Yahoo Outsources 'Shopping' to PriceGrabber

Yahoo's cost cutting efforts have made another victim. The company has decided to outsource Yahoo Shopping and all the results will now be provided by PriceGrabber. Yahoo is not making too much fuss about it and announced indirectly along with the closure of the Yahoo Shopping API. This latter part isn't going to sit well with developers using the API as PriceGrabber doesn't offer a free alternative.

"After careful consideration, we have decided to enter into a strategic partnership with PriceGrabber to power the Product Submit functionality of Yahoo! Shopping as of March 11, 2010. As a result of these changes, Yahoo! will no longer provide the Shopping Web Services API, including Shopping Results (the “Yahoo! Shopping Syndication Services”) to you as of March 11, 2010," Yahoo announced on its developers blog.

This is a significant move from Yahoo, even though it's apparently looking to downplay it, and could be a sign of larger trend at the company. Yahoo Shopping is one of the largest shopping sites in the US, significantly larger than PriceGrabber in fact. Technically, the partnership means that PriceGrabber will be providing all product and price results for the service and all revenue coming from those will be split with Yahoo. However, all the ad revenue from the site itself will go to Yahoo.

An interesting detail is that the search ads on the site will actually be coming from Bing, thanks to the much larger outsourcing deal Yahoo is working on with Microsoft. The major outlines of the Bing deal are very similar to the one with PriceGrabber, but the size of the former makes it a lot more complicated, which is why it hasn't been finalized yet. Some now believe that Yahoo may continue this trend and will also outsource other product it currently runs to third parties.

In any case, the API users are now left with very few choices. Yahoo directs them to PriceGrabbers similar APIs, but notes that those aren't free like the former Yahoo ones. "If you wish to continue to display syndicated shopping results for products listed on Yahoo! Shopping, you must apply to PriceGrabber for shopping syndication services... [T]hey do not offer a free web services API," Yahoo added.