PriceGrabber Suitors


December 14, 2005 Update: Read my latest coverage of Experian’s acquisition of PriceGrabber.

Ok, I’ve received way too many emails asking if I know anything about PriceGrabber being acquired. I can truthfully say that I know nothing and (obviously) PriceGrabber won’t comment on the rumors.

I find the timing of an acquisition odd as I believe that this holiday season will blow away expectations and that any agreement now could leave money on the table, but I bet there are a million reasons why an end of year sale makes sense.

The rumors started last week when Josh Stomel said “according to multiple sources… Pricegrabber.com will be acquired very soon.” (Read his full post) Jay Weintraub picked up on this the next day and yesterday he pointed users to David Lewis’ Shopping Comparison Scorecard post from June 6, 2005, where he talks about Experian as a likely suitor. Back to Josh Stomel, his most recent post asks the question of whether the “placement of the categories being moved around” [on PriceGrabber] gives a hint at the likely acquirer. I’d be embarrassed to say that I’ve memorized the layouts of all the comparison engines, but if Experian (owner of LowerMyBills) is indeed the likely acquirer, then he’s probably hinting at Mortgages getting great placement on the homepage…although Autos and Cell Phones & Accessories also fit in well with LowerMyBills.

Ok, that’s a recap. I’m not in the business of perpetuating rumors, but too many people seem to have already ‘confirmed’ this story.

Here’s a look at the potential suitors:
Experian – owner of MetaReward, Affiliate Fuel, and LowerMyBills.
MSN – while Microsoft is definitely in the business of building rather than buying, the company has been pushing MSN Shopping (they even had Cedric the Entertainer promoting the site in Times Square in his underwear) and they are the only one of their peer group (Google & Yahoo!) without their own shopping comparison engine as they use PriceGrabber and Shopping.com listings.
Amazon – quick way to pick up thousands of merchants (they’ve been more aggressive recently in contacting prospective merchants).
FIM – I’ve said it before…these guys have community and content, but no commerce.
IAC – while Diller has said he thinks comparison engines make no sense, and Red Carpet is about to launch, you never know.
Oh, and Niki Scevak, former Jupiter Analyst, mentions Marchex – in his post.

Ok, so how much would PriceGrabber be worth? The company should fetch a premium for a number of reasons: 1) they are one of only two major independent comparison shopping sites left (NexTag being the other), 2) revenue on the site is from shopping comparison results (which I view as more valuable than Google AdSense ads), 3) quality sources of traffic (organic & distribution partnerships) – Pricegrabber doesn’t seem to rely as much on PPC advertising as other comparison engines, and 4) we’re going into what should be a breakout season for comparison engines.

At the same time, I don’t think PriceGrabber does anywhere near the revenue of Shopping.com and Shopzilla. I’d guesstimate a price between $300m – $400m.

Update – Looks like Experian is buying PriceGrabber. Read my follow up post.

More PriceGrabber posts:
PriceGrabber Autos – For Serious Car Buyers Only – November 30, 2005
PriceGrabber – Interview with Kamran Pourzanjani – November 29, 2005

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7 Responses to PriceGrabber Suitors

  1. Vic Berggren says:

    I think MSN should aquire. I tried to sign up for their (MSNs) comparison shopping services and was turned away because of the monthly 5K minimum spend. They’re missing lotsa money from small business owners such as myself.

  2. John Lattuca says:

    Great Interview!

    I am very curious how PriceGrabber has 2500 merchants (excluding storefront merchants) and yet Shopzilla claims to have over 66,000 merchants. Can Shopzilla actually have 66,000 merchants?

  3. Josh says:

    I like the article…

    Re: Nextag, something needs to happen soon with them. They pulled their IPO that was supposed to happen in JAN. That’s what happens when you have 2 CEO’s that are WAY different :-) It will be fun..

    So… Put those feelers out… I have http://www.compare.com that we are going to be ready for soon :-) Let’s get this talent and build it better that ever :-)

  4. […] product like this, we’ll see longer term returns.” Read more PriceGrabber posts: PriceGrabber Suitors – November 30, 2005 PriceGrabber – Interview with Kamran Pourzanjani – November 29, […]

  5. PriceGrabber Rumours

    Rumours have been wild lately in the blogosphere about Experian acquiring PriceGrabber. Several blogs (1, 2, and 3) have pointed to my article on June 6th (Shopping Comparison Scorecard). Experian Interactive’s network of sites (e.g. Experian Consumer…

  6. […] h Stomel and Jay Weintraub have known about this deal for a couple weeks. See my previous PriceGrabber Suitors post for more. More PriceGrabber posts: PriceGrabber Autos – For Serious Car Buyers […]

  7. […] erest and tax of $25 million.” I said in a previous report that PriceGrabber should sell at a premium (although I estimated $300 – $400 million)for a number of reasons, but $485 million sou […]

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