Marketing Pilgrim's "Shopping" Channel

Sponsor Marketing Pilgrim's Shopping Channel today! Get in front of some of the most influential readers in the Internet and social media marketing industry. Contact us today!

Scripps Killing the Goose That Laid the Interactive Eggs?

image It appears Scripps–the 100+ year old media company–isn’t having the level of success with online media it had hoped.

Acquiring online comparison shopping site Shopzilla for $525 million in cash in 2005, Scripps indicated it expected great growth from the company. Unfortunately, it appears tougher competition and increased costs have thrown them of course and now Shopzilla is struggling, according to Portfolio.com.

Shopzilla’s revenue in the second quarter fell to $59 million this year from $65 million last year, and profits were down to $6.8 million compared with $16.5 million a year ago.

image Adding to Shopzilla’s woes are reduced referral revenue from the search engines and costs associated with management changes.

So, does this suggest dark days ahead for online comparison sites? Maybe not. Compare Scripps doom and gloom with ValueClick’s upbeat report.

ValueClick’s comparison shopping segment, which includes PriceRunner.com and Smarter.com, generated $8.2 million in revenue in the second quarter of 2007, up 37 percent from the second quarter of 2006.

ValueClick does admit that a strong European market helped lift its business, but Scripps uSwitch.com is UK focused, and that didn’t help them much.

Could it be that online media companies are simply better at running, erm, well, online media companies? Scripps certainly has a diversified portfolio of media companies, but ValueClick is all about interactive–they know the business intimately. Perhaps this statement from Scripps is revealing:

“Follow the eyeballs, follow the money,” said Scripps President and Chief Executive Kenneth Lowe.

Hmm, isn’t that like a city-slicker buying the goose that lays the golden eggs, and assuming he can care for the goose as well as the farmer? Maybe Scripps should have watched Green Acres before deciding they could easily run the interactive farm. ;-)

  • http://www.xuru.com Jeremy Luebke

    I think Shopzilla is making moves in the right direction to change the tide. Their publisher / affiliate program is hands down better than Shopping.com’s program which would be what I considered the leader in CSE affiliate programs. Not only is Shopzilla’s program better now, but they not to long ago released their API to general affiliates which should help boost revenue as smaller arbitrage players step up and crank out the mini shopping sites.

    Time will tell.

  • http://dmehus.wordpress.com/ Doug Mehus

    I agree with Jeremy. I hope it’s just a seasonal thing for Shopzilla, as I much prefer BizRate over Shopping.com, NexTag, PriceRunner, and related ilk. Perhaps it’s a branding issue? BizRate was hugely success pre-name change to Shopzilla. Perhaps they should rebrand the company around BizRate? I know I’ve filled out several customer satisfaction surveys BizRate sent me by e-mail after purchasing from OfficeDepot.ca, so their partnerships with retailers business definitely is doing something right.

    For what it’s worth…

    My two cents,
    Doug