Comparison shopping has been in the news lately. General consumer sites, Shopping.com and Shopzilla (formerly BizRate), and financial services specialist LowerMyBills.com, were purchased this year for a combined total of $1.5 billion (source WSJ, 9/14/05). And of course, Google entered the fray last year with its Froogle service.

• Experian bought LowerMyBills for $330 million
• Ebay bought Shopping.com for $620 million
• E.W. Scripps bought Shopzilla for $525 million

Consumers like the shopping comparisons, with 60% of Internet users having used one according to Jupiter Research. The popularity, and merger activity, will attract more entrants such as Become.com, each looking for a new angle.

One new twist is to add value through shopping guarantees. BuySafe recently launched an online marketplace <www.buysafeshopping.com> where users can choose from 1.5 million products covered by the $25,000 BuySafe guarantee. Merchants pay for the protection with a 1% transaction fee.

One area that has seen relatively little activity considering its popularity with online users is financial services. For one thing, financial services, especially loan products are more difficult to compare, because the credit quality of the applicant determines which products are appropriate.

We expect more financial comparison sites to join the ranks of BankRate.com, FISN.com, Banx.com and others. The mainstream shopping comparison sites will also add financial services to their coverage. Already Shopping.com, PriceGrabber.com and others have mortgage comparison services (click on inset for closeup). We’ll look at these service in more detail next month in Online Banking Report.

For price leaders, these sites have the potential to be wonderful sources of qualified leads. But if you are a premium-priced provider, you’ll have to work that much harder to keep your share.

—JB