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 O 1.1 Shopping comparison O 1.2 Early price comparison services O 1.3 Consolidation and acquisition * 2 Technology * 3 Business models

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 Rob Shopper. 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 My Simon (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.

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 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.

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 retailer's 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.

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

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] * Shop Smart relaunched under Barclay's ownership [4]

2002

* Barclays announced that they were to close Shop Smart, with all traffic redirected to Kelkoo.[5]

2003

* Deal time acquired Epinions[6]

2004

* Kelkoo acquired by Yahoo for '475m [7] * Price Runner acquired by Value Click 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 Price Grabber for $485 million [12]

2006

* Pdqdeals acquired elanstores.com Worlds Unique and First Comparison Shopping Site for Local Search 2007

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

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 labor.

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.

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 optimization" specialists, who attempt to increase prominence on the comparison sites by optimizing titles, prices and content. However, this does not always have the same effect, due to the differing business models in price comparison.

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 specified action - for example, when they buy something or register with their e-mail address.

About the Author

PDQdeals.com is a service of Elan Stores International LLC, a Delaware based company. The main goal of this company is to get the products and goods at the Quickest Time and at the Best prices for the general USA consumers.