Bad press for CSEs

In the last week, I have read a couple of articles related to CSEs that were not really positive. Among those:

TechCrunch UK – Price comparison sites are going, going, gone…

“[...] For now though, PriceGrabber is not the only one ‘on the block’. Yahoo has been looking to sell Kelkoo, which operates in 10 European countries, since October last year (here are some good reasons why). Elsewhere, Pricerunner, launched in Sweden in 1999 and bought by ValueClick for £16m, seems to be losing momentum as bigger players have won the traffic and marketing game [...]“

Interactive Investor – Is it the end for price comparison sites?

“[...] Since then the cost of attracting traffic to such websites by bidding for Google key words has risen dramatically, thereby eroding profit margins. And with the US economy on the brink of recession and the UK economy suffering a slowdown, consumers have less disposable cash to spend online or offline. [...]” (for those who don’t like suspense, the end of the article seems to conclude that: “no, this is not the end” ;) )

The Independent – Price site shake-out

“[...] One of the key issues for price comparison sites is that the market has become overcrowded which means that only the most successful are likely to survive. [...] And the market for companies which focus on retail products is even more saturated. One analyst said the barriers for entry for those comparing retail products, such as flat screen televisions and DVDs, were lower than those comparing financial products, such as mortgages and insurance, which meant there were many small players in the field.[...]“

Those articles are following the recent news that PriceGrabber is for sale; and also the less recent news that Yahoo! was seeking to give more autonomy to Kelkoo, and previous rumors that Shopzilla may be for sale (which seems to be false in the end, by the way).

I’m really not good at business, so I’m not here for great business analysis, just a few thoughts:

• Indeed, the market is crowded with a lot of small players in each market. They can be better in terms of features than big players, because they don’t have the scalability issues to manage or internationalized products to develop and maintain; it makes them more agile to compete with big ones. But competition is good, so I’m not complaining ;)
• It may be more difficult to be a generalist price comparison site than playing on a niche market. That’s why Moneysupermarket rocks for finance, and Kayak has a great product on travel.
• Price comparison sites need to find the next gold mine after SEO and SEM. Could be as “simple” as developing brand recognition through online or offline advertisement?
• In the end, price comparison sites still bring some value to online shoppers, more and more beyond the price comparison itself. There are more and more people buying online; more and more shops that are online but difficult to find. So price comparison sites are transitioning to become “shopping search” or “shopping discovery” destinations: it’s the beginning of the process to blend social shopping and price comparison to bring more value to customers.