Alan Meckler, Chairman and CEO, INT Media Group, Inc.

The Wall Street Journal on May 7th ran a fine piece on the editorial page written by Kim Stassel entitled "Web Sites Should Show Us the Numbers."

This is a well-written article and it makes great sense. Perhaps nothing in the Internet industry has caused more confusion than the reporting and meaning of Web traffic stats ---particularly under the category of "unique visitors."

Until recently, a great number of unique visitors assured a huge public or private valuation for a Web site. Wall Street firms could take almost anything public as long as it had at least one million unique visitors and a "history" of showing rapid unique visitor growth. Venture Capital firms would throw millions of dollars at anything that smelled of large unique visitor numbers.

Even today, the financial press and Wall Street are enamored with the unique visitor factor, albeit to a lesser degree. However, we are starting to see the realization that loads of unique visitors mean nothing if the organization in question cannot make money.

A year ago, all Yahoo had to do was signal that its page views and unique visitor traffic were growing ahead of schedule and the stock would jump. I can remember a few years back when Lycos purchased Tripod. Bob Davis, then CEO of Lycos, bragged that as a result of the deal, Lycos would now have more unique visitors than Yahoo. Profit was not a concern ---just unique visitors.

There are countless examples of companies achieving huge stock valuations based solely on unique visitors and page views. Examples include, but are not limited to, Starmedia.com, iwon.com, About.com, and all of the well-known portal sites such as Altavista, Excite, and Infoseek.

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CNet made a splash with the creation of the portal site Snap.com. Subsequently, naive executives at NBC bought Snap based solely on the craze for "reach" represented by page views and unique visitors. And of course, Disney reached the same conclusion with its purchase of Infoseek. Another recent move along these lines would be Primedia's purchase of About.com.

Finally, think of the hundreds of millions pumped into iwon.com, which still has great traffic based on the short-term idea that giving away money was the key to profits; CBS made its portal bet with this company. (Alas, I must add that internet.com, the company I am associated with, falls into this category as well except we are not a consumer portal, but rather a business information site and I think this difference will be significant over time.)

So what happened?

It turns out that unique visitors mean nothing if a Web site cannot make a profit or at least be close to a profit. Web sites with large unique visitor counts can attract loads of people, but in many instances, these people are not the people that advertisers find appealing (after having tested many of these super-sites with banner ads and e-commerce partnerships). And all of this has now been exacerbated because of the general ad-spending slowdown that has affected all media businesses.

Another problem, and this is a part of what Stassel was writing about in the WSJ article, is the inexact process that is used by the companies that track unique visits to a Web site.

The two leaders in this business are Media Metrix and Nielsen/ Net Ratings. It is not unusual for these two firms to have large discrepancies in their monthly unique visitor reports for the same Website. Stassel writes that during one monthly report, Britannica.com had a difference of over one million unique visitors between the numbers reported by Media Metrix and those of Nielsen/ Net Ratings (the numbers were 1.4 million and 2.9 million respectively).

As the CEO of INT Media Group and the Web site internet.com, I can tell you that we have the same problem. In our case, Nielsen/ Net Ratings usually shows us as having 500,000 to one million more unique visitors per month than does Media Metrix.

What is an advertiser to think? And what is a Wall Street analyst to think when confronted with such inconsistencies? Most of these folks also have no idea that neither of these firms includes traffic from outside of North America in their counts --- and of course, Web sites more than any other medium in history have the advantage of large readership access from anywhere in the world. Once again, if I might use internet.com as an example ---- nearly 30 percent of our daily readership originates from outside of North America and yet neither Media Metrix nor Nielsen/ Net Ratings takes this fact into their respective reports.

I do not have a solution for the dilemma caused by the reporting discrepancies about unique visitors. I do think that audited page views are a much more valuable statistic for the ad industry and the financial analysts. Numerous magazine-auditing agencies that have been in business for many years, such as ABC (Audit Bureau of Circulations) and BPA International, now offer page view auditing services for Web sites.

Advertising agencies have trusted these firms and have been using their audits for magazine circulation verification for dozens of years. Page view numbers, I believe, are more meaningful than unique visitors once one understands what the editorial focus is of a particular Web site. Page view audits combined with independent reader surveys of Web sites are probably more credible these days than the unique visitor stats, which are still subject to the huge swings pointed out by Stassel and by our own experience with internet.com.

Alan Meckler

*Meckler's column appears Fridays. He enjoys your feedback. Send to atNewYork@internet.com