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Future for Kelkoo with Yahoo! Cloudy

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As Yahoo! continues to redefine its business, Financial Times reports that Yahoo! is considering divesting Kelkoo, the European shopping comparison engine purchased in 2004 for $575 million. At the time of its purchase, Kelkoo was Europe's largest e-commerce service, operating in nine countries. Purchased to leverage this base and enhance Yahoo!'s search-and- advertising opportunities , the site has failed to meet expectations. Although Yahoo! has never broken out revenues from Kelkoo specifically, it has clearly not accomplished its mission, for Yahoo! today is third behind Google and MSN in European search visits according to ComScore.

With the return of Jerry Yang to the helm of Yahoo!, the search giant is reviewing its entire portfolio and seeking opportunities to enhance performance. As Yahoo! told the Financial Times, it is starting a process to give Kelkoo more independence - while evaluating strategic options for its long-term future. This is the business equivalent of handing the business unit a saw and inviting it to chop off the limb it is sitting on. When I consult the plastic magic 8 ball on my desk, it returns “Try again – future is cloudy” for this once bright acquisition.

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