Comparison shopping can be a nice little money-maker — but it may be even more powerful as a lead generator for other businesses, as two recent deals show.
On Monday, the E. W. Scripps Company said it would buy Shopzilla. The deal follows word last week that eBay
had bagged Shopping.com, a similar service.
Scripps’ move also follows a broader trend of traditional media companies snapping up online properties, including the New York Times buying About.com.
Scripps will pay $525 million in cash for Shopzilla, where shoppers can perform keyword searches and get results from any of 55,000 retailers. The company also operates BizRate, a consumer-to-consumer product rating service. According to comScore Media Metrix, Shopzilla ranked 41st in traffic for April, with nearly 14 million unique visitors.
Shopzilla stands to earn $30 million to $33 million profit in 2005, on revenue of $130 million to $140 million. It makes the majority of its money from collecting a fee from participating online retailers whenever it sends a consumer to their online stores.
Scripps is a media company with fingers in broadcast and cable television, newspapers and the Internet. It operates Web sites for several of its TV networks, including FoodNetwork.com, HGTV.com, DIYNetwork.com and ShopatHomeTV.com, as well as sites for the company’s local newspapers and broadcast television stations.
On June 2, eBay said it would buy Shopping.com, a similar comparison shopping service with a $620 million cash price tag. EBay said it would integrate listings from its online marketplace into Shopping.com’s search results, giving sellers potential exposure to a new audience of buyers.
Shopzilla uses a proprietary algorithm called ShopRank to determine which of the approximately 31 million products in its index best suits the search. It provides shopping search technology to other sites, including Time Warner’s RoadRunner, AOL and Lycos.
But executives said that Scripps wouldn’t integrate Shopzilla with Shop at Home, a broadcast, cable and satellite television shopping service it bought in 2002. Consumers also can browse and buy at ShopatHometv.com, where items are featured within categories. But Shopzilla’s comparison shopping engine could be useful to other Scripps properties, they said, for example, in enhancing cable network Web sites.
Pamela Parker of ClickZ contributed to this story.
