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Product Search Engines Rev Up for the Holidays

The sites are offering deal-hungry consumers a way to quickly compare merchandise and prices from thousands of Web retailers.

November 27, 2003|Michael Liedtke | Associated Press

SAN FRANCISCO — It didn't take long for Paul Rattay to grasp the power of shopping comparison sites on the Internet. He figures he saved at least $150 on a Sony digital camera by turning to DealTime.com to hunt for the best prices with a few quick clicks of his computer mouse.

"I could have just gone to Amazon, but I figured I could get a better deal by shopping around a bit," said Rattay, a 34-year-old software engineer who ended up buying the camera from an online merchant so obscure he can't remember the name. "You have so much information at your disposal on these sites that I plan to use them as a reference for price points, if nothing else."

For deal-hungry holiday shoppers such as Rattay, the Internet is offering more help than ever, as online search engines morph into price-sorting machines that can compare products from thousands of merchants in seconds.

The shopping services have been around for awhile, but they have become increasingly useful in recent months. Most of the top sites have expanded the number of merchants that they track and introduced new features designed to make it easier for consumers to quickly call up an array of product research.

Product comparison sites have become such a major draw that they attracted 33 million unique visitors in October, according to ComScore Networks, a research firm. Total traffic to the sites rose 9% from the same time last year, making them one of the Web's fastest-growing categories.

The free shopping assistance is available through search services offered by California companies Google Inc., Yahoo Inc. and Ask Jeeves Inc., as well as specialty online commerce sites such as NexTag Inc., BizRate.com, PriceGrabber.com, MySimon, and New York-based DealTime -- now known as Shopping.com Inc. Shopping.com did best among the specialty sites in October, with nearly 15.5 million unique visitors. Like some of its rivals, Shopping.com is making a major holiday push -- it recently launched its first TV ad campaign in a few major markets.

Most of the sites scour inventories of major retailers such as Amazon.com Inc. and Target Corp., as well as quirky upstarts such as Petshed.com and Givinggallery.com. With the comparison sites monitoring so much merchandise, their services are gaining wider appeal after years of catering to gadget-loving geeks rummaging for bargains.

The fastest-growing areas on Yahoo's shopping channel, for instance, include home decor and clothing, said Rob Solomon, who oversees the product comparison service for the Sunnyvale, Calif.-based Internet giant.

Culver City-based PriceGrabber is so confident it can offer something for everyone that it is selling gift cards that can be used toward purchases from any of the 3,000 merchants tracked by its site.

It's all part of "an unmistakable shift in the way consumers open their wallets online," said Chuck Davis, chief executive of Los Angeles-based BizRate.

A year ago, BizRate's site monitored 5 million products carried by 3,300 stores. It now spans more than 25 million products from 39,000 merchants, which generally pay sites such as BizRate for referrals.

The sites typically include side-by-side comparisons of similar products made by different manufacturers, as well as prices offered by different merchants and reviews written by consumers.

The services can sift through a multitude of merchandise or focus on products that fit the shopper's preferences and price range. Most sites include tools that factor shipping costs into the final price and identify whether a product is in stock.

Although the sites profit from the referral fees they collect from listed merchants -- a factor that sometimes sways their search results -- the site operators insist their top priority is satisfying shoppers so retailers stay happy too.

"Merchants are really hungry for the customers that we send them because these are people who are usually really ready to shop," said Purnendu Ojha, chief executive of San Mateo-based NexTag.

Part of the reason for these sites' expanded popularity is the sheer growth of Internet commerce. Through mid-October, consumers spent nearly $37 billion at online retailers this year, excluding travel sites, according to ComScore. That was an 18% increase from the same period last year.

But even when they aren't planning to buy online, consumers increasingly are turning to product comparison sites to research prices and features before hitting the mall, said Dan Hess, a ComScore Networks analyst.

Despite his positive experience finding a camera, Rattay sees limits to the usefulness of product comparison sites. "I don't think I would use them to buy bedsheets," he said.

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