Scripps has stepped up the pace of new digital initiatives and hires over the past few months. And while some have expressed lingering doubts about its newspaper holdings and concern continues over the ability to absorb the high acquisition costs of comparison shopping sites Shopzilla and uSwitch, it’s clear that the company has been zeroing in on growing its interactive revenues.
As we reported last month, Scripps lured Deanna Brown from her post as general manager of Yahoo Media Group’s Lifestyles business unit to take on the new position of president of its Interactive Group. And in an indication of the kind of offerings to come, Scripps has unveiled a new social network related to its cable TV network HGTV and also introduced a new video player on its websites. (Disclaimer: Scripps is one of our sponsors.)
The WSJ takes a look at Scripps’ digital progress. The company has enjoyed considerable early success as online revenues from cable-related properties leapt 70 percent last year—representing roughly 3 percent of total company revenue—and plans to increase that contribution this year. At the moment, the current challenge is turning the $1 billion it spent acquiring Shopzilla and uSwitch into revenue growth. Those sites were responsible for 11 percent of Scripps’s operating revenue in 2006, assuming the company had owned uSwitch for the full year.
As a Merrill Lynch analyst report pointed out recently, Shopzilla has been plagued by a slowdown in unique visitors and pageviews. But Scripps says this is a short-term problem, as the company has cut back on search advertising, saying that it will eventually get revenue from visitors who enter its website directly rather than those directed from third parties.
Overall, Scripps hopes investors and analysts will take its track record into account. In 1994, it began to change its identity as a newspaper company to a diversified media company when it started the HGTV cable network.  And while it has displeased some by holding on to its newspaper division, Scripps hopes its demonstrated commitment to the interactive space will prove that it can repeat its cable success.
Related:
-- Industry Moves: Feinbaum Upped To EVP at Scripps Networks; Looking At M&A and New Online Launches
-- Earnings: Scripps Q4 Profits Rise; Interactive Up; No Plans To Sell Newspapers; Shopzilla Concerns
-- Scripps Considers Newspaper Sell-Off To Focus On Internet, Cable