comScore, NetValue in Alliance
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NetValue and comScore Networks, two competitors in the online metrics arena, are betting that by teaming up, they can help each other expand while staving off pressure from competition.
The two players Wednesday formalized a strategic alliance, strengthening Paris-based NetValue's position in the U.S., while expanding Reston, Va.-based comScore's presence worldwide.
Under the agreement, NetValue will gain access to comScore's massive 1.5 million-person panel, which comScore uses to sample and analyze Web traffic, demographics, and the like. NetValue will discontinue its own U.S. panel, it said.
NetValue will also license comScore's tracking technology through the arrangement.
Meanwhile, NetValue will lead the sales and marketing of both companies' products in Europe, Asia, and South America, where NetValue already does business. comScore also will license its online access tool.
"This venture gives NetValue a strong partner in the U.S. market and provides comScore with the opportunity to have its products sold in the 15 countries ... in which NetValue is an established force," said NetValue U.S. president Jim Hatch from New York. "In the U.S., NetValue will now offer its clients a broad base of services based on comScore's 1.5 million consumer database ... and [we can] concentrate on growing our marketing and consultancy practices."
Both companies also said they would invest resources to increase the size of their joint international panel from its current level of 550,000 users, to over one million.
The companies say the resulting international panel, which will include home, work and school audience segments, will be the most accurate in the industry because of its large sample size. It will certainly be the largest -- with a million users, the joint panel dwarfs even the combined panels of market leaders Nielsen//NetRatings and Jupiter Media Metrix.
But as with its domestic panel, questions linger about whether analysis based on comScore's panel is accurate.
Critics charge, for instance, that comScore's process of incentivizing users to sign up to participate skews its results. (comScore has routinely denied any inaccuracies introduced by its polling methods.)
At any rate, the two new partners see the massive panel and NetValue's global footprint to be a major competitive differentiator in a tightening space.
The alliance comes following a recent Jupiter lawsuit against NetValue, comScore and NetRatings, seeking a permanent injunction on the companies' PC and Internet-use tracking on the basis of patent infringement. Jupiter received its patent for tracking users' PC and Internet usage in September.
Legal issues aside, all the industry players are feeling increased pressure from the tightening economic market. Publicly traded NetRatings, which is 60 percent owned by Nielsen Media Research, recently reported a $0.01 per share profit -- not counting sizable losses from overseas joint ventures -- while Jupiter Media Metrix has gone through several rounds of layoffs and management restructuring.
A fourth defendant in Jupiter's suits, PC Data, closed up shop in March and sold most of its assets to comScore and NetValue, citing market conditions.
In this light, then, the move will also serve to bouy the two smaller players while conditions remain harsh.
"NetValue will now be able to offer the market a unique, comprehensive suite of products," said NetValue chief executive Lennart Brag. "The partnership with comScore reinforces our presence in the U.S., while allowing NetValue to focus our financial investments in Europe, Asia, and South America."