Print Publisher Buys U.K. Price-Comparison Site - InformationWeek

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Print Publisher Buys U.K. Price-Comparison Site

The purchase is the second online business Scripps has bought in less than a year and reflects a trend of mainstream media companies buying Web-based firms.

E.W. Scripps Co. on Thursday said it has agreed to pay $366 million in cash for uSwitch, a U.K. comparison-shopping site for home services and personal finance.

The purchase is the second online business the Cincinnati-based company has bought in less than a year, and reflects a trend in the publishing industry of mainstream media companies buying online businesses. Scripps last June acquired Los Angeles-based Shopzilla, a comparison-shopping site for retail products sold by more than 65,000 merchants.

USwitch.com helps U.K. consumers compare rates on gas, electricity, home phone, digital television, broadband, credit cards and secured and unsecured personal loans. The site has developed calculators for evaluating several factors, including price, type of service, location and payment method.

USwitch makes money through commissions paid by service providers. A commission is collected each time a consumer’s service is switched to a new provider. The company has contractual arrangements with the leading service providers in each home service category, Scripps said.

USwitch and Shopzilla are the foundation of Scripps's newly created interactive media division. USwitch also owns UpMyStreet.com, which helps people in the U.K. find places to live, save time and money in and around the homes, and find local shops and services.

“The addition of uSwitch to our portfolio of interactive businesses, including Shopzilla, is intended to position Scripps to take full advantage of the rapid growth of online comparison shopping for both products and essential home services,” Kenneth W. Lowe, president and chief executive of Scripps, said in a statement.

Old media companies have been extending their reach on the Web through acquisitions. NBC Universal this month agreed to acquire women's site iVillage Inc. for $600 million in cash. Last year, the New York Times Co. paid $410 million in cash for About.com, which offers expert advice on topics ranging from personal finance and home repair to consumer electronics and geography.

USwitch senior management, including chief executive Andrew Salmon, are expected to continue operating the company after the acquisition is completed. The company this year is expected to generate from $10 million to $15 million in profit on revenue of $40 million to $45 million. Revenue last year was $25 million.

Scripps expects its latest acquisition to lower earnings per share between 10 cents and 15 cents a share in 2006. The transaction is also expected to lower earnings in 2007, and increase earnings thereafter. The transaction is expected increase free cash flows beginning in 2007.

Over the long term Scripps expects uSwitch to generate segment profit margins in the range of 40 percent to 50 percent.

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