December 06 2006

Internet retailing stirs up search industry

A number of deals, launches and murmurings recently have underlined the value of internet retailing to the search market in the UK: marketing services agency ValueClick has acquired shopping.net; a new, shopping search engine has launched; yell.com has launched a food and drinks channel; and Google rankings have been causing a stir.

ValueClick Europe has bought shopping.net and its 27 European websites that provide comparison shopping, search and vertical market content. Through its acquisition, ValueClick will be able to leverage shopping.net's expertise in monetizing online traffic - as well as expanding its presence in Europe. [See full press release at end.]

Yootsa.co.uk has joined the ranks of UK search engines and launched a site enabling shopping-specific searches, alongside searches of the wider web. Yootsa.co.uk combines the US company's meta search engine with a shopping channel provided by shopping.com and a human edited web directory. Plans for yootsa.co.uk include job searches and expansion to country specific sites for Germany, France and Spain.

Following the expansion of the yell.com site to include an online shopping channel (as reported here), the directory has now added a food and drink channel to help people find specialist retailers - selling everything from fresh goat's cheese to ostrich meat and rare wine vintages. All of the retailers listed will accept orders online or by telephone. "Importantly, we are supporting independent suppliers who don't necessarily have a huge high street presence," said Eddie Cheng, president of Yell.com.

Meanwhile, Google's new landing page quality score algorithm for AdWords sponsored listings is causing a stir as some e-commerce companies find themselves dropping 30 places in the natural listings, reports e-consultancy.com. Having your site knocked-back at the busiest time of the year for internet retailers is not being taken kindly.

e-consultancy.com is also reporting on whether retailers should be less reliant on Google paid search marketing. An interesting article, with one reader commentating, "marketers have become obsessed with chasing what I call the 'Google Rainbow', seeking out that pot of gold that they never quite get to".

Interesting times indeed...

ValueClick press release follows:

ValueClick, Inc. (Nasdaq: VCLK) today announced that it has acquired Shopping.net, a privately-held company based in London, for approximately $13.3 million in cash, net of cash acquired. Shopping.net owns and operates 27 websites that provide comparison shopping, search, and vertical market content to European online consumers. Shopping.net will be integrated into ValueClick Europe to complement ValueClick Europe's existing online marketing services. Shopping.net websites - including shopping.net, classifieds.co.uk and mortgages.net - enable online transactions and attract more than two million unique visitors per month. Shopping.net generates revenue primarily through online advertising priced on a cost-per-click basis. Shopping.net is ValueClick's second European acquisition of online shopping destination sites, following the 2004 acquisition of comparison shopping site, PriceRunner.com. "Shopping.net is a great fit for ValueClick Europe," said Carl White, chief executive officer of ValueClick Europe. "This acquisition expands our online shopping destination site presence in the marketplace, and is another significant step in our European expansion. Shopping.net will complement our other businesses, including PriceRunner, Commission Junction and vcmedia." "Europe is an important growth area for ValueClick, and we're excited to add Shopping.net to our European operations," said James Zarley, chairman and chief executive officer of ValueClick. "Shopping.net gives Carl's team greater opportunities to leverage their expertise in monetizing online traffic and expands ValueClick's overall presence in Europe." Under the terms of the agreement, ValueClick has acquired all outstanding equity interests in Shopping.net for approximately $13.3 million in cash, net of cash acquired. For calendar year 2006, Shopping.net is expected to generate approximately $4 million in revenue and $2 million in adjusted-EBITDA.[1] Shopping.net's contribution to ValueClick's financial results for the quarter ending December 31, 2006 is anticipated to be immaterial. [1] Adjusted-EBITDA is defined as GAAP (Generally Accepted Accounting Principles) net income before interest, income taxes, depreciation, amortization, and stock-based compensation. Adjusted-EBITDA included in this press release is a non-GAAP measure.

Emma Herrod