Scripps (NYSE: SSP), which is in the process of splitting up its business into two units, has filed its annual 10-K report with SEC, and the Interactive division, which would be part of the supposedly fast growing Scripps Networks Interactive, is still seeing its share of troubles after a turbulent year. Its acquisition of comparison shopping plays with Shopzilla and uSwitch (in UK) is what has been primarily responsible for this turbulence.

SEE ALSO: Earnings: Scripps Q4 Income Down 8 Percent; Interactive Down 7.8 Percent On uSwitch Weakness

First, its note on the two small acquisitions it did last year: “In July 2007, we reached agreements to acquire the Web sites Recipezaar.com and Pickle.com for total cash consideration of approximately $30 million.” And this optimistic note on overall online ad revenues: “Our Internet sites had advertising revenues of $40 million in 2007 compared with $34.0 million in 2006 and $22.0 million in 2005.”

Then, on to the troubles and its effort to turn them around:
—A non-cash charge of $411 million, including $312 million of nondeductible goodwill, was recorded to reduce the carrying value of our uSwitch business’ goodwill and intangible assets to their fair values. The charge decreased income from continuing operations by $382 million, $2.32 per share.
—Falling energy prices in the United Kingdom resulted in less switching activity and lower revenue at uSwitch during 2007 compared with previous years. While we have made efforts to grow other service categories at uSwitch, including personal finance and insurance products, our revenue remains concentrated in the energy market. This concentration, combined with the changes in the energy markets in the United Kingdom, led to lowered future cash flow expectations for uSwitch, which resulted in a non-cash impairment charge of $411 million in the fourth quarter.
—In the later half of 2007, we began to see improvement at Shopzilla. Revenue in Q407 increased slightly compared with Q406 primarily due to traffic acquisition efficiencies.
—Segment profit in 2007 was impacted by $10 million of costs that were incurred in the first quarter to build brand awareness for uSwitch and $7 million of costs incurred related to a management transition at Shopzilla.
—Interactive media segment profit is expected to be $13 million in the first quarter.