PRICE COMPARISON SERVICE
On the internet, a price comparison service (also known as shopping comparison or price engine) allows individuals to see lists of prices for specific products. Most price comparison services do not sell products themselves, but source prices from retailers from whom users can buy. In the UK, these services made between £120m and £140m in revenue in 2005 [1], and is growing at an annual rate of 30% to 50%.
History of price comparison services
The internet boom of the late 1990s made the concept of price comparison both possible and profitable. In the subsequent 8 years, there have been at least 20 services launched in the UK alone. The recent trend has been towards mergers and acquisitions from larger, more general companies.
Shopping comparison
In the late 1990s, as more people gained access to the internet, a range of shopping portals were built that listed retailers for specific product genres. Retailers listed paid the website a fixed fee for appearing. These were little more than an online version of the Yellow Pages. Some of the biggest UK websites based on this model included:
- www.worldofshopping.com - owned by Royal Mail and has since closed
- www.btspree.co.uk - owned by BT and has since closed
- www.retail.co.uk - independent, but has since closed and the domain transferred to a different business
- www.shopsonthenet.com - independent and still running
- www.enterprisecity.co.uk - originally independent but was later bought by ShopGuide
- www.shopguide.co.uk - originally independent though later acquired by BarclayCard; acquired Enterprise City and relaunched to become www.shopsmart.co.uk
Generic portals and search engines launched similar services, including Yahoo!, MSN, and Excite. Companies that stood to benefit from increased internet shopping (especially credit card and delivery firms) launched similar sites. All the following have since been closed, and some links do not work.
- www.worldofshopping.com - owned by Royal Mail
- www.btspree.co.uk - owned by BT
- Egg Shop - owned by Egg, themselves owned by Prudential
- Indigo Square - owned by BarclayCard; this closed after Barclays Bank bought ShopSmart in November 1999
This started to develop into actual comparison, with editorial comment and user reviews about individual retailers and products.
Early price comparison services
In 1998 and 1999, various firms developed technology that searched retailers websites for prices and stored them in a central database. Users could then search for a product, and see a list of retailers and prices for that product. Advertisers did not pay to be listed, but paid for every click on a price. The biggest of these services included:
- www.shopsmart.co.uk
- www.shopgenie.co.uk
- www.checkaprice.co.uk
Globally, similar websites were launched, and the period continued to see various websites launched, merged, acquired and closed.
- US
- Europe
Consolidation and acquisition
- 2000
- Kelkoo merged with Dondecomprar and ShopGenie, and then acquired ZoomIt
- PriceRunner launched their service in the UK.[2]
- CNet acquired MySimon for common stock worth approximately $700M[3]
- ShopSmart relaunched under Barclays ownership[4]
- 2002
- Barclays announced that they were to close ShopSmart, with all traffic redirected to Kelkoo.[5]
- 2003
- Dealtime acquired Epinions[6]
- Dealtime relaunches as Shopping.com [7]
- 2004
- Kelkoo acquired by Yahoo for €475m [8]
- PriceRunner acquired by ValueClick for $29m plus shares[9]
- Shopping.com floated on Nasdaq Stock Exchange[10]
- eBay acquired Shopping.com for $620m[11]
- 2006
- Shopping.com launched in Australia[12]
Technology
One way price comparison sites can collect data is directly from merchants. Retailers who want to list their products on the website then supply their own lists of products and prices, and these are matched against the original database. This is done by a mixture of fuzzy logic and human labour.
An alternative approach is to crawl the web for prices. This means the comparison service scans retail web pages to retrieve the prices, instead of relying on the retailers to supply them. Some combination of these two approaches is generally used.
Similar to search engine technology, price comparison sites are now spawning "comparison site optimisation" specialists, who attempt to increase prominence on the comparison sites by optimising titles, prices and content. However, this does not always have the same effect, due to the differing business models in price comparison (see below).
Business models
Price comparison sites make money from retailers paying on a pay per click model. In other words, the retailer pays the price comparison site a set price every time a user clicks out to their own website.[citation needed]
See also
Notes
- ^ Shopping Comparison Engines market worth £120m-£140m in 2005, says E-consultancy
- ^ PriceRunner User Guide
- ^ CNet to acquire MySimon
- ^ Barclaycard relaunches ShopSmart shopping portal
- ^ Barclaycard to shut ShopSmart
- ^ Dealtime Signs Definitive Agreement To Acquire Epinions
- ^ Dealtime Relaunches As Shopping.Com
- ^ Yahoo spends half a billion in Kelkoo swoop
- ^ ValueClick to acquire Pricerunner.com: Interactive Marketing Leader to Expand into Comparison Shopping
- ^ Shopping.com Announces Initial Public Offering
- ^ eBay to buy Shopping.com for $620 million
- ^ Shopping.com Extends Global Presence with Australia Launch
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