• by Shankar Gupta , September 29, 2006

IAC this week officially entered the crowded comparison shopping space with the launch of shopping search engine Pronto.com.

The site will compete with a host of established offerings including MSN Shopping, Yahoo Shopping, PriceGrabber.com, Shopzilla.com, and Pricerunner.com. But, unlike many shopping search engines, Pronto offers a cost-per-action ad model, which involves taking a share of revenue generated by sales, in addition to a standard pay-per-click pricing.

Pronto's Chief Operating Officer John Foley called the ad model a "hybrid" of cost-per-click and revenue share, saying that merchants advertise their top products on a pay-per-click basis, while choosing a cost-per-action or cost-per-click basis for other, less profitable merchandise.

But even the cost-per-action model might not get Pronto.com very far in the crowded comparison shopping field--at least not without additional help from IAC, said Greg Sterling, principal of Sterling Marketing Intelligence. "If they can leverage other IAC properties or arbitrage for traffic, they have a chance," he said. Otherwise, he said, the service isn't likely to rival more established players.

Pronto.com originally launched in January 2006 as a downloadable shopping browser add-on, and then quietly rolled out three months ago in a soft beta test.