PriceGrabber is a serious player in the comparison shopping game. According to Paid Content, they were founded in the boom (1999) and sold for US$485mm in Dec 2005 to Experian (no not Expedia, Experian). They are in the top leagues with (then) $60mm in revenues and (now) 11,000 merchants. Here is an Experian power point deck (in pdf form) if you want to know more.
Just before the sale, in Nov 2005 they announced the launch of a travel channel. The story went around very quickly: Gridskipper praised the integration with FlightStats; VerticalSearch carried an interview with Brett Snyder, the head of PriceGrabber Travel (most interestingly using the opening sentence that Shopping.com was leaving the travel sector); and the paper in pink - the Financial Times - even picked up the story. It seemed like all systems go for taking on the other meta-search providers I talk about so much in this blog.
Suddenly there is no reference to travel anywhere on the PriceGrabber site.
Three possibilities that I can think would cause this:
- Execution - That PriceGrabber were simply no good at executing travel. It is clear they do comparison shopping well and Greg assures me (and Gridskipper agreed) that the engine was a good one. But maybe they were no good at marketing or promotion of this particular product. No way to know;
- Brand - Could be that no matter how good you are at comparison shopping for "regular stuff" - electronics, clothing, music, books etc - the purchase of travel is too different a form of consumer behaviour to operate under the same brand. We know that Amazon's early efforts in online travel were a failure. We also know that large scale department store retailers have never been successful when trying travel. So maybe the brand of PriceGrabber just did not extend in the mind of consumers to travel; or
- Meta-search is tough - I like the concept of the the meta-search model and there are rumours of profits at Sidestep and Kayak but it is way too early to call this a proven market and model. At the core it about traffic arbitrage - buying in traffic at a cheaper rate than advertisers will pay for referrals. There is plenty of room for error in execution but also the potential that there is not a wide enough natural gap between the untargeted search costs of Google and the targeted charges that meta-search needs to levy to survive. I don't believe that- I think the model should and will work but if a big brand and company like PriceGrabber can't do it, we need to stop and think about the market as a whole.
Farewell PriceGrabber travel.