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The Daily Telegraph, Thursday December 15th, 2005
(c) 2005 Telegraph Group Limited, London

HOW much longer can GUS put off doing the splits? The acquisition of PriceGrabber.com and Tuesday's demerger of its stake in Burberry make the company look like an internet group, with an inconvenient bit of retail tacked on the side. It looks like a sensible deal, beefing up GUS's Experian information arm ahead of next year's planned demerger and taking it into a fast-growing area. The kind of dotcom success story the 1999 hype was all about, PriceGrabber was set up just six years ago but last month helped 17m internet shoppers find the cheapest price at one of 9,000 retailers.
Paying $485m for just $25m of profits looks steep. But the market for price comparison services is still immature and there's plenty of scope for expansion. Eye-opening forecast growth of 40pc a year for the next five years looks plausible.
The margins are stunning too. Those $25m of profits were struck from $60m of sales and the return is only likely to widen as the top line forges ahead.
All three of the biggest price comparison sites in the US have now changed hands this year, with Ebay snapping up Shopping.com for $620m and publisher EW Scripps paying $525m for Shopzilla.com. If PriceGrabber was pricey, it was no more so than these, and on some measures a better deal. You can see why price comparison is growing so fast.
The fragmentation of traditional media means retailers find it increasingly difficult to reach their target market. Advertisers used to accept grudgingly that half of their budget was wasted (they just didn't know which half); these days they'd gladly accept those odds. Pay per referral advertising like PriceGrabber's provides a much better bang for their marketing buck.
For consumers, too, there's an obvious benefit. It's been estimated that shoppers save up to 20pc on average by using online price comparisons. That has profound implications for retailers' pricing power but as a consumer, who's complaining?
The argument for keeping Experian under the same roof as Argos and Homebase looks hard to justify now. The market will value Experian at around 20 times earnings on its own. It's time to set it free.