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Gannett Joining Online Media Push

Sandy Brown

In another nod to the coming fusion between media companies and online marketing outfits, Gannett (GCI Quote) is buying closely held PointRoll in a deal valued at more than $100 million, according to sources close to the large media company.

Pennsylvania-based PointRoll is an online ad marketing firm that uses its technology to enhance ads. Its products are designed to improve the performance and the interactivity of banners, streaming video, email and data mining to drive sales.

At Gannett, owner of a number of TV stations and newspapers including USA Today, the move is a way to redeploy capital into the growing online advertising space. TV station business growth has been flat this year, and newspaper revenue is sluggish as online media platforms continue to grow.

"Gannett is a terrific company and we are pleased to come on board," said Chris Saridakis, who becomes the CEO of PointRoll. "With hundreds of online sites, including USATODAY.com, Gannett understands the demands, dynamics and changing technologies of Internet advertising."

Saridakis was PointRoll's chief operating officer. Jules Gardner, the company's founder and CEO, announced that he is leaving the company.

The deal comes just days after another old-world media company, E.W. Scripps (SSP Quote), scooped up a company in the space buying Shopzilla for $525 million.

For Scripps, a company that until now has been involved in online shopping in a modest way, the move is a compelling one at a time when its cable networks division is flourishing but its traditional media properties like newspapers and TV stations assets are slowing.

The acquisition of Shopzilla is in line with Scripps' stated desire to step firmly into a new media platform with strong growth potential. Shopzilla attracted 14 million unique visitors during April, according to the company. Scripps already drives a similar amount of traffic through its online brands including FoodNetwork.com, HGTV.com, DIYNetwork.com, fineliving.com and ShopatHomeTV.com, plus a host of Web sites operated by its newspapers and local TV stations.

The move will allow Scripps to aggregate audiences across media platforms including their newspaper, TV and cable channels and sites.

Asked if the $525 million price tag was right, one investment banker familiar with Scripps says, "It depends on what they do with it." Of the Scripps and Gannett deals he adds that in the near future, "you're going to see a lot of major media companies redeploy 10% to 20% of their market cap into new media platforms such as online and interactive."

Scripps' focus on building cable networks like Home and Garden TV, the Food Network and DYI: Do it Yourself have set it apart from other media companies. Shopzilla will become a standalone operating unit of Scripps, according to the company, but synergies between its cable programming and Shopzilla could drive traffic both ways.

Between Yahoo!'s (YHOO Quote) Yahoo! shopping, Google's (GOOG Quote) Froogle, Amazon (AMZN Quote) and others such as NexTag and PriceGrabber, there is no shortage of competition in the price comparison space.