Thursday, October 25, 2007

SmartShopper Makes an Exit, Strengthens Zango



Yet another Israeli exit this week. SmartShopper, a browser based comparison shopping engine was acquired by WA based Zango.com for an estimated sum of ~$9M according to alarm:clock and Techcrunch.

A problematic buyer*
Zango has raised $40M from Spectrum Equity in 2004. It is notoriously known in the spyware business for its distribution of free games to MySpace users, that result in the installation of a spyware toolbar that requires user consent before the adware is installed. The toolbar belongs to Hotbar Inc., who is the was once the owner of Smart Shopper.

Zango states in its website that "Zango does not collect or share any information about you with anyone", but the company is entangled in several court challenges from privacy groups on its marketing tactics and policies. Services like McAfee Site Advisor
confirm the suspicion in their reports. User reviews show Zango as enabler of spam, spyware and even phishing attempts. It was even banned by the state of Alaska:
EULA Qoute:Special Notice for Residents of the State of Alaska, USA:

The Zango Software may be prohibited by Alaska law. Therefore, by installing or Using the Zango Software, you represent and warrant that your computer is not located in the state of Alaska. To the extent that our systems are able to recognize that your computer is located in the state of Alaska, we will not enable you to install the Zango Software.
*See disclaimer in update II below
SmartShopper deserves props
SmartShopper developed a neat technology that enables comparison of multiple shopping and travel sites in real time through a browser install. When you go shop online, SmartShopper identifies the exact product or service you are looking for, and intelligently appears in a separate browser pane with relevant alternative offers (If you want to try the service, watch the Smartshopper demo and click here to download). It claims to have over 10M users.

SmartShopper was lead by Oren Dobronsky, who spun it off from Hotbar in 2005. The company is based in New York and Tel Aviv with a head count of 10.
UPDATE I: alarm:clock gives the skinny on SmartShopper's buyout. In short, Zango payed $55M for Hotbar last June. Oren Dobronsky, who owned 10% of Hotbar Inc., bought out 100% of Smart Shopper from Zango for $250K and became the sole owner.

UPDATE II*: I received an email from Zango's PR manager today. So first, a quick disclaimer: I didn't download or install the products above and this post's information is based on publicly available sources on the web. Zango admits to have had problems with some distribution partners in the past, with emphasis on the past. They currently put great care into making sure that their products and distribution partners adhere to the Best Practices designed to protect consumers and business partners.

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