USA Interactive Sees Gold in E-Coupons

  |  November 21, 2002   |  Comments

Barry Diller's e-commerce conglomerate will spend about $370 million for Entertainment Publications and take more of the coupon publisher's discounts online.

Moving to marry off-line promotions to its online e-commerce endeavors, Barry Diller's USA Interactive is acquiring privately held coupon book publisher Entertainment Publications Inc. in a $370 million cash and stock deal.

Troy, Mich.-based Entertainment Publications serves more than 160 markets and does business with about 70,000 local merchants and national retailers.

USA Interactive , based in New York City, said the deal is consistent with its strategy "of driving the online migration of traditional businesses in areas such as retailing, ticketing and travel..."

Diller said the marriage is a "natural" and would allow Entertainment Publications to offer things such as travel discounts to USA's Expedia and Hotels.com consumers, while serving up dining discounts to the more locally oriented Citysearch user.

Entertainment Publications says it sells more than 8 million annual memberships for Entertainment Books and online access to 50-percent-off and 2-for-1 discounts on dining, travel, shopping and attractions. Consumers redeem an average of 25 offers each per year, generating an estimated $8 billion to $10 billion in merchant sales.

USA Interactive has been moving to turn itself into a Web-based travel and leisure kingdom and last month it closed its buyout of Ticketmaster but canceled similar deals with its majority-owned Expedia and Hotels.com operations.

Entertainment Publications is expected to use USA's technological expertise to develop more convenient, seamless ways for consumers to redeem discounts electronically, offering an alternative to traditional paper coupons.

The terms of the acquisition call for USA Interactive to pay up to 50 percent of the price in USA common stock, which closed Wednesday at $28.13. The company may get a $10 million maximum discount if it decides to pay all cash. The transaction is expected to be accretive to USA's 2003 net income and earnings per share.

USA is purchasing Entertainment Publications from a group of investors led by The Carlyle Group, a global private equity firm.

USA Interactive (formerly USA Networks), set tongues wagging when it went against the grain and embraced e-commerce at a time when the dot-com shakeout was in full swing. The company also owns Home Shopping Network (HSN), Interval International; TV Travel Group; Precision Response Corporation; Electronic Commerce Solutions; and Styleclick Inc.

ClickZ Live Toronto On the heels of a fantastic event in New York City, ClickZ Live is taking the fun and learning to Toronto, June 23-25. With over 15 years' experience delivering industry-leading events, ClickZ Live offers an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!

ABOUT THE AUTHOR

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Gartner Magic Quadrant for Digital Commerce

Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.

Paid Search in the Mobile Era

Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.

Jobs