IAC/InterActiveCorp Dips Toe in Comparison Shopping Waters

Barry Diller’s IAC/InterActiveCorp has dipped its toes into the crowded comparison-shopping space with the launch of a beta search engine featuring 50,000 merchants hawking 45 million products.

The new site at Pronto.com is stealing a page from Google’s playbook with a minimalist, ad-free homepage serving up a mix of results from paid sponsors and other merchants.

“The market is crowded but we don’t think it’s saturated,” says John Foley, chief operating officer of the New York-based IAC subsidiary. “We think we’re in the first inning of product search in the Web. There’s a lot of game left to be played.”

Foley is betting that Pronto.com’s “comprehensive results” will give it a competitive advantage over more entrenched rivals like BizRate, DealTime, Kelkoo, mySimon, NexTag and PriceGrabber.com.

Search engine heavyweights Google, Yahoo, MSN and IAC’s own Ask.com also offer standalone comparison shopping sites but Foley is optimistic there’s room for a new player.

The 30-employee firm is using patent-pending technology to scrape the Web for product listings to serve up alongside thousands of paid results, much like Google does with sponsored links that appear atop generic search queries.

“All of our competitors are going with paying advertisers. Our model is more like Google’s approach. We have organic listings, then paid listings. We’ll work with merchant partners to promote inventory in contextually relevant places but we’ll also use our technology to display products from non-paying merchants. That will give us a big edge,” Foley said in an interview with ClickZ News.

The company is also offering a downloadable browser tool called Pronto Shopping Messenger that allows surfers get real-time messages about products they are viewing on Web sites. The tool, which is available for Internet Explorer and as a Firefox extension, can trigger instant alert notifications about price drops and alternative product selections available across the Web.

According to Foley, Pronto.com’s long term plan is to use the power of IAC’s network of high-traffic sites to make the site the starting point for product searches. “We did our research with focus groups and found that most people still start searching for products on the big search engine, then they end up on the comparison-shopping sites. We think we can build a better mousetrap by having a bigger, more comprehensive index,” he added.

IAC’s portfolio of sites include Ask.com, Gifts.com, Match.com, Citysearch, Evite, Ticketmaster and LendingTree.