On the heels of eBay's acquisition of Shopping.com, which I did not think was an excellent strategic move, comes the announcement by E.W. Scripps that it is acquiring Shopzilla.com. In my opinion, this acquisition makes perfect sense as does the acquisition of About.com by The New York Times.
Why these acquisitions make sense?
Why these acquisitions make sense?
- Steady decline in newspaper subscriptions.
- Loss of interest among 18-34 males in watching television.
- Explosive growth in online advertising and search related to shopping
Particularly for Scripps, which owns some of the hottest online properties in its portfolio, acquition of Shopzilla is an excellent strategic fit. As Scripps will face challenges in its newspaper and TV stations business, investment into its online business will provide it with the resources for a gradual business model transformation.
What does it mean for you?
- The world of advertising is undergoing structural changes with greater emphasis on pay-for-performance. If your business model is based on no guarantees for performance (e.g. television, print media, etc.), it may be a good time to rethink your strategy.
- Acquisitions provide an excellent vehicle to access new technology platforms and markets if it will take you unduly long to build it yourself.
- Developing a good understanding of the competitive landscape in real time is key to success in business.
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Keywords: Mergers & Acquisitions - Shopzilla - Scripps