Updated: The media/newspaper/TV company E. W. Scripps is buying out comparison shopping engine Shopzilla, for $525 million in cash. Besides the comparison engine, Shopzilla also owns and operates BizRate, the popular consumer feedback site. The company’s technology powers the shopping search on sites such as AOL, Lycos, Time Warner’s RoadRunner, and many others.
Shopzilla is expected to generate $30 million to $33 million in segment profit on revenue of $130 million to $140 million for the full year 2005.
Shopzilla’s direct competitors include Shopping.com, NexTag, PriceGrabber.com and CNET (MySimon.com). Less direct competitors include Froogle and Yahoo Shopping…
Scripp’s official reasoning for the buy: “Scripps views Web product search – and Shopzilla in particular — as a valuable combination of content and commerce that brings merchants and consumers together, literally, at the point of purchase.”
Staci adds: This might seem like an odd move for some content companies but not for Scripps, which is bent on maximizing the commercial potential of its cable nets, web sites and broadband channels. It reminds me, in a sense, of NYTCO’s purchase of About.com. In one move, Scripps becomes a player in the search sector (Shopzilla will be a separate reporting entity within the company), gains a significant traffic engine, and adds another e-commerce edge. Scripps just rolled out Living.com ,a glossy broadband site with sponsorships and product placements.
A possible problem area: advertisers could turn out to be less than thrilled that Scripps also offers services that criticize and rate their products.
Comparison Engines: Interview with Farhad Mohit, Shopzilla founder: “Content and commerce are king. Scripps has the content, Shopzilla has the commerce. Also, Shopzilla is good at online marketing — search engine marketing, search engine optimization — while Scripps is great offline where they have a broad reach of 90m homes.”
Related: Scripps Broadband “Living” Debuts
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