January 1, 2011, 12:00 AM

Market America goes shopping and buys Shop.com, aiming for $1 billion in web sales

With Shop.com in its basket, Market America is out to build an online retail presence that combines Shop.com’s e-commerce technology with its new parent’s personalized and social shopping model.

By combining its personalized and social shopping model with the comparison shopping model of Shop.com, Market America expects to build a $1 billion-plus e-commerce business, Market America CEO James Ridinger says.

Market America, No. 54 in the Internet Retailer Top 500 Guide, acquired Shop.com for an undisclosed amount last month. Under the terms of the deal, which was expected to close by the end of last month, Shop.com will continue to operate as a separate web site. “This unique strategy positions us for explosive growth and to compete head-to-head with the biggest, most dominant shopping sites on the Internet,” Ridinger says.

Market America, which generated web sales of $321.3 million in 2009, is acquiring Shop.com for its search and OneCart checkout technology and for its base of 2,000 affiliated merchants. “By bringing our companies together, we are creating a game-changing shopping experience with transformative potential to our customers, retailers, consumer brands and business partners,” says Shop.com CEO Ken Goldstein, who was expected to depart as CEO and become a strategic advisor to Market America.

Market America also is making the acquisition to apply its personalized merchandising strategy to Shop.com’s broad base of well-known retailers such as Best Buy Co., Buy.com, Cooking.com, Gap, Macy’s and Barnes & Noble. Market America awards customers 2% back on all purchases made on MarketAmerica.com and its sister sites. The cash-back offer is good on purchases of more than 35 million products available on MarketAmerica.com, including Market America’s own branded products and items offered on the site by thousands of partner retailers.

Shop.com is among the last of the original shopping comparison sites to merge or be acquired. In June 2005 E.W. Scripps Co. paid $525 million in cash to acquire Shopzilla Inc.; eBay bought Shopping.com in August 2005 for $620 million; Experian acquired PriceGrabber for $485 million in December 2005; and venture capital firm Providence Equity Partners acquired a two-thirds stake in NexTag in June 2007 for $830 million.

mark@verticalwebmedia.com

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