CNet reports on the latest purchase of a shopping search engine for over $500M.

Why is shopping comparison worth so much? Good question - because when Google gets its act together with Froogle, the recent purchases of Shopping.com and ShopZilla aren't going to look as attractive.

Shopping sites offer a way to simplify online advertising for retailers. Instead of creating ad campaigns around keywords, you advertise based on products.

In other words, you don't need to spend a ton of time making up keywords. When someone is searching for "Oster Mixer", you simply pay to become the featured result, and you get traffic to your site. That's a simpler model for many online retailers.

This paid-inclusion occurs today, of course, primarily with digital cameras and electronics price comparison sites. When Google turns it on, it will become a new ballgame for all the shopping sites out there, though.

PS. If Shopping.com and ShopZilla are worth over $500M, I wonder what NexTag will be priced at? $2-3B?

¶ 6/07/2005