Truthfully, Microsoft should pick up PriceGrabber, but MSFT is a bit busy these days with their frenemies at Yahoo.

So why IAC?
-Pronto has a solid base because it powers IAC’s Ask.com. The line in Pronto’s recent press release announcing ‘Pronto’s explosive traffic growth through the second half of 2007 coincides with its entree into the Social Shopping space’ is nice, but the reason for the growth is a mix of becoming Ask’s default shopping engine and aggressive keyword buying on the PPC engines. Pronto has room to grow in both those marketing channels, but adding PriceGrabber would allow it to tackle the third leg of a shopping engine’s traffic acquisition strategy: business development partnerships. PriceGrabber powers the comparison shopping functionality of hundreds of strong content sites. The addition of this partner network in conjunction with PriceGrabber’s established traffic base would quickly vault Pronto to tier 1 shopping engine status as opposed to a steady battle for growth through expensive PPC ads.

So is there any chance that this would happen?
-IAC has the money. IAC has the ecommerce ambitions (HSN, Cornerstone Brands, ShoeBuy, Gifts.com). IAC understands search (Ask). IAC understands the power of comparison shopping/lead gen (LendingTree). And if the company really wants to play in the shopping search space, which I believe it does, buying PriceGrabber would considerably accelerate it’s growth. There are some big cultural issues to overcome, but I think if both teams sat down to look at their strengths, I think they’d realize this is a solid match.

Note: I did not talk to either party about this potential match.

According to this Bloomberg article:

Experian Group Ltd., the world’s largest credit-checking company, said “lots of interest from private-equity and listed companies” in the PriceGrabber price- comparison Web site prompted it to consider selling the unit.

[thanks for the tip, Colin]

Now the interesting part is figuring out who the listed companies might be. Already fielded a couple calls on the subject this morning, and I’m truthfully having trouble pinpointing this one.

According to Reuters, PriceGrabber is up for sale.

PriceGrabber’s parent, Experian, had been hit hard by the credit crunch.

As explained by thisTelegraph article.

Experian’s problems are not of its making, though. Its most important clients are financial institutions who use the company’s services to vet prospective credit card and mortgage customers, for example. Because the banks are sharply scaling back their lending programmes, demand for Experian’s data is drying up.

From October 16, 2007 - January 16, 2008, Experian dropped aprx. 24% (here are historical prices). But the stock has rallied since that low to wipe out those losses over the last month (and is beating the DJIA and FTSE).

Not sure if the sale of PriceGrabber is meant to shore up Experian’s finances in the face of troubled times in the core business unit, but that hypothesis makes some sense. The question now is who would buy PriceGrabber. Need to think that one over.

According to the Retail Advertising and Marketing Association (RAMA), “This year, consumers plan to purchase 3.9 million televisions for Super Bowl Sunday, up more than 50 percent from 2.5 million last year. In addition, viewers plan to purchase 1.8 million pieces of furniture, up from 1.3 million last year.” (via NRF via Shop.org Smartbrief)

Some shopping engines don’t run strong merchandising efforts as they are vertical search engines. It’s not as if you see Google or Yahoo! going gangbusters on a vertical experience for Valentine’s Day or Christmas. But with the shopping engines, we’re talking about products, and I think consumers are very open to, and maybe even want, a very targeted shopping experience for a special occasion.

So which shopping engines are taking advantage of SuperBowl Sunday merchandising? Become & PriceGrabber (through their websites), and Shopzilla (through their email blast).

Become promotes a HDTV section on it’s homepage. Obviously the focus is on HDTVs (allowing consumers to search by size and manufacturer), but Tivos and Home Theater Systems are also highlighted. I especially like the links to Buying Guides and Discussion Forums, but those are a little hidden at the bottom of the page.

