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comScore Dials Up M:Metrics

Online metrics firm comScore (NASDAQ: SCOR) has acquired privately held M:Metrics, a Seattle-based company that provides data on mobile usage. comScore will pay $44.3 million in cash for the metrics company and issue roughly 50,000 stock options to M:Metrics investors.

With the snowballing introduction of Internet-enabled mobile devices and 3G phones, comScore had been planning to expand its mobile measurement reporting, but Magid Abraham, comScore's president and CEO, estimated that the acquisition of M:Metrics accelerated that effort by two years. "We believe we are now at an inflection point of Internet usage of mobile devices," Abraham said on a conference call this morning.

Advertisers and publishers are increasingly looking to mobile devices as the next medium to interact with their customers, and comScore isn't the only Web tracking service getting serious about mobile.

Last June, Nielsen purchased a company called Telephia, which it later rolled into the Nielsen Mobile division formed in October. Prior to that transaction, Abraham said that comScore had pursued a shortlived partnership with Telephia, but that consumer uptake was "low."

In a research note, Jeffries analyst Youseff Squali praised the transaction. "It provides comScore with a solid and early foothold in the fast-growing mobile measurement market, giving it leadership in this emerging space," he said.

Shares of comScore stock were up nearly 4 percent in early trading on news of the acquisition, which comScore announced yesterday after the market closed.

Through the acquisition, comScore will add about 100 new clients to its current customer base of 950. The combined sales forces will now be able to work together and cross-sell the two companies' products.

comScore expects that M:Metrics' data tracking tools will complement its current Web metrics services, providing advertisers and publishers with a holistic picture of how people interact with digital media as they move toward integrated cross-platform marketing campaigns.

Mobile marketers have complained that a lack of analytical data can hinder the effectiveness of their campaigns. They can easily track responses to text campaigns or in-call ads, but carriers typically do not reveal data about how people interact with mobile Web ads.

Cookies, the bits of software that help advertisers target ads on the desktop Web, are not yet available for the mobile Web in the United States.

M:Metrics could help comScore meet that need with its M:Ad product, a tracking service that measures the reach of mobile display advertising. M:Ad, which the company claims is the first of its kind, is available in the United States and United Kingdom.

M:Metrics' other main products are MeterDirect, an on-device meter that records the mobile activities of a panel of more than 4,000 smartphone users, and MobiLens, a monthly syndicated survey that captures information about mobile users' device preferences, media consumption and demographics.

comScore looks for the M:Metrics acquisition to expand its presence in Europe, where the mobile tracking firm has a solid foothold. It is next looking to set up shop in Asia, first China, then Japan sometime next year.

Both comScore's board and M:Metrics' shareholders approved the transaction, which closed yesterday.

comScore expects its M:Metrics division to be profitable by the end of the year.