blow after all the investment in gaining brand recognition in

Portugal. There is also the possibility of expansion to other countries, not only Spain. This would

mean however, a higher investment cost and greater risk, but the principal would remain the

same.

“Buy Now” Option

The second possibility is creating the “buy now” option, similar to the concept Bidrivals

uses. Here the website would function not only as an online auctioning platform but as an

online store as well. The concept serves to reduce the risk of the bidder, that way if he/she

loses the biddings he/she can use the value of the bids in the following 24hours to discount on

the purchase price of the item. This system could be implemented alongside the existing one

(discount vouchers with a 30 day life time) or could replace it.

The main disadvantage though is that a great chunk of Twingle’s profit probably comes

from unused vouchers (either because people give up trying to buy something or because the

value of what they manage to buy ends up being less than the value of vouchers they have). By

creating this option the amount of unused vouchers would most likely decrease and to make up

for it the company’s sales would have to increase to gain profit from the difference between

the “buy now” price (store price) and the cost of buying it from their suppliers.

Other Possibilities

The three managing partners know that there may be other courses of actions that they

may not be taking into consideration. They are open to new suggestions, from within their

company (i.e. employees) and from without, and are actively searching for ways to improve all

aspects of the business.

24 The Meeting Twingle – Case

Study

The Meeting

As Luís, Rui and João (the three managing partners) sat down together one day during

work they soon began to talk about the company’s future and their own as well.

“You know this growth rate can’t go on forever” said João, “we definitely need to think

about the store possibility.”

“The thing is you understand that most of our profit comes from unused vouchers. And

auctions are our core competency, it seems like you want to go head into something without

completely thinking about the consequences” countered Rui.

“No, I haven’t crunched the numbers, but there’s always some margin of profit, even in

a direct a sale. Also I’m taking into consideration our client lose rate, it costs money to get them

back.”

“Well for one thing it’s always high in this kind of market, and we don’t really know that

much in the first place to make that kind of decision. Plus it’s pretty much just you who wants

to do this, and I don’t think you can convince me or Luís that easily, at least not in the short

run.”

Luís, who seemed to have been musing to himself for the whole time spoke up: “You

guys seem to be forgetting about the expansion possibility. Spain seems like an obvious choice,

but is it worth it? Is now the right timing? What about the domain?”

“Sure it’s easy to say that, but is it doable?” Rui wondered. “I’m also worried about

current situations we face. Is our marketing correct, should we just focus on advertisement?

What about our credibility problem?”

“Since I’m the one who decides where to invest our money in advertisement I guess

you’re asking me” João replied. “You know I think that’s the way to go. We need lots of visibility

and since our clients are internet users it makes perfect sense to advertise in their world. The

credibility issue I believe is just a matter of time until we win the public’s trust.”

“Well I’m worried that we may be becoming too accustomed to our method of working.

I know we are constantly working on our website and improving it, but is that all we should be

doing?” asked Luís.

25 The Meeting Twingle – Case

Study

“We can’t seem to agree on what the best path is for the future,” stated Rui.

“Well if you want to talk about the future, where do you see yourself in ten years?”

asked João.

“Hopefully not doing the same thing I’m doing now. I don’t want to be supervising and

talking to suppliers for the rest of my life.”

“Guys we’re getting off track and we have day to day work to do. I guess for now we will

have to agree to disagree about our company’s future. I just know that we can’t keep on

waiting to see what tomorrow will bring” concluded Luís.

26 Financial Data Twingle – Case

Study

Financial Data

Balance Sheet (31/12/09)

27 Annexes Twingle – Case

Study

Annexes

Annex 1: Data Relative to January 2010

Visitors

133.172 people visited the website

Accounting a total of 951.379 site exhibitions and 270.739 visits

With an average 5:17 minutes on the website

42,66% were new visits

Traffic Sources

Out of the 270.739 visits:

40,08% came from direct traffic

33,77% came from links from other sites

26,15% came from search engines

Regional Coverage

Visits per country:

28 Annexes Twingle – Case

Study

Annex 2: Data Relative to December 2009

Visitors

132.569 people visited the website

Accounting a total of 928.257 site exhibitions and 278.351 visits

With an average 4:56 minutes on the website

41,19% were new visits

Traffic Sources

Out of the 278.351 visits:

41,93% came from direct traffic

36,42% came from links from other sites

21,65% came from search engines

Regional Coverage

Visits per country:

29 Annexes Twingle – Case

Study

Annex 3: Data Relative to November 2009

Visitors

110.506 people visited the website

Accounting a total of 919.512 site exhibitions and 258.760 visits

With an average 5:05 minutes on the website

39,37% were new visits

Traffic Sources

Out of the 258.760 visits:

45,39% came from direct traffic

36,13% came from links from other sites

18,48% came from search engines

Regional Coverage

Visits per country:

30 Annexes Twingle – Case

Study

Annex 4: Clicks Discriminated by Originating Website

Nov. 09 Dec. 09 Jan. 10

Eroadver 8340 33872 55808

Facebook 3394 17718 25091

Google - 19097 26970

Megaclick 12793 39071 9664

Megavideo 38 1079 4197

Netaffiliation - - -

Sapo 734 1958 1000

Various 42129 40435 54337

IOL - - -

Total 67428 153230 177067

Annex 5: Registries Discriminated by Originating Website

Nov. 09 Dec. 09 Jan. 10

Eroadver 40 136 117

Facebook 101 372 325

Google - 690 787

Megaclick 264 430 90

Megavideo - 4 16

Netaffiliation 3210 3286 3000*

Sapo 69 100 33

Various 511 599 454

IOL - - 9

Total 4660 5617 4831

Annex 6: Sales Discriminated by Originating Website

Nov. 09 Dec. 09 Jan. 10

Eroadver 155,00 € 1.225,00 € 760,00 €

Facebook 250,00 € 1.180,00 € 1.960,00 €

Google - 6.660,00 € 8.165,00 €

Megaclick 710,00 € 3.235,00 € 1.130,00 €

Megavideo - - 80,00 €

Netaffiliation* 14.970,00 € 14.195,00 € 14.000,00 €*

Sapo 80,00 € 940,00 € 1.020,00 €

Various 1.370,00 € 5.355,00 € 3.925,00 €

IOL - - 100,00 €

Total 17.535,00 € 32.790,00 € 17.140,00 €

* estimates: data not yet

collected

31 Annexes Twingle – Case

Study

Annex 7: Privacy Policy

Twingle values the privacy of its users and in this sense is committed to complying with

it, ensuring the confidentiality and protection of any personal data recorded by users. The

Privacy Statement is intended to ensure safety and privacy for the users, requesting and

collecting only data necessary to fulfill the service, according to the information displayed on

the company’s website. The user has complete freedom to access his personal data online and

can either correct it or dispose of it. Twingle assumes with its users the following commitments:

To gather and process all the data in a lawful and loyal way, collecting only the

information necessary and relevant to the purpose intended;

To allow the user to access his own data in order to correct any information

registered about him;

Not to use the data collected for any other purpose than the one intended by

Twingle;

To ensure the right to dispose of the data collected if requested by the holder;

To have security mechanisms that prevent the display, modification, destruction or

additions of any data by unauthorized persons;

Not to perform any combination of personal data, unless authorized by law;

The user has full freedom to access his data, rectify it or dispose of it.