PriceGrabber’s SuperBowl Shopping Guide, features 2 anchor sponsors (JC Penney & OneWayFurniture) as well links to pages for a Westinghouse Widescreen TV and a high end Tivo. The real value of the guide, though, comes from the Personal Shopper section. All PriceGrabber has done is filtered its index to grab the good stuff - so Shop for Her brings up the pink jersey, earrings, and women’s Ts, Shop for Pets brings up costumes and rubber footballs for the pooch, and Super Bowl Necessities brings up the slew of high tech gizmos and gadgets that no true SuperBowl party can be without.

Shopzilla doesn’t have a special SuperBowl section, but they did send out a Super Sunday themed email blast last weekend (before my Giants stunned the Packers).

If we comparison shop for products, online education, travel, and mortgages, why not presidential candidates?

And according to PriceGrabber, Bill Richardson is my man.

Answer a bunch of multiple choice questions through Candidate Match, covering issues related to foreign policy, national security, the economy, social/healthcare, and science/environment, and PriceGrabber will tell you which candidate is your best match. The only thing that’s missing is an ability to weight a certain issue - if national security is more important to you than science/environment, then that could change which candidate is your perfect match (and in case you were wondering, Bill Richardson is not my perfect match…but PriceGrabber was close).

You can also rate and discuss candidates.

As we step into the election year, I’m sure PriceGrabber will get some great buzz because of this addition.

PriceGrabber has a snazzy new design (they are A/B testing, so you might not see it yet). Lots to discuss, and I don’t have time right now, but I wanted to highlight 2 big changes:
-There’s a really BIG search box at the top of the page
-PriceGrabber is pushing Storefronts, an incredible, but little covered program

New look:

Old look:

Thanks for the heads up, Mike!

A lot of people missed the emails sent by the shopping engines about seasonal rate increases, so here’s a quick summary:

Become.com - no rate increase
Yahoo! Shopping - no rate increase
Google Product Search - free
TheFind - free
Pronto - not holiday related, but there will be some adjustments, both up and down (Nov. 15)
Smarter.com - 20% rate increase for all categories (Nov. 1 - Dec. 31)
Shopzilla - 25% rate increase for all categories (Nov. 12 - Dec. 31)
PriceGrabber - 25% rate increase for all categories (Nov. 1 - Jan. 15)
NexTag - 25% rate increase for all categories (Nov. 1 - Jan. 2)
Shopping.com - 10-25% rate increase depending on category (Nov. 15 - Dec. 31)

It’s that time of year again. Many of the shopping engines have raised their cost per click (CPC) rates for the holidays. The shopping engines do this to counter increased rates on Google Adwords and Yahoo! Search Marketing and justify the move by saying that conversion rates increase during the holidays. In effect, the shopping engines are saying that merchants still made out like bandits and they have to cover their collective asses.

Shopzilla will increase its CPC rates by 25%. The change takes effect on November 12 and goes through December 31, 2007. Ok, at least Shopzilla moved the increase out to the 12th as opposed to starting November 1.

PriceGrabber increased its CPC rates by 25%. The change took effect on November 1 and goes through January 15, 2008. Ahhh…January 15? Excuse me?

NexTag increased its CPC rates by 25%. The change took effect on November 1 and goes through January 2, 2008. A 25% increase never feels good, but this is the one increase I don’t think merchants are worried about. NexTag continues to drive incredibly qualified traffic.

And then there’s Shopping.com. Not only did they they move the rate increase out to November 15 (as opposed to November 1), but they aren’t doing a blanket increase of 25% across all categories. Incredible. Someone listened!

In some random course in college, I had a professor give a class about generalizations…how dangerous and wrong they often were.

NexTag, Shopzilla, and PriceGrabber are saying that conversion rates increase during the holiday shopping season. But I’m not so sure that this Forklift seller is going to see a huge spike in conversion. Or that people will be adding projection mounts to their holiday wish lists.

NexTag, Shopzilla, and PriceGrabber are saying that CPC rates increase for them during the holiday shopping season. Again, I don’t think that argument holds for across all product categories. Do bids for textbooks on Adwords or YSM really increase 25%?

