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%.

Contents 1 History of price comparison services 1.1 Shopping comparison 1.2 Early price comparison services 1.3 Consolidations and acquisitions 2 Technology 3 Business models 4 Notes 5 References 6 See also

[edit] History of price comparison services

The internet boom of the late 1990s made price comparison 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 Pricegrabber, Shopzilla, Dealtime, and NexTag.^{[citation needed]} Major portals like Yahoo!, AOL and MSN also offer comparison shopping services. In the UK some of the major comparison shopping services are DealClick and CompareStorePrices as well as the aforementioned U.S. websites which also provide UK services. The financial comparison sector has seen significant growth in the Uk with a large number of new sites emerging over recent years. Such sites include Money Expert and UK Financial Options[3].

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^[2] 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 offered. 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.

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 including Royal Mail, BT, Egg, and Barclays Bank. Many of these services have since closed.

As well as price comparison sites like www.pricesbolo.com which offer a very broad range of products for price comparison there are some that compare individual products. The providers of these services often claim to produce better results than the major comparison engines as they are concentrating on individual marketplaces.

[edit] Early price comparison services

Through 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. Globally, similar websites were launched, and the period continued to see various websites launched, merged, acquired and closed.

[edit] Consolidations and acquisitions

1998

• mySimon launched as the most comprehensive comparison shopping service with over 1,000 online merchants

1999

• BuscaPé is launched in Brazil. It is the first non-english language iniciative in comparison shopping.

2000

• Kelkoo merged with Dondecomprar and ShopGenie. Later that year Kelkoo and Zoomit finalised their £100 million merger^[3] with ZoomIt. Kelkoo's investors owned about two thirds of the merged company
• CNet acquired mySimon for common stock worth approximately $700M^[4]
• ShopSmart relaunched under Barclays ownership^[5]

2002

• Barclays announced that they were to close ShopSmart, with all traffic redirected to Kelkoo.^[6]

2003

• Dealtime acquired Epinions^[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]
• mySimon founders started Become that for the first time in the industry combines price comparison and web search for product reviews in one place.

2005

• eBay acquired Shopping.com for $620m^[11]
• E.W. Scripps acquired Shopzilla $525m^[12]
• Experian acquires PriceGrabber for $485m^[13]

2006

• In July, Idealo was taken over by the majority from the media company Axel Springer which purchased 74.9% of Idealo Internet GmbH for an undisclosed sum. ^[14]

2007

• MeziMedia (owner of Smarter.com) acquired by ValueClick for up to $352m ^[15]
• In June, private equity firm Providence Equity Partners bought two-thirds of NexTag.^[16]
• In August, the Hearst Corporation bought Kaboodle.^[17]
• In October, Microsoft bought Jellyfish.com for $50m.^[18]

[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 information extraction, fuzzy logic and human labour.

Another way comparison sites can collect data is through a data feed file. Merchants provide information electronically in a set format. This data is then imported by the comparison website. Some third party businesses are providing consolidation of data feeds so that comparison sites do not have to import from many different merchants. Affiliate networks such as LinkShare and Commission Junction aggregate data feeds from many merchants and provide them to the price comparison sites. This enables price comparison sites to monetize the products contained in the feeds by earning commissions on click thru traffic.

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 the site. Depending on the particular business model of the comparison shopping site, retailers will either pay a flat fee to be included on the site or pay a fee each time a user clicks through to the retailer web site or pay every time a user completes a specified action - for example, when they buy something or register with their e-mail address. Comparison shopping sites obtain large product data feeds covering many different retailers from affiliate networks such as LinkShare and Commission Junction. There are also companies that specialize in Data Feed consolidation for the purpose of price comparison and charge users for accessing this data. When products from these feeds are displayed on their sites they earn money each time a visitor clicks through to the Merchant's site and buys something.^{[citation needed]} Search results may be sorted by the amount of payment received from the merchants listed on the web site.^[19]

[edit] Notes

[edit] References

• Haag, Cummings, McCubbrey, Pinsonneult, and Donovan. (2006). Information Management Systems, For The Information Age. “Buyer Agents”. McGraw-Hill Ryerson.

[edit] See also

• Category:Price comparison services (lists individual web sites)
• Vertical search