Yahoo buys European shopping site

/ Source: The Associated Press

Yahoo! Inc. is buying Europe's leading online shopping comparison service for about $575 million in cash, the latest push by the Internet giant to offer more ways to find merchandise and information on the Web.

The 475 million euro acquisition of Paris-based Kelkoo S.A., which was announced Friday, continues a recent Yahoo shopping spree aimed at improving the company's searching prowess.

In the past year, Sunnyvale-based Yahoo has spent more than $2 billion for two other search companies, Inktomi and Overture Services, in a bid to narrow the gap separating it from the Internet's leading search engine, Google Inc.

Buying Kelkoo "will help further Yahoo's goal to create the most comprehensive and best user experience on the Web globally," said Yahoo Chairman Terry Semel.

Like similar U.S. services, Kelkoo allows online shoppers to compare the prices of products sold by an array of merchants. The site makes money by collecting referral fees from merchants whose links are clicked upon by Kelkoo's visitors.

Shopping comparison sites have become increasingly popular as more people become comfortable with e-commerce. Many shoppers also use the online comparison sites to learn more about products and become more price savvy.

The popularity of the shopping comparison sites is translating into profits., the leading comparison site in the United States, earned $6.9 million on revenue of $67.2 million last year, according to documents filed with the Securities and Exchange Commission earlier this week. The Brisbane-based service is planning an initial public offering of stock to capitalize on its recent success.

Yahoo last year upgraded its own shopping comparison service to broaden its appeal. Google offers a comparison service known as Froogle. Other popular U.S. sites include NexTag, BizRate, PriceGrabber and MySimon.

Kelkoo, founded in 1999, compares the prices of more than 3 million products sold by more than 2,500 merchants. The company says it reaches nearly 10 percent of Europe's Internet audience. About 250 employees work for Kelkoo in nine countries. Yahoo anticipates retaining all of Kelkoo's work force.