In other words, while Shopping.com didn’t get it perfect this time around, they get an A for effort, moving forward with a variable rate increase of 10-25% as opposed to a flat increase of 25%. Office equipment rates will only increase 10%. Media (books, movies, videos) rates will only increase 10%. Here’s the complete rundown:

Categories % Increase
Cars 10%
Clothing and Accessories 10%
Computers 10%
Electronics 20%
Event Tickets 10%
Flowers and Gifts 25%
Health and Beauty 15%
Home and Garden 20%
Jewelry and Watches 20%
Kids and Family 25%
Magazine and Subscriptions 10%
Media 10%
Miscellaneous 10%
Musical Instruments & Accessories 25%
Office 10%
Sports and Outdoors 25%
Video Games 25%

As for how SDC decided on the % increases, Alisa and Tomer explained to me: “We’ve done some analysis looking at previous years, looking at deltas in different categories in rate cards from our search partners. As opposed to one size fits all, we’ve done the analysis to figure out what’s needed to cover our costs. And we’ve moved the [rate increase] from November 1 to November 15 to better reflect when that increase kicks in. What we’re trying to do this year is be more sensitive to reflect what we’ve seen in the past. In some categories the keywords [cpc rates] increase more, in some categories the keywords [cpc rates] increase less.”

Sounds so simple. Makes perfect sense. Shopping.com is saying that the rates from their search partners (Google Adwords, YSM, etc.) don’t increase for all categories at a flat rate and therefore they aren’t going to pass along a flat rate increase to their merchants. Because…well…that would be wrong.

Shopping.com is good at buying keywords. The other shopping engines are also good at buying keywords. Some, like NexTag, might even be more efficient. Well, if that’s the case, why are we seeing a flat rate increase on NexTag, PriceGrabber, and Shopzilla?

Shopping.com has admitted that costs don’t increase 25% across the board (based on past data). If that’s true, then the other shopping engines are basically saying ’screw you’ to the merchants.

Ok, there might be a little more to it. Shopping.com in general seems to have a lower conversion rates then the other shopping engines because of poor partner traffic, so maybe they’re making up for that with lower CPC rate increases.

But that still doesn’t excuse the other shopping engines’ actions. They should immediately reconsider their increases for a number of categories. It’s the right thing to do.

Congrats to the PriceGrabber team for landing CNET. Seems that PriceGrabber will now be the exclusive provider of shopping comparison engine listings for CNET (including MySimon and ZDnet). Currently, CNET runs its own shopping comparison engine listings program while MySimon syndicates tech listings from CNET and gets the rest of its listings (Home & Garden/Soft Goods) from Shopping.com.

Here’s the email sent from CNET’s Joe Gillespie which details the change. You’ll hear more from me about this after I’ve talked to CNET and PriceGrabber:

We’d like to inform you of a change at CNET.com that is going to impact our relationship. After careful consideration, we have decided to transition the management of our CPC (cost per click) listings programs to our strategic partner, PriceGrabber.com. This partnership will provide you continued access to the powerful CNET.com audience while simplifying the process of managing your marketing programs.

After the transition, only the price listings for current listings partners of PriceGrabber.com will appear on CNET and its affiliates (ZDNet and mySimon). If you are not currently a listings partner with PriceGrabber.com, you will need to setup an account with them in time for the transition. To do this, please contact:

[left out for privacy]
As a result of this transition, your merchant listings agreement with CNET.com will be terminated as of the date of the transition to PriceGrabber.com, which we anticipate will happen between August 27 and September 1, 2007. We will notify you of the actual date of the transition as we get closer. An invoice for your August activity and a statement will be sent to you on September 6th. The statement will show the current amount due for August and all non-current outstanding amounts due. Contact information for the CNET Billing and Collections team will be provided in case you have questions on your invoice or statement. Please make every effort to pay all outstanding amounts to ensure a smooth transition.

