Price comparison service

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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%.

1 History of price comparison services
2 Technology
3 Business models
4 See also
5 Notes

[edit] History of price comparison services

The internet boom of the late 1990s made the concept of price comparison both possible and profitable.

In the United States, the first two internet comparison shopping services were Jango and RoboShopper. These services were initially implemented as client-side add-ins to the Netscape and Internet explorer browsers, and both required that additional software be downloaded and installed. After these initial efforts, comparison shopping migrated to the server so that the service would be accessible to anyone with a browser.

Currently some of the major U.S. Based comparison shopping services are MySimon (bought by CNET for over $300 million), BizRate, Dealtime, and NexTag. Major portals like Yahoo and MSN also offer comparison shopping services.

The original Roboshopper.com site still exists and has been re-targeted as a "Meta" tool which gives results from the leading comparison shopping sites, as well as product review and rating sites.

[edit] 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. As technology has improved, a newer "breed" of shopping Web portals is being created that are changing both the business model and the features and functionality offeded. These sites do not "aggregate" data-feeds provided from the retailers, they search and retrieve the data directly from each retailer site. This allows for a much more comprehensive list of retailers and the ability to update the data in real-time.

Major U.S. Sites:

www.mysimon.com - purchased by CNET
www.dealtime.com
www.bizrate.com
www.nextag.com
www.pricescan.com
www.pricegrabber.com
www.pricerunner.com
www.roboshopper.com - a "meta" site combining results from other comparison shoppers.
www.shopper.com
www.shopzilla.com
www.pricespider.com - site focused on aggregating data directly from the retailers and offering real-time updates.

Some of the biggest UK websites based on this model included:

www.worldofshopping.com - owned by Royal Mail 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

Some of the main sites in India are:

www.ultop.com
www.bechna.com
www.compareindia.com

Some of the main sites in Canada are:

www.kaday.ca

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.

[edit] Early price comparison services

In 1995, pricewatch.com originated as the first price comparison search engine, focusing on computer hardware and software related products. In 1998 and 1999, various other 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^{[citation needed]}:

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.

[edit] Consolidation and acquisition

2000

Kelkoo merged with Dondecomprar and ShopGenie. Later that year Kelkoo and Zoomit finalised their £100 million merger^[2] with ZoomIt. Kelkoo's investors owned about two thirds of the merged company
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]

2004

Kelkoo acquired by Yahoo for €475m ^[7]
PriceRunner acquired by ValueClick for $29m plus shares^[8]
Shopping.com floated on Nasdaq Stock Exchange^[9]

2005

eBay acquired Shopping.com for $620m^[10]
E.W. Scripps acquired Shopzilla $525 million^[11]
Experian acquires PriceGrabber for $485 million^[12]

2007

RoboShopper.com, one of the first comparison shopping services redifined itself as a "meta" comparison shopper offering results from a variety of sources.

[edit] 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).

[edit] Business models

Price comparison sites typically do not charge users anything to use the site. Instead, they are monetized through payments from retailers who are listed on comparison shopping site. Depending on the particular business model of the comparison shopping site, retailers will either pay a flat fee to be included on the comparison shopping site or pay a fee each time a user clicks through to the retailer web site or pay every time a user completes a specfied action - for example, when they buy something or register with their e-mail address.^{[citation needed]}