Google Gets Froogle with UK Shoppers

Google took its first bite out of the European commercial market in Great Britain yesterday, launching a beta version of Froogle, an Internet price-comparison service for British shoppers which closely resembles Google’s home page.

Shoppers search for products and are shown photos, prices and links to vendors. Results can be sorted by price or within user-defined price ranges. Online shopping is already popular in the country; the BBC estimates that 10 percent of all British shopping will be done online this year, amounting to 17 billion pounds sterling, or more than US$30 billion.

Froogle UK doesn’t accept payment from sellers; instead, it charges for advertising related to searches. Product data are supplied by participating merchants. A broad range of products is listed, from wool shirts to laptop computers to balsamic vinegar.

International Expansion

The U.K. is the first country outside of the U.S. to get Froogle.

Cosmos Nicolaou, engineering director for Google, indicated in a statement that the intro is part of the company’s plan to actively pursue overseas expansion. “As Google continues to explore opportunities to bring more of the world’s information to users in more countries and more languages, Froogle UK enables us to provide the UK market with the tools they need for a better online shopping experience today and through the upcoming holiday season,” he said.

The company foretold plans to grow its business overseas in a prospectus filed with the Securities and Exchange Commission before Google’s $1.67 billion IPO in August. The filing stated, “Expansion into international markets is important to our long-term success, and our inexperience in the operation of our business outside the U.S. increases the risk that our international expansion efforts will not be successful.”

“If we fail to compete effectively…our business will be harmed,” the statement continued.

Gradual Rollout

Froogle may be in for somewhat of a gradual rollout in Europe. One of Froogle’s major advertisers is a competitor and a stablemate, Kelkoo, which Yahoo! acquired earlier this year for 475 million euros, or approximately $586 million. Paris-based Kelkoo is one of Europe’s fastest-growing e-commerce search sites.

Google has a tradition of close relations with competitors. In the U.S., it considers and Yahoo shopping services to be retail partners. Google has said it plans to expand Froogle into France and Germany eventually, but it does not plan to challenge Kelkoo.

Market Leader

Analysts have expressed confidence in the company’s strategy as well as its competence.

Mary Meeker and Brian Pitz of Morgan Stanley said in a recent report, “Google has helped change the direction of the Internet and has built impressive market share and an especially strong business model. We believe Google should continue to help pace the growth in the still early-stage online search market and benefit from related revenue growth.”

Morgan Stanley was lead underwriter for Google’s IPO.

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