Shopping Search Week 2005

This week, SearchDay features our annual roundup of new developments in the shopping and comparison search arena.

Although shopping and comparison search hasn’t received quite the attention or press that other specialty search areas such as local search and mapping have seen, it’s been a busy year in the space. We’ve seen mergers and acquisitions among the major players, and promising newcomers get into the game.

And with all of the attention focused on the resurgence of vertical and specialized search sites this year, it appears that shopping and comparison search is on track for an even more positive change going forward. To see just how much has changed, take a look at Shopping Search Week 2004 and Shopping Search Week 2003. Search Engine Watch members also have access to a categorized list of all of our blog posts on shopping and comparison search services.

A Year of Consolidation

The two largest players in the shopping and product comparison space were acquired this year. In June, eBay acquired Shopping.com for about $620 million in cash or $21 per share for all of Shopping.com’s outstanding shares.

Shopping.com is somewhat unique in the space, being one of the few companies to successfully float an initial public offering of shares in October 2004. The company had originally filed to go public in 2000, but pulled the offering in the aftermath of the dotbomb crash of that year.

Just days after the eBay/Shopping.com announcement, Shopzilla agreed to be acquired by media company E.W. Scripps for $525 million in cash.

Both eBay and Scripps have continued to run their acquisitions as stand-alone services, and plan to continue doing so going forward.

The other two major shopping and comparison companies, NexTag and PriceGrabber, are both privately held companies, and neither has plans to be acquired. However, Stephen Imbler, NexTag’s vice president and CFO did say that the company’s investors are expecting an exit strategy at some point, and the company isn’t ruling out either a sale or an IPO should a compelling opportunity arise.

The specialized comparison shopping services have plenty of competition from the major web search engines. However, some search engines have developed their own shopping search technology, while others have partnered with specialized players.

Google and Yahoo are continuing to develop and enhance their own shopping search services internally, and there’s no reason to expect any ownership changes. Both Google and Yahoo use data feeds and other services from other companies, but the core underlying technologies powering Froogle and Yahoo Shopping are largely homegrown.

By contrast, AOL, Ask Jeeves and MSN all have major partnership agreements with other services.

AOL’s new Pinpoint Shopping service was developed internally, but its product listings and ratings come from a partnership with Shopzilla. Ask Jeeves’ product search is powered by PriceGrabber. And MSN has alliances in place with PriceGrabber and Shopping.com.

Comparison Shopping Market Leaders

This year, Shopping.com maintained its traffic leadership position in the U.S., but just barely. With 18% share, Shopping.com narrowly edged out BizRate.com at 17%—but that’s not the end of the story. Last year, BizRate changed its name to Shopzilla. Factoring in Shopzilla.com’s 14% share, Shopzilla is the overall leader.

Shopping.com also gets additional credit, as it owns Epinions.com. Likewise NexTag, which owns Calibex. The table below shows market share figures measured by Hitwise for the week ending November 19th, 2005.

U.S. comparison shopping, weekly rankings for the week ending 11/19/2005 – Source, Hitwise.

While many of the U.S. leaders are also key players internationally, there are differences in other markets. For example, MSN’s eShop is the leader in Australia, New Zealand and Singapore, and the #2 player in Hong Kong. Kelkoo dominates the U.K market, with more than double the traffic of #2 player Shopping.com UK. Hitwise stats for all of these markets are available to Search Engine Watch members.

Tomorrow: A look at what the major players in the shopping and comparison search space have been up to in the past year.