eBay has announced that is acquiring Shopping.com in an all-cash transaction. Only five months ago, in the wake of one analyst initiating coverage on the company with a "sell," we opined that Shopping.com was basically built to be acquired. Not that there's anything wrong with that.
Rationale: in spite of the success of shopping search as a category, and its advantages for retailers, consumers need to decide to use the engine in the first place. A similar rationale, I suppose, to the battle that was faced by nascent pay-per-click search engine GoTo.com a few years ago. Great idea for advertisers, but no one was really using the engine. That changed when they made deals with Microsoft bCentral, Netscape, and finally, AOL and MSN, before allowing themselves to be acquired by Yahoo.
A certain number of people use shopping engines. The category had good initial growth. But it's safe to say it was getting to be an uphill battle competing against eBay, Amazon, Yahoo, and Google's Froogle threat.
That being said, unique third-party shopping review sites (those remaining, and those yet to be invented) play an important role. And portals like Yahoo and Google can play an important role too, if they aggregate third-party results and reviews instead of simply directing users to their own shopping sites.
Posted by Andrew Goodman
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