It’s really quite something: Of all the cable players, you’d think home-heavy Scripps Networks Interactive (NYSE: SNI) (parent of HGTV and Food Network, among others) would be the most exposed to the housing meltdown. But CEO Kenneth Lowe insists things are holding up; at the Goldman Sachs Communacopia conference, he acknowledged some spotty weakness here and there, but nothing to suggest that the floor was falling out of the business: “We really haven’t seen any endemic softening with respect to HGTV or Food.” He did suggest that certain advertisers, like a Home Depot, might be pulling up. But his basic line was that strong brands and continued solid ratings are keeping things afloat.
— Sale?: For the nth time, says Lowe, the separation of Scripps Interactive from EW Scripps (NYSE: SSP) is not meant to be a precursor to a sale: “It’s not surprising that there’s a lot of speculation out there… there seems to be a rumor every day.” He then said he was “flattered” by all the rumors, a term he’s used before. Basically, nothing new — as you’d expect.
— Acquisitions: Again, nothing too new… There’s nothing out there on the networks front that looks interesting, though they may do some tuck-in food and home acquisitions like Recipezaar (very similar to what’s been said in the past.)
— Shopzilla: CFO Joe Necastro discussed the health of the company’s comparison shopping engine, and acknowledged that the Google arb is getting squeezed. Basically, it’s getting harder to buy keywords and important terms at good prices from Google, and on the other side, Google is taking more and more of the link revenue. Scipps is currently renegotiating its deal with Google, soon to expire, and as Necastro put it: “The arbitrage portion of the business is threatened.” The solution? Shopzilla needs to become a real destination that people want to go to: “The future of that business is enhancing that site so that it ranks better… and that means more content, more community aspects of it, more appealing so that you want to go back to it.” There’s a lot of meat here to chew on for future discussions about the growing power of Google (NSDQ: GOOG). Some might see, in its ability to command a higher cut of link ads, a growing monopoly. On the other hand, if the upshot is that a site like Shopzilla needs to become a real destination, not just an arbitrage play, that looks like the market doing its job.