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On the internet, a price comparison service (also known as shopping comparison or price engine) allows individuals to see lists of prices for specific products. Most price comparison services do not sell products themselves, but source prices from retailers from whom users can buy. In the UK, these services made between £120m and £140m in revenue in 2005 , and is growing at an annual rate of 30% to 50%.
History of price comparison services The internet boom of the late 1990s made the concept of price comparison both possible and profitable. In the subsequent 8 years, there have been at least 20 services launched in the UK alone. The recent trend has been towards mergers and acquisitions from larger, more general companies. Shopping comparison In the late 1990s, as more people gained access to the internet, a range of shopping portals were built that listed retailers for specific product genres. Retailers listed paid the website a fixed fee for appearing. These were little more than an online version of the Yellow Pages. Some of the biggest UK websites based on this model included: Generic portals and search engines launched similar services, including Yahoo!, MSN, and Excite. Companies that stood to benefit from increased internet shopping (especially credit card and delivery firms) launched similar sites. All the following have since been closed, and some links do not work. This started to develop into actual comparison, with editorial comment and user reviews about individual retailers and products. Early price comparison services In 1995, pricewatch.com originated as the first price comparison search engine, focusing on computer hardware and software related products. In 1998 and 1999, various other firms developed technology that searched retailers websites for prices and stored them in a central database. Users could then search for a product, and see a list of retailers and prices for that product. Advertisers did not pay to be listed, but paid for every click on a price. The biggest of these services included: Globally, similar websites were launched, and the period continued to see various websites launched, merged, acquired and closed. Some of the top Price comparison sites can be found at http://www.PriceAsk.com Consolidation and acquisition 2000 2002 2003 2004 2006 Technology One way price comparison sites can collect data is directly from merchants. Retailers who want to list their products on the website then supply their own lists of products and prices, and these are matched against the original database. This is done by a mixture of fuzzy logic and human labour. An alternative approach is to crawl the web for prices. This means the comparison service scans retail web pages to retrieve the prices, instead of relying on the retailers to supply them. Some combination of these two approaches is generally used. Similar to search engine technology, price comparison sites are now spawning "comparison site optimisation" specialists, who attempt to increase prominence on the comparison sites by optimising titles, prices and content. However, this does not always have the same effect, due to the differing business models in price comparison (see below). Business models Price comparison sites make money from retailers paying on a pay per click model. In other words, the retailer pays the price comparison site a set price every time a user clicks out to their own website. See also Notes | ||||||||
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