In the 3 way battle for online dominance between Yahoo!, MSN and Google, things just got hotter. Today, Yahoo! acquired Kelkoo - Europe’s leading online comparison shopping site, in an all cash deal of EUR475million cash. Hitwise data from the UK and US retail markets shows why this strategy makes sense for Yahoo!.
• Yahoo! Shopping (http://shopping.yahoo.com) has continually been the most popular shopping site in the US amongst price comparison or shopping search sites*, attracting 1 in 10 visits made to the sector by US consumers. By contrast, Yahoo! Shopping in the UK has failed to compete at the top level.
• Kelkoo has dominated the sector in Europe. In the UK, “kelkoo” was the most recognized brand amongst the shopping search sites and consistently beat high profile rivals including Dealtime (aka Shopping.com) and Pricerunner.
According to Simon Chamberlain, General Manager of Hitwise UK: “We’ve seen 72% growth in the use of shopping search engines and price comparison portals in the past year. Through the efficient use of online customer acquisition programs, sites like Kelkoo and Shopping.com (aka Dealtime) have helped to grow the burgeoning ecommerce market by efficiently connecting consumers searching for specific products with the retailers that can deliver them.
This deal is important in that it continues Yahoo!’s strategy of capitalising on the phenomenal growth in revenues from search marketing. That strategy began by the acquisition of Inktomi, was strengthened by the acquisition of Overture and leads us to the acquisition of Kelkoo today.”
Significantly, this also means that MSN is left in the difficult position of sharing even more revenues with its competitor, Yahoo!. As Kelkoo powers MSN’s shopping platform throughout Europe, MSN will effectively be acquiring more customers for its competitors’ subsidiary, an awkward scenario.
* Based on Hitwise’s Shopping & Classifieds – Rewards & Directories category
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