RealTime IT News

NetRatings Buys Jupiter's AdRelevance

Online researcher NetRatings again is poised to come to the aid of its ailing rival, Jupiter Media Metrix , through an all-cash purchase of Jupiter's AdRelevance unit.

The Milpitas, Calif.-based NetRatings is to pay $8.5 million to acquire the Seattle-based AdRelevance group, which tracks online campaigns, sites' ad sales and advertisers' spending. The final purchase price is subject to certain undisclosed conditions, which the companies said are likely to be minimal.

The sale gives NetRatings control of AdRelevance's products, employees, historical data, patent applications and copyrights, as well as a client base of more than 150 customers. Unit president Will Hodgman will join NetRatings management, reporting directly to Chief Executive William Pulver.

NetRatings also said it would assume certain liabilities, which it identified as mainly obligations to fulfill client contracts.

By cutting costs and increasing cash stores, the sale gives financially-strapped Jupiter some much-needed breathing room, as the company shops itself and its remaining units to buyers. (Precisely how much New York-based Jupiter will save from the sale was not disclosed, however.)

Earlier this month, the firm revealed in Securities and Exchange Commission filings that it has about $8.9 million in remaining cash and marketable securities, with an additional $6.8 million locked up in letters of credit related to security deposits on real estate leases. At a $10.9 million quarterly cash burn rate, Jupiter's continued survival seemed implausible, with the firm itself noting in the filing its own doubt concerning its ability to continue should it not find buyers.

Now, however, the firm has a new lease on life -- at least for a few months longer.

"The sale of our AdRelevance division is a logical step as we continue to pursue strategic options that strengthen our overall financial position in the marketplace," said Jupiter CEO Robert Becker. "We will use the proceeds from this sale to further advance our leadership in Internet audience measurement and research. Specifically, these funds will enable us to look confidently to the future and continue to innovate with our Media Metrix and Jupiter analyst research brands."

With lease obligations totaling more than $100 million, however, Jupiter's success in finding more buyers remains uncertain. Yet the company is not without what could amount to an ace up its sleeve: it does have its pending patent lawsuit against NetRatings, which continues despite the AdRelevance sale.

The deal puts NetRatings one step closer to establishing itself as the standard for online measurement. Among advertising-trackers, NetRatings -- which shuttered its own AdSpectrum unit last year -- now competes most directly with other big-name players like CMRi and Evaliant.

Last year, NetRatings attempted to make even greater headway by agreeing to acquire Jupiter in its entirety for about $71.2 million in stock -- a deal that the Federal Trade Commission nixed in February, citing antitrust concerns (NetRatings meanwhile had discontinued AdSpectrum in connection with the proposed merger.)

At any rate, NetRatings said it's pleased with the new addition, which it intends to sell alongside the well-known Nielsen//NetRatings audience measurement service that it operates in partnership with Nielsen Media Research and ACNielsen.

"By acquiring the AdRelevance product line, NetRatings has further strengthened its position as the global standard in Internet media and market research," Pulver said. "AdRelevance is the highest-quality, most user-friendly, and most widely-accepted advertising creative and expenditure research solution in the world, and fits perfectly into the Nielsen//NetRatings array of Internet audience measurement services."

Five-year old AdRelevance has been a service of Media Metrix (and later, of Jupiter Media Metrix, following the 2000 merger with Jupiter Communications) since its acquisition in 1999. In August 2001, the unit launched Version 3.0 of its offering, which added tracking capabilities for rich media and pop-up ads.