Shopzilla, which is the Interactive Services division of Scripps Network Interactive, saw revenue decline 8.6% compared to last year. Here are the details from the press release:
Interactive Services revenue was $37.3 million compared with $40.8 million in the year-ago quarter.
Segment expenses decreased 6.3 percent to $31.3 million.
Segment profit was $6.0 million compared with $7.3 million.
Direct leads to Shopzilla merchant partners increased 20 percent year-over-year during the quarter. The lead volume metric measures the value Shopzilla delivers to its merchant partners, as well as the level of engagement consumers have with its branded comparison shopping Web sites, BizRate.com, Beso and Shopzilla.com.
Yes, the bad economy has battered the shopping engines, but Google has also put tremendous pressure on Shopzilla, Shopping.com, PriceGrabber, etc. Back in the boom days, Shopzilla delivered revenue of $50M+ in in the second quarter:
-Q2 2006: $65M Revenue, $16.5M Earnings*
-Q2 2007: $59M Revenue, $6.8M Earnings*
-Q2 2008: $57.2M Revenue, $12.9M Earnings*
Shopzilla should be applauded for maintaining revenue of aprx. $37M in such a tough environment, but it’s obviously coming at a higher and higher cost. If leads to Shopzilla merchants increased 20% Y/Y but revenue decreased 8.6%, that means that Shopzilla is not able to monetize leads to merchants as well as before, most likely because the company has to pay a hefty revenue share to its publisher partners. I talked about this last quarter as well. The introduction of a site like Beso, which according to Compete has reached nearly 1M unique users (very cool to see), is a necessary step for Shopzilla, but it’s not enough.
And I’m not sure what is enough at this point.
*I’m 97% sure I’m accurate with these numbers. I can show multiple examples where Shopzilla revenue was reported differently at different times. And I’m not talking about adjustments due to uSwitch. A press release would say revenue = $x and then the next year it would say revenue grew y% to $z, but those numbers didn’t always add up.
Posted by Brian Smith 
