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.