decision factory

Will Kelkoo’s Sale Spur a Turn-Around?

Yahoo! sold Kelkoo today for a mere €100M – a fifth of what it paid in 2004 to acquire it (€475M). Beyond Yahoo’s internal issues and ability to absorb a large entity, a few fundamental issues have plagued Kelkoo and its likes (Shopping.com, PriceGrabber.com, etc.).

Kelkoo and other first-generation price comparison engines have a hard time establishing themselves as mainstream destination sites for online shoppers. Online shoppers are much more likely to start their product search on Google than on any of the price comparison engines.

For quite some time, they managed to get around this issue thanks to their SEO and ad arbitrage expertise. However, Google has worked hard to improve search results and capture an increased share of ad revenue. Search results have increasingly pointed more towards manufacturers and online retailers, while paid search prices has gradually made ad arbitrage prohibitive.

Newcomers, however, are showing possible paths for growth, as online retailers still struggle with product search, discovery and recommendation:

- Twenga is combining the largest product index (over 100 million products) with user reviews and coupons to reach the scale needed for a search, SEO and affiliate-based model to work;

- Like.com is turning online window shopping and visual search into a turn on;

- BlackFriday’s annual surge shows the untapped potential of events, such as Thanksgivings.