New York Times, March 12, 2003
Dealtime Agrees to Buy Epinions

Dealtime, one of the largest Web sites that lets users compare prices on
items offered for sale online, has agreed to buy Epinions, a Web site that
lets users write and read reviews about what products to buy.
Both companies have substantially scaled back their ambitions since the
dot-com boom, but each says it became profitable last year.

Dealtime, a New York company based on technology developed in Israel, had
filed to go public in early 2000 but never completed the offering. Epinions,
which was formed in Silicon Valley by a group of former Yahoo employees, attracted a lot of media attention for its concept of paying a share of its revenue from
advertising to people who wrote reviews.

Epinions did attract 1 million reviews but very little advertising revenue.
Dealtime, by contrast, found there was a viable business in charging online
stores for each potential buyer it referred to their sites. And it became
the largest comparison shopping site, pulling ahead of rivals like, by cutting deals to become the shopping channel of other sites
like Lycos and Excite.

Nielsen/NetRatings estimates that in January, Dealtime had 9.4 million
users, BizRate had 6.3 million users, and Epinions had 5.8 million users.
Combined, Dealtime and Epinions would have had 13 million users, excluding
duplicate users, making it the fifth-biggest shopping site after Amazon, EBay, Yahoo Shopping and MSN Shopping.

Over the last year, Epinions tried to add comparison shopping as it searched
for a source of revenue. Dealtime, conversely, added user reviews in an
effort to become more of a full-service shopping site. Both efforts proved
more distracting than effective, and the two companies, which had engaged in
talks on and off for years, finally decided to merge.
"We felt we couldn't finish what we started because we had a little
problem," said Nirav Tolia, Epinions' chief executive. "We needed a viable
business model."

Mr. Tolia will be chief operating officer of the combined company, which
will be based in New York. Dan Ciporin, Dealtime's chief executive, will
retain that role.

Venture capitalists had invested $117 million in Dealtime and $45 million in
Epinions. Last year Dealtime's revenue was $30 million. Epinions revenue is
not disclosed but was a small fraction of that.

Dealtime is acquiring Epinions for stock, but the terms were not disclosed.
In recent months, some of Dealtime's backers had hoped to revive its initial
offering plans. They hoped to ride a wave of enthusiasm created by an
initial offering of Google, the big search engine, which is expected to go
public sometime later this year. Dealtime, they figured, could position
itself as the Google of shopping. Indeed, the company has quietly purchased
the Web address from CMGI's Alta Vista and used it for a
version of its service with spare graphics that is meant to look like
Google's site.

But analysts say that Google may shape up to be more of a rival. It is
testing Froogle, its version of a comparison shopping site.
"There is a role for a middleman that provides trusted content and links to
online stores," said Carrie Johnson, an analyst with Forrester Research.
"But Google is going to be a powerful player with Froogle. They have more money behind them and many more visitors to their site."

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