Google enters e-shopping, launches Froogle

Adam Pasick

NEW YORK: Froogle, the new online shopping site from Google searches for any product online and helps the users choose what to buy. It is the latest in a series of brand extensions for privately-held Google, which recently launched its own news site that links to news sources from the New York Times to the New Zealand Herald.

Like the Google search engine, Froogle accepts paid advertisements that are displayed next to the search results, which cannot be bought. The site does not sell anything directly; Froogle merely provides the link to merchant sites, drawing from its vast database of Web pages.

For example, searching Froogle for "Electric Circus," a new album by the hip-hop artist Common, returns dozens of links to merchant sites, along with photos of the CD, with the cheapest price at retailer Best Buy. There are two ways for merchants to be included in Froogle, said Google spokeswoman Eileen Rodriguez: their sites can be visited by the Google "bot," a software program that collects Web site information, or the merchants can give Froogle a direct data feed from their sites.

At ‘big risk’ with Yahoo

Mountain View, California-based Google's entry into the online shopping sector could potentially give the company another revenue stream, analysts said. It currently pulls in money from ads, which are sold by the keyword through an auction process, as well as licensing its search technology to companies like Yahoo and AOL Time Warner's America Online.

"It's encouraging on Google's behalf that they're being creative on how to monetize their site," said Salomon Smith Barney analyst Lanny Baker. The expansion by the increasingly popular Google -- a recent Newsweek magazine article called the site the "high-tech version of the Oracle of Delphi" -- could jeopardize its relationship with Web portals like Yahoo if it is seen as a competitor, rather than a supplier.

Google and Yahoo are currently running neck and neck for the most search engines referrals to online commerce sites, followed by Microsoft's MSN and AOL, according to research firm WebSideStory. If Froogle catches on, it could give Google a commanding lead.

"Google is already at big risk vis a vis Yahoo because they've fairly quietly walked away with a pretty big slice of search activity, and search is one of Yahoo's most promising and profitable areas," said Baker. Google spokeswoman Rodriguez said the company has "a good relationship with all of our customers, including Yahoo," and that Froogle was developed "to connect people with the information they're searching for."

"Our users ... told us they were looking for better way to find products online," she said. In direct competition with Froogle are comparison shopping sites like MySimon and BizRate. But the ever-friendly Froogle provides a link to those sites, as well as Amazon.com and eBay, at the bottom of each page of search results.

© Reuters