Mountain View, California — In an attempt to expanded its reach into the UK market still further, Mountain View, Calif.-based search engine made a rare UK acquisition, paying £37.7m for “BeatThatQuote” a British website for comparing prices of insurance, utilities and legal services, the companies said Tuesday.
News of the deal was officially announced by BeatThat.Quote.com managing director John Paleomylites on the company’s website, and the buyout of £37.7 million ($61.3 million) heralds the second eight-figure fortune for the company’s founder John Paleomylites.
The former fastest-growing website of the year enabled users to compare prices and premiums for a range of financial services, including car and home insurance, energy tariffs, credit cards and mortgages, and runs an extensive affiliate marketing program on behalf of leading financial companies, insurers and utility providers.
BeatThatQuote, a smaller rival to sites such as Go Compare and Compare the Market, was established in 2005 and its most recent available accounts report an annual loss of £2m on an £8.5m turnover.
Surprisingly, the search engine giant’s cash will mainly go to Paleomylites, a serial entrepreneur from north London, who owns around 90% of shares in the company prior to its acquisition by Google.
“Our team is excited about becoming a part of Google. We look forward to working with their engineers to create new tools making it easier for consumers to choose the right financial products. We think we can offer more transparency and better pricing information than existing online offerings,” said Paleomylites.
“We are convinced that by combining BeatThatQuote.com’s expertise in UK financial products with Google’s technology, we will accelerate innovation in this field, benefiting consumers and the companies offering these products. We plan to keep working with our current partners and look forward to working with new ones, too.”
Paleomylites used to run Internet security company JCP, which was set up in 1995 and originally financed using his credit card. He disposed of it to Sun Microsystems in 2000 for £40 million, netting him an estimated £10 million, according to the Sunday Times rich list.
His latest deal further broadens Google’s reach into so-called “vertical” search markets. In recent years it has diversified to offer not only general web search, but also specialized price comparison and shopping search.
Currently, Google ventures on to amplify its engagement in price comparison products — it already operates a service called Comparison Ads in the US and has some restricted offerings in the UK focused on credit cards and insurance. Google plans to utilize Beatthatquote’s technology to provide new ways for consumers to find the right financial products, it said.
However, Price comparison services are now growing into a crowded specialty with many competitors, with the dominant ones in the U.K. including moneysupermarket.com and moneysavingexpert.com.
Although BeatThatQuote is not considered to be a market leader, Google is understood to be eager to run the business as a independent brand at first, gradually building up its marketing and distribution power through increasing tie-ups with the search engine itself.
Beatthatquote makes its money by taking a commission from vendors to whom it refers the people who search on the site.
Google also considers that the price comparison market should be uncomplicated — and that existing competitors are either too complex, requiring consumers to make too many clicks, or bombard customers with email marketing. However, there are no plans to expand the company internationally.
The potential for Google to use its dominance of general search — in Europe it has more than 90% market share — to push its way into vertical search is now the subject of regulatory investigations on both sides of the Atlantic.
Moreover, the deal raises questions about the future of such services offered by Google’s rivals Yahoo and MSN, as both currently offer comparison facilities which are powered by BeatThatQuote.
The EU antitrust officials are examining a complaint by Foundem, another British price comparison service, that Google “is exploiting its dominance of search in ways that stifle innovation, suppress competition, and erode consumer choice”.
Meanwhile the US Department of Justice is in negotiations with Google over its attempted $700m acquisition of ITA, a leading flight search service.