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If you can’t beat ‘em, sue ‘em. That appears to be Jupiter Media Metrix’s new competitive strategy in the ever-tougher business of online audience measurement. The market researcher filed two new patent-infringement lawsuits Wednesday against Paris-based NetValue and Milpitas, Calif.-based NetRatings, a partner in the Nielsen NetRatings Web audience-measurement service. Jupiter Media Metrix was no doubt emboldened by Wednesday’s settlement of a similar suit against PC Data, a technology market researcher that operated an online tracking system similar to Jupiter’s. The settlement calls for PC Data to withdraw from the Web ratings business, which ultimately resulted in the Reston, Va., firm’s decision to sell its assets and cease operations. “We are pleased that the suit has been settled,” says Mary Ann Packo, group president of Jupiter Media Metrix’s measurement business. “The settlement is a demonstration that the patent looked solid.” Web audience researchers use software to monitor the movements of surfers online and then report on the size of each Web site’s audience, similar to the way Nielsen reports the ratings of television shows. Each firm uses a slightly different technical method for gathering the data. The field has long been a competitive one. Media Metrix was the field’s pioneer and is its current leader. NetRatings teamed with Nielsen Media Research to become a significant player. PC Data and NetValue were later entrants. Over the years, the firms have debated which service provides the most accurate ratings, uses the best recruiting techniques and delivers the best client service. Now Jupiter Media Metrix has moved the battle to the U.S. District Court in Delaware. The firm holds two patents in the Web ratings area regarding the ability to track surfers’ movements online via software installed on their computers. The PC Data lawsuit was filed in September, shortly after Jupiter received the most recent patent. Although research purists disagreed with the unconventional way PC Data recruited surfers to be part of its research panel, the firm became successful relatively quickly. As of last summer, it had recruited more than 120,000 panelists and had approximately 400 clients. The firm also sold its services for less than $10,000 a year — far less than Media Metrix. Media Metrix will not comment on its exact reasons for taking legal action — PC Data’s success could be one reason the firm chose to target its weakest competitor with its first lawsuit. And because PC Data settled, Media Metrix is in a much stronger position to attack its bigger foes: NetRatings, backed by the giant Nielsen media research empire, and NetValue, backed by Taylor Nelson Sofres, a European market research leader. Meanwhile, PC Data’s competitors have moved quickly to leverage the failed company’s assets. Earlier this month, NPD Intellect bought PC Data’s other major research business: a longstanding computer retail-sales-tracking practice. Then on Tuesday, NetValue announced that it had purchased PC Data’s online ratings service. NetValue kept PC Data’s panelists and then sold its client base and Web site to what appears to be the latest entrant in the online shopping and traffic measurement business, ComScore Networks. Media Metrix received PC Data’s software and other technology as part of settlement of the lawsuit. The rash of new lawsuits comes at a tough time for the online ratings business. The death of many dot-com businesses has translated to an ever-smaller client pool with fewer dollars to spend on audience research. And investor departure from the Internet services sector generally has made it difficult for online ratings companies to raise funds. Both NetValue and NetRatings issued statements Wednesday dismissing the Media Metrix lawsuits as without merit. Both firms cited technological differences between their methods and those patented by Media Metrix. But if the patent is interpreted broadly as one for gathering data on Web surfers, Media Metrix might be able to finish off its remaining American competitors. ComScore also tracks surfers’ behavior online but says it’s not afraid of Media Metrix coming after it next. “Our information acquisition technology is different,” says James A. Powers, chief counsel for ComScore. Powers feels that Media Metrix’s case will be strengthened by PC Data’s settlement. If Media Metrix continues to try to assert its power over other players in the online audience measurement field, however, it will hurt the industry’s future. “If they get what they are asking for,” says Powers, “it will chill innovation in this area.” As for PC Data, its demise is a classic tale of dot-com ambitions ruining a perfectly good company. The firm had run its computer retail-sales practice successfully since 1991 and was a leader in its field. As more computer products began to be sold online, PC Data launched its audience measurement service with the end goal of tracking all e-commerce sales. It expanded aggressively last year and received funding from outside parties, including lead investor BRM Capital and a $5 million investment from Xcelera, a European Internet holding company. PC Data CEO Nancy Goldberg said the Media Metrix lawsuit was one of several factors in the company’s decision to sell its assets and close its doors. Industry consolidation and a shrinking client pool also contributed to the decision. Gustav Vik, executive VP of Xcelera and a PC Data board member, added that the shrinking valuation of competing Web ratings firms inhibited PC Data’s ability to raise more funds. “If PC Data only had its offline business,” Vik says, “it would have been able to continue to fund itself.” David Lake contributed to this report. Related Articles from The Industry Standard: Media Metrix Is Flying Down to Rio Media Metrix to Buy Jupiter Nielsen/NetRatings Expands Online Coverage Copyright (c) 2001 The Industry Standard

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