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Yahoo! is to buy Kelkoo, Europe's biggest online comparison shopping service, for €475m cash.

The company says the lead referral model used by the French-owned business complements its own paid-for search business, Overture. Indeed. Kelkoo currently runs text ads supplied by Google, which in turn supplanted eSpotting, the British business shortly to be acquired by FindWhat.com.

Kelkoo will also bolster Yahoo!'s European ops, increasing its reach by "introducing millions of new users to Yahoo! Europe's network".

Terry Semel, Yahoo! CEO, said: "Commerce has emerged as a key component of search, and the combination of Web search, product search and comparison shopping will help further Yahoo!'s goal to create the most comprehensive and best user experience on the Web globally."

Kelkoo is Europe's biggest native ecommerce service, according to Forrester Research. It has operations in nine European countries and commands 10 per cent reach of Europe's Internet population. It has signed up 2,500 merchants flogging books, films, music, games and consoles, mobile phones, travel, computing, consumer electronics, fashion and cars. They pay Kelkoo for lead referrals.

Kelkoo also has a white label business, providing its service to other brands under their own colours. ®

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