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Kelkoo shopping site bought by Yahoo

Kelkoo, which has been profitable for more than a year, has long been tipped by European bankers as a potential candidate for an initial public offering or a sale to a company such as Yahoo or Google.

Yahoo Inc. said on Friday it agreed to buy European price comparison Web site Kelkoo SA for about 475 million euros ($575 million) in cash to expand its range of Internet commerce portals.

The deal, which is expected to close in the second quarter, helps Yahoo beef itself up in overseas markets to compete with Google Inc. and Microsoft Corp's MSN unit in Web search technology.

Yahoo has already bought Overture and Inktomi to strengthen its Internet search operations. ``Commerce has emerged as a key component of search,'' said Yahoo Chief Executive Terry Semel in a statement on Friday.

Google, the No. 1 Internet search engine, has developed its own comparison shopping site Froogle, which is still at the testing stage. It was not immediately clear if Google's plans to sell advertising on Kelkoo, revealed in January, would be affected.

Yahoo, which is recovering from a slump in online ad sales, said the cash payment for up to 100 percent of Kelkoo's share capital could be subject to adjustments.

Yahoo said it did not expect to reduce the 250-strong workforce at Kelkoo, which will become a subsidiary of Yahoo. Kelkoo Chief Executive and founder Pierre Chappaz will continue to run the company's operations.

The service, which allows users to compare prices for online purchases, has 27 million monthly European users, making it the continent's third-largest e-commerce site.

Founded in France in 1999, Kelkoo has since merged with or acquired several companies in the United Kingdom, Spain, Norway and France.

Source: Money Central MSN

Posted by nakul at March 26, 2004 01:29 PM | TrackBack