We very much appreciate the support and business you have given CNET.com over the years and we hope you will continue to leverage the CNET audience through PriceGrabber.com. If you have any questions, please do not hesitate to contact us at www.cnet.com/partners.

Sincerely,

Joe Gillespie
Executive Vice President, CNET.com

In a sign of the times, PriceGrabber launched ShopGreen. All items in this section are PriceGrabber certified eco-friendly - think organic, biodegradable, energy saving, etc. Full details can be found here.

PriceGrabber is donating 5% of all profits from sales through ShopGreen to user selected charities.

I’m hoping to talk to the editor behind the section soon. Will keep you posted as I learn more.

From the email sent to PriceGrabber merchants:

PriceGrabber.com is proud to announce a strategic partnership with AOL. PriceGrabber will become the exclusive comparison shopping partner for AOL Shopping, providing an extensive catalog of thousands of merchants and millions of products. PriceGrabber merchant partners will benefit from a marked increase in already highly qualified traffic and placement on one of the world’s premier Internet destinations. We expect this increase in traffic to have a positive effect on partner ROI and continue to illustrate our value proposition to all partners. Building and strengthening our respected distribution network is yet another way we are able to continue to be the most trusted, innovative, and effective comparison shopping service. PriceGrabber’s position as AOL’s exclusive comparison shopping partner truly indicates the leadership position we have taken in the landscape of Internet shopping. We are very excited for the launch of our AOL partnership and know that this strategic alliance will create a significant increase in demand for our merchant offers.

This new partnership will provide a nice cushion if? when? PriceGrabber loses the Ask.com deal to Pronto (I can’t imagine this not happening, it’s just a matter of when Pronto is ready for such a deal).

While I’ve heard that clicks from AOL provide a very small percentage of Shopzilla’s revenues (Shopzilla is the current AOL Shopping partner), it’s still a potential blow to Shopzilla as the company is trying to recover from the potholes over the last quarter. Part of me wants to say that this is part of a strategy to cut down on poor performing partners, but Shopzilla continues to provide high conversion rates for the merchants I talk to/work with.

So where was Google when all this happened? Back in December of 2005, when AOL partnered with Google, I thought that Shopzilla might get replaced by Froogle. However, with Google’s focus on Base as opposed to Froogle, I guess it’s hard to justify a partnership as Base doesn’t have a monetization component (at least not yet).

December 14, 2005 Update: Read my latest coverage of Experian’s acquisition of PriceGrabber.

Ok, I’m impressed with PriceGrabber Autos because it’s not just another lead gen system. As opposed to collecting an email address and sending it to 10 dealers, PriceGrabber qualifies the lead by forcing potential buyers to jump through a number of hoops. Because of this, the consumer gets motivated dealers bidding for business and the dealer gets a buyer, not just a lead.

I met with Darren Davis, Business Director for Autos, at PriceGrabber a couple weeks ago. Talking with Darren was a blast as he has some great stories from the early days of the internet boom, having worked at Autobytel (8th employee) from ‘95 - ‘98 and Goto.com from ‘98 - ‘03…

A little introduction…
“What [our Autos section] does well is get customers 3 or more quotes from dealers they prescribe – they tell us who to invite and who not to invite. These quotes are every bit as competitive as if you walked into a dealership because the dealers know that other dealers are providing quotes. Also, the dealers want to work with the sites that do more to pre-qualify the buyers.”

“PriceGrabber’s Auto section is the most customer focused, dealer friendly car site. We scrub our customers more than anyone else out there. We actually make it hard to get your request while others have tried to increase volume. We have no problem showing a big, ugly stop sign as a warning. Because of this, dealers know that when they get a PriceGrabber request, that person is going to buy, it’s just a question of whether that person is going to buy from you. There are a lot of garbage providers out there. We are the exact opposite. We’d rather send a dealer 1 request a month from someone who is going to buy a car vs. 10 requests from people who won’t buy.”

