Comparison shopping networks got sold quite often these days. Kelkoo is now owned by Yahoo, and it's been recently
ShopZilla's turn to be sold
for $525 million. ShopZilla is a simplified shopping platform created
by BizRate. People didn't hear much about Shopzilla, because mostly it
apeared in order to double BizRate's Search Engine exposure by
duplicating their offers under a new domain. The cool name, with tekki
flavour, and also the media coverage this pilot project got ensured a
fast market success. There aren't so many players left on the market,
and the open question is if on the longer run, this is a market to stay
in, or not.
If we analyze the business model of these
comparison networks, some things start to strike. First, they do
generate a lot of traffic, most of it coming from search engines, where
they master search engine budgets so that they always stay on top. They
have no physical catalog of products; and their categories are driven
by the offers they gather. Their original content is minimal, except
for eventual final shop reviews. Their skills are in grouping together
product offers, and in creating a "fake branding", as all they are are
gateways to the real shops. Once they succeed in raising huge monthly
traffic numbers, they monetize this traffic via Adsense/eBay type of
ads. This business model seems to have worked fine in the past, as
final shops didn't really own PPC knowledge, but things start to change
on this level quite fast. As this happens, I'd really hate to have
spent half a bilion dollars on a short-shot thingy.
Read the rest of this entry ... (123 words left)
