Earlier this month ebay announced they had purchased Occipital’s Red Laser iPhone application. According to our sources, ebay paid $10 million dollars for the application and it’s 2 million users. The deal was an asset sale and the Occipital team will not be joining ebay. We are working on several potential deals and the sale of Red Laser for $10M has caused more than a few people have asked why we think ShopSavvy would be worth MORE than Red Laser. I thought it might make some sense to put ShopSavvy and Red Laser in context now that a price has been set.

Red Laser was very similar to ShopSavvy in that it allowed a user to scan a barcode, but instead of building their own backend product inventory and pricing platform they leveraged comparison pricing data from The Find and Google. Most of the ShopSavvy development is focused around what we call ‘PriceNark’ – our system for delivering local and online inventory and pricing from retailers to ShopSavvy. In 2008 we purchased the assets of a text book price comparison website called Textbook Trader which formed the basis of our price comparison platform. PriceNark allows us to deliver direct feeds from retailers, feeds from third party aggregators and web scraping with shopping cart insertion. Here is a side-by-side comparison:

Red Laser v.               ShopSavvy
iPhone Only                  iPhone and Android
2,000,000 users          5,000,000+ users
-                                       AdOn Advertising Network
-                                       PriceNark Backend 20K+ Retailers
-                                       Dedicated and Passionate Team

How do we feel about the $10 million ‘comp’? To be honest we were pretty pumped when we learned about the deal. Based on a simple ‘per user’ valuation of $5/user ShopSavvy is easily worth $25,000,000. But I would argue that our backend system is every bit as powerful and valuable as a local comparison engine like Milo.com (valued at $15M+). Additionally our advertising network not only includes ShopSavvy installs, but also PriceGrabber, CBS Interactive/CNET and more than 100 licensees leveraging our barcode scanner SDK and AdOn framework. By the end of the summer we expect more than 10,000,000 mobile phones will run our advertising framework. At the end of the day we think the Red Laser/ebay deal is a very positive comparable especially when you take into account our user advantage, local/online shopping engine and advertising network.