Yahoo! snaps up Kelkoo for ฃ319 million
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2004-03-29 •
In a recent development, Yahoo! has acquired Kelkoo for ฃ319 million. This is another blockbuster deal which rekindles memories of the dotcom boom. Kelkoo, which enables users to compare prices of products across hundreds of online retailers, has seen off several well-funded competitors since its launch in 1999.
Dozens of investors saw price comparison as an area in which the Internet could beat the high street. But it was only Kelkoo that secured the critical mass of customers necessary to attract high volumes of advertising and generate large payments from retailers when shoppers are referred to their sites. Operating across nine European countries, Kelkoo has acquired rivals in the UK, Spain, Norway and France and has been profitable since the fourth quarter of 2002.
The purchase of Kelkoo, which has recently launched its own contextual advertising service, will increase Yahoo!'s user base and boost its advertising revenues. Terry Semel, chief executive, Yahoo, says, Kelkoo will add depth and breadth to Yahoo!'s integrated network of services for consumers and adds another set of powerful tools to marketers seeking to reach them.
Search has become the new battleground for the major US Internet companies. Yahoo! and Microsoft are pouring hundreds of millions of dollars into catching up with Google, which remains the number one search site. Google recently expanded its own advertising operations, using its search technology to allow advertisers to insert Google-sponsored links next to relevant content on websites. It has also launched its own price comparison service, Froogle.
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