“[After customizing a car], the customer has to answer a couple simple questions. First, the customer has to specify exactly which dealer he wants to compete for his business. You can refine the choices by distance [and specify that you only want to see dealers within a 50 mile radius] or you may have already talked to a couple dealers [and want to skip them]. In this way, the customer has complete control. Next, we verify the customer’s contact phone number. The user gets an automated call with an authorized code. [Darren demonstrated this on the spot.] You also have to create a user name and password as your quotes appear through PriceGrabber.com.”

Read the rest of this entry »

December 14, 2005 Update: Read my latest coverage of Experian’s acquisition of PriceGrabber.

Ok, I’ve received way too many emails asking if I know anything about PriceGrabber being acquired. I can truthfully say that I know nothing and (obviously) PriceGrabber won’t comment on the rumors.

I find the timing of an acquisition odd as I believe that this holiday season will blow away expectations and that any agreement now could leave money on the table, but I bet there are a million reasons why an end of year sale makes sense.

The rumors started last week when Josh Stomel said “according to multiple sources… Pricegrabber.com will be acquired very soon.” (Read his full post) Jay Weintraub picked up on this the next day and yesterday he pointed users to David Lewis’ Shopping Comparison Scorecard post from June 6, 2005, where he talks about Experian as a likely suitor. Back to Josh Stomel, his most recent post asks the question of whether the “placement of the categories being moved around” [on PriceGrabber] gives a hint at the likely acquirer. I’d be embarrassed to say that I’ve memorized the layouts of all the comparison engines, but if Experian (owner of LowerMyBills) is indeed the likely acquirer, then he’s probably hinting at Mortgages getting great placement on the homepage…although Autos and Cell Phones & Accessories also fit in well with LowerMyBills.

Ok, that’s a recap. I’m not in the business of perpetuating rumors, but too many people seem to have already ‘confirmed’ this story.

Here’s a look at the potential suitors:
Experian - owner of MetaReward, Affiliate Fuel, and LowerMyBills.
MSN - while Microsoft is definitely in the business of building rather than buying, the company has been pushing MSN Shopping (they even had Cedric the Entertainer promoting the site in Times Square in his underwear) and they are the only one of their peer group (Google & Yahoo!) without their own shopping comparison engine as they use PriceGrabber and Shopping.com listings.
Amazon - quick way to pick up thousands of merchants (they’ve been more aggressive recently in contacting prospective merchants).
FIM - I’ve said it before…these guys have community and content, but no commerce.
IAC - while Diller has said he thinks comparison engines make no sense, and Red Carpet is about to launch, you never know.
Oh, and Niki Scevak, former Jupiter Analyst, mentions Marchex - in his post.

Ok, so how much would PriceGrabber be worth? The company should fetch a premium for a number of reasons: 1) they are one of only two major independent comparison shopping sites left (NexTag being the other), 2) revenue on the site is from shopping comparison results (which I view as more valuable than Google AdSense ads), 3) quality sources of traffic (organic & distribution partnerships) - Pricegrabber doesn’t seem to rely as much on PPC advertising as other comparison engines, and 4) we’re going into what should be a breakout season for comparison engines.

At the same time, I don’t think PriceGrabber does anywhere near the revenue of Shopping.com and Shopzilla. I’d guesstimate a price between $300m - $400m.

Update - Looks like Experian is buying PriceGrabber. Read my follow up post.

More PriceGrabber posts:
PriceGrabber Autos - For Serious Car Buyers Only - November 30, 2005
PriceGrabber - Interview with Kamran Pourzanjani - November 29, 2005

What have you done behind the scenes (tech or otherwise) to prepare for the holiday season?
“We have amazing availability time – the redundancy of hardware down to reliability of software - there’s a lot of work to make sure everything is running. That’s one of the things that we always do going into Q4 – a lot of time goes into predicting load on the machines.”

