ValueClick discusses comparison shopping (1Q05 conf call quotes)

ValueClick (ticker: VCLK) CEO Jim Zarley discussed PriceRunner, the European comparison shopping business his company acquired. Standard & Poor's Equity Research analyst Scott Kessler asked Mr Zarley how PriceRunner would be differentiated from the competition once it enters the U.S. market. Here's Mr Zarley's response, and a couple of quick questions:

Here in the U.S., we realize that we're behind the game… but certainly in Europe we are not. One of the differentiators when we looked at Pricerunner was the amount of organic traffic that they were able to build inside their organization, and end up with a much higher gross margin business because of the user experience primarily… In Sweden, they had like 90% organic traffic [growth]. And when we looked at why… we found that primarily because they put an enormous amount of content, which allows people who are doing comparison shopping to really see where all of the products are and who has the very best price… When we decided to bring it here -- that's one of the things that we were focusing on right now -- we have an awful lot of people that are focusing on building content into that site that makes the user experience a much better one. What we're counting on is that over time, people will bookmark it and it will become more of a destination site that has much higher margin.

(Quotes are from the CCBN StreetEvents transcript.)

Quick questions:

• Compare PriceRunner's UK web site to Shopping.com's UK web site (Dealtime). Do you notice any difference in user experience in PriceRunner's favor that would lead to higher organic traffic growth?
• What's the probability that the PriceRunner team could build a U.S. comparison shopping site with out-of-the-gate content that is richer than Froogle, Shopping.com, Yahoo Shopping, Shopzilla, NexTag and PriceGrabber?

VCLK chart below.

Full disclosure: at the time of writing I'm short VCLK, long SHOP.

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