Yahoo! buys shop site Kelkoo for £318m

Yahoo!, the internet search engine, yesterday announced the €475m (£318m) acquisition of Kelkoo, the European online comparison shopping service.

Yahoo!, the internet search engine, yesterday announced the €475m (£318m) acquisition of Kelkoo, the European online comparison shopping service.

The deal is an echo of the dot.com boom of the late 1990s when internet companies were changing hands almost weekly at hugely inflated prices.

However, yesterday's dot.com transaction comes against a backdrop of much more modest valuations even though many of the surviving internet operations are moving into profit.

Yahoo! has been expanding aggressively in recent years in search-related online marketing services. Websites offering consumers the chance to search for specific items and find the best deal have become a valuable medium for advertisers. Many are willing to pay fees to make sure links to their company's websites appear alongside or at the top of internet search results.

Kelkoo operates a product search technology and shopping comparison services designed to find consumers the best deal on a range of products and services. It has sites operating in the UK and nine other European countries including France, Germany and Italy.

Terry Semel, the chairman and chief executive of Yahoo!, said: "Kelkoo will add depth and breadth to Yahoo!'s integrated network of services for consumers and adds another set of powerful tools for people in marketing seeking to reach them."

Yahoo! has been a growing presence in the online commercial search area, and the Kelkoo acquisition will make it one of the world's leading providers of search solutions to advertisers wanting to reach the growing number of people who shop and search online. Its search-related online marketing services are run through a subsidiary called Overture Services.

Competition in this area is fierce with companies such as Google also fighting to dominate the market.

"Commerce has emerged as a key component of search and the combination of web search, product search and comparison shopping will help further Yahoo!'s goal to create the most comprehensive and best user experience on the web globally," said Mr Semel.

Kelkoo was launched in France in November 1999.