January 21, 2004

Internet search engine Google will sell advertisements on European price comparison site Kelkoo.

Google will provide "contextual" ads to the shopping site (http://www.kelkoo.com), so that small text ads are automatically generated to match the product or service a user is looking for.

Privately held Google, which is planning a highly anticipated initial public offering, according to people familiar with the situation, has its own shopping site, called Froogle (http://www.froogle.com), which is seen as a potential competitor to Kelkoo.

But the deal announced on Wednesday suggests the company is taking it slowly with Froogle in Europe. Froogle currently pulls in price information from sites with the ".com" suffix, which are mostly in the United States.

"The company has nothing to announce with regard to Froogle, which is still a product in beta form in the U.S.," a Google spokeswoman said.

Google has expanded rapidly in Europe by signing advertising deals with publishers and establishing ad sales staff in seven countries.

It has had few qualms in the past about competing with its business partners. Products like Froogle and Google News have shifted Google from a pure search engine toward a one-stop shop for Web content, a niche dominated by its customer Yahoo.

Kelkoo has 27 million monthly European users, making it the third-largest European e-commerce site after Amazon (AMZN.O: Quote, Profile, Research) and eBay (EBAY.O: Quote, Profile, Research) , according to measurement firm Nielsen NetRatings.

Google places ads from 150,000 worldwide advertisers through its AdWords program, ranging from small shops to large corporations.

Source: Reuters

        

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