Report: Can’t Buy Me Love – or Greeting Cards

Greeting card sites that do not charge a fee to send aheartfelt message will fare better than pay sites thisValentine’s Day, according to a new report.

Charles Buchwalter, vice president of media researchat Jupiter Media Metrix(Nasdaq: JMXI), said that like many Internetcompanies, some greeting card sites have turned touser fees in order to decrease their reliance ononline ads.

In this case, however, the move might not besuch a great idea, according to Buchwalter.

“Timing is everything, and embarking on this strategyduring the holiday season and in a depressed economycould backfire, allowing free, ad-supported servicesto gain share,” he said.

Traffic Down

According to the report, traffic to sites run byAmerican Greetings, including Americangreetings.com,Blue Mountainand Egreetings.com,dropped from 25.5 million visitors in November to 22.9million in December, after the company began chargingcustomers a US$11.95 annual fee to send most cards.

Blue Mountain, the largest of the three sites, suffered themost defections, with visits down 22 percent. Theother two sites saw traffic increase from November toDecember, the report said.

All three sites inform Valentine shoppers in apop-up “special announcement” that they still can browse all cards and can send a small selection of”everyday” cards, although they must pay to send holiday andbirthday greetings or to create custom cards.

Visitors spent less time on American Greetings sitesafter the company began charging, from an average of 13.1 minutes inNovember to 10 minutes in December — a 24 percent decline.

Some card-seekers kept site-hopping once they found outabout the fee. In November, just 16 percent of visitorswent to more than one site, but 27 percent did so in December.

It Pays To Be Free

Visits to free sites Yahoo! Greetingsand Hallmark.com, onthe other hand, both increased over the same period.

Yahoo! Greetings traffic rose 70 percent, from 5.4million visitors in November to 9.1 million inDecember. Hallmark.com saw visitor numbers increase from 4.7million to 8.2 million in the period, a 74 percent boost.

The two free sites also saw a significant increase inthe number of minutes visitors lingered after American Greetings instituted its fee, thereport said. Visit time on Yahoo! Greetings was up 24percent, from 8.5 minutes in November to 10.5 minutes inDecember. Time spent at Hallmark.com jumped 34 percent, from8.1 minutes to 10.8 minutes.

Flowers, Too

Greeting card sites will not be the only ones seeing alot of traffic on Valentine’s Day. W.R. Hambrecht analyst KristineKoerber said she expects 1-800-Flowers.com(Nasdaq: FLWS) to have a banner day, toppinglast year’s sales of $2.5 million.

In the wake of September 11th, Koerber said, “itappears that consumers are feeling more sentimentaland are taking advantage of opportunities to expresstheir feelings of affection through gift giving.”

1-800-Flowers will benefit from a strong brandreputation and expanded merchandise offerings, she noted.