I poked at Jellyfish.com when it launched in the summer of 2006. It offered many of the same product-related search features you'd find on similar sites, like CNET Networks'
"Jellyfish is the ONLY shopping engine to directly share $ with you," explains the site. "As a Jellyfish member, you'll receive automatic savings on everything you buy. Think of us as a search engine for shopping, except we share at least half of every $1 we earn when you shop. I bet your search engine has never done that!"
In other words, the Jellyfish model is more in the mold of the free loyalty marketing program available through sites like United Online's
In Jellyfish's plan, users get a cut of any commission due to Jellyfish for the referral, in the form of a cash-back rebate the following month.
The myth behind money for nothing
Giving money away seems like a no-brainer way to draw an audience and lose venture-capital funding. In reality, it often fails on both fronts. IAC/InterActiveCorp's
Sure, it works sometimes. Electronic Arts
Then again, maybe Pogo and MP3.com were destined to be first-mover stars anyway. The carrots were either not necessary, or a brilliant tactic to keep penny-pinching rivals at bay.
When it comes to comparative shopping, the jury's still out on the carrot. Jellyfish has been around for nearly 16 months now and this is the first time the company has found its way into the Fool.com pages since my original article in June 2006.
"We think the technology has some interesting potential applications as we continue to invest heavily in shopping and commerce as a key component of Live Search," reads Microsoft's blogged explanation for the purchase.
So it's hard to say if the site will stay afloat in its current form or if it's going to be the technological backbone of something even bigger at Microsoft.
Shopping and searching should be buddies
Why can't Mr. Softy just run Jellyfish in its original form, using its marketing muscle to draw a bigger crowd? Well, it may appear to be a conflict of interest to non-Jellyfish sponsors who are active advertising clients for the company.
Shopping and search engines seem to be a match made in heaven, but keep in mind that Google bumped Froogle from its landing page last year, before going on to kill the brand altogether by renaming it Google Products. Yahoo!
Shopping and search aren't perfectly matched, interlocking puzzle pieces. I wouldn't be surprised to see the Jellyfish purchase morph into something else. A year from now, don't be surprised to find a MSN search product that rewards users with free Zune tunes, or a paid-search program where referred users get special pricing. Just because iWon hasn't won, that doesn't mean Microsoft's next buy will be iLost.
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Longtime Fool contributor Rick Munarriz is a fan of comparison-shopping, and comparing the actual sites. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy is its own reward.