EcommerceBytes-NewsFlash, Number 1031 - June 02, 2005     1 of 4

eBay Buys Comparison Shopping Site for $620 Million

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eBay agreed to acquire Shopping.com, an online comparison-shopping and consumer-reviews website. eBay will add its listings to the Shopping.com service, according to the press announcement, but did not say if all eBay listings would appear or only Stores inventory. Currently eBay Store inventory does not appear on eBay's own search results pages unless there are 20 or fewer results or the shopper specifically chooses to search Stores (http://auctionbytes.com/cab/abn/y05/m02/i11/s01).

Some larger eBay sellers who have their own ecommerce sites are already using Shopping.com to drive traffic, but to their own websites, not their eBay listings. Merchants pay whenever someone clicks through to their site, whether or not the item is purchased.

eBay Powerseller David Yaskulka, who owns BlueberryBoutique.net, is currently working with Shopping.com to get his listings on the site. He said the acquisition could be good for eBay sellers, particularly if it saves them per-click costs on Shopping.com, or if eBay decides to display eBay-earned feedback on Shopping.com, boosting sellers' ratings.

Because Yaskulka sells on Amazon, BlueberryBoutique listings already appear on Shopping.com at no additional cost to him. Amazon is a Shopping.com merchant, and its own listings appear on the site alongside listings from its third-party merchants. It isn't clear how eBay will handle the listings from Amazon, nor is it clear how Amazon might feel about Shopping.com's new owners.

eBay will also be bumping into Google on Shopping.com; the site gets over 40 percent of its revenues through Google, according to Scott Devitt, Vice President of Equity Research at Legg Mason. Google has a shopping site of its own, called Froogle.com. It's free for merchants to submit inventory feeds to Froogle.

The Wall Street Journal landed an interview with eBay's Bill Cobb and Shopping.com's Lorrie Norrington before eBay even announced the planned acquisition Wednesday afternoon. The newspaper reported that Shopping.com will be operated as a separate eBay business, but said eBay plans to "marry" Shopping.com's epinions review system with eBay's feedback system.

Shopping.com was formerly called Dealtime and acquired Epinions and changed its name in 2003. It offers a product catalog to help consumers compare millions of products from thousands of stores, and its Epinions community consists of more than 400,000 reviewers who have written nearly two million detailed reviews that help consumers make informed buying decisions.

Shopping.com's merchant directory includes store descriptions and details about the stores' customer service, payment methods, special services, delivery options, state sales tax, and return policy. Interestingly, eBay's payment service PayPal is not listed in the payment method section, an omission that will no doubt change after the acquisition. eBay has been working very hard to convince etailers to use PayPal as an accepted form of payment for orders on their own ecommerce sites.

Shopping.com has competition in the U.S., including BizRate (which changed its name to Shopzilla); it competes in France and UK (http://www.dealtime.co.uk) against a European service owned by Yahoo called Kelkoo (http://www.kelkoo.com).

eBay now owns real estate in every segment of the ecommerce industry, from the auction and fixed-price marketplaces on eBay.com; ecommerce hosting services (Kurant); payment processing (PayPal); classifieds sites (Craigslist, Rent.com, Kijiji and others); and now a shopping portal.

Shopping.com competitor Shopzilla's Helen Malani said they are still digesting the news, which had been announced only a few hours earlier.

The acquisition, which is subject to regulatory and Shopping.com shareholder approvals, is expected to close in the third quarter of 2005.

http://www.ebay.com

http://www.shopping.com


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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