Are you going to create a special holiday section? Does a special section like that really make a difference, or is it just a nice thing to have?
“Yes, we always do it. Part of it is that people don’t always know what to buy – we have top products throughout the site, but the holiday section gives you some ideas of what’s hot, if you have to buy something for your nephew or niece, for instance. In the end, though, we’re helping people make the decisions. It’s not meant to induce people to buy, it’s meant as a guide.” [Editor’s Note: Check out PriceGrabber’s holiday shopping guide made up of Featured Products, Shopping Ideas, Editor’s Picks, and How-to-Buy Guides]

How many merchants do you have? How many Storefronts?
“9000 total sellers on our site; 6500 storefronts and 2500 merchants.”

What expectations have you set for your team in terms of traffic or revenue growth?
“We’re a private company, so we don’t have to make numbers. As a company, we’re about customer service – it starts with the consumers, merchants, and manufacturers that work with us. The outcome [of this approach] will be better numbers in terms of unique users and revenue and profit – the goal is to build a business that’s sustainable. Today, I can go to Google and double my traffic, but a lot of [PriceGrabber’s] traffic is organic and from distribution partners. One of the problems with the business (and the internet) is that people are still talking about unique visitors. Unique visitors are great, but there’s a difference between unique visitors and valuable visitors. Imagine you have a coffee shop. If you have 1m people coming through and none of them buy a cup of coffee, it’s great for wearing down the carpet, but not good for business. The quality of the traffic matters and people are getting smarter in this respect. Some of the measuring companies, too – look at Alexa [which looks at] reach and the quality of the visitor (page views, etc.) - they are not just counting the number of visitors. Over time, whoever has dominance in terms of organic traffic will do well.”

“The question is who is walking the walk. We’ve never had a pop up ad on our site. We don’t advertise through spyware/adware. If an ink cartridge is generic, we call it generic. ”

“I believe that we’re the only company that loses money on the PPC engines as we take you to a product page; we’re saying here’s a digital camera, there are no Google results. This is our investment to bring more people to understand what comparison shopping is. And if that’s what you’re doing, why have the ads at all? A preponderance of people will click on the Google ads, and we’re trying to get people to what they’re looking for as quickly as possible. PriceGrabber is taking people through a complete shopping comparison experience. Let’s build brand equity as opposed to see how I can monetize the click as quickly as possible.”

“In 2004 our revenue from Google was 2% of total revenue. We don’t do arbitrage.”

Read the rest of this entry »

I talked with Ron LaPierre, Vice President of Business Development at PriceGrabber. Ron has been with the company since April 2002. Prior to his position at PriceGrabber, Ron worked at Overture where he was responsible for the MSN and Ask Jeeves relationships.

How is PriceGrabber different than the other shopping comparison engines?
“Comparison shopping sites have become very popular. We’ve been at the forefront of the growth by focusing on innovation and user experience. Everything we do is with the user in mind.
We focus on many items but a few of the most important are accuracy, transparency, and comprehensiveness. Early on, we added “Bottom Line Price” which allows a user to enter their zip code so tax and shipping costs can be calculated correctly. Most of the other comparison shopping engines today have followed us with this feature, but what you’ll find is that we offer Bottom Line Price across a higher percentage of products and for a higher percentage of our merchant partners.”

How about on the merchant front?
“If you focus on the user, it will benefit the merchant, too. On PriceGrabber, the user has a wealth of information including accurate product listings, user reviews, professional reviews, product condition, rebate information, etc., and all this information is there to help get them as far down the buying path as possible. By the time they click on the merchant’s listing, they are an extremely qualified buyer. Combine those factors with our extremely clean and simple user interface, and we are in a position to be able to deliver an industry leading ROI to our merchant partners.”

What are PriceGrabber’s strengths?
“The last couple years, we’ve added to the breadth of the product offerings. I would have called it a weakness 2 yrs ago, but there’s been a significant focus on adding channels. However, we only do it when it makes sense and when we can deliver the same, consistent high quality user experience that our users get in our existing channels. We now offer our users a comprehensive comparison shopping experience across Read the rest of this entry »