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Daily Mail (LSE: DMGT) publisher DMGT is closing down its SimplySwitch price comparison site just 14 months after it acquired it for up to £22 million. Associated New Media MD Andrew Hart (via Times): “Last year saw a sudden and unexpected fall in the energy price comparison market. Despite the best efforts of the SimplySwitch team, it is with considerable regret that we are entering into a collective consultation process with employees.” This is curious both because the number of price comparison sites is proliferating (several are making big bucks) and because spiraling domestic energy costs are likely to prompt higher use of such sites as customers seek better deals.
The real reason, The Times says: “The site did not have enough traffic to generate profits”. SimplySwitch turned in a £500,000 profit in the year before DMGT bought it for £16.5 million up front in cash, and made £1.2 million in the subsequent year. The services price comparison sector has been swamped with the likes of Scripps-owned bigger rival uSwitch and Moneysupermarket, while DMGT tries to turn a profit on its portfolio of classifieds sites. SimplySwitch’s 65 employees may now be made redundant.