HitWise was founded in 1997 by Australian internet entrepreneurs Andrew Barlow and Adrian Giles and got investment from Allen & Buckeridge and Insight Venture Partners. The Telegraph is reporting that the company is on the auction block.
Why? The market for all things online is booming, and technically, as marketing dollars continue to shift online and consolidation takes place in the industry, you’d think the company and industry’s future was rosy, no?
How good is the market now? Back in 2002 - when “online” was a dirty word - comScore bought Media Metrix for $1.5M in cash (that’s right, $1.5 million).
Times - and the markets - have changed. Read on to see how much comScore Media Metrix’s competitor is worth today… But before you do, it should be noted that in 2000 - when online was sexy - comScore and Jupiter merged in a $414 million merger. I know, pretty insane. Obviously these companies represented going concerns with different reach, size, revenue, yada-yada-yada. But it’s the same stinking market, no?
All right, who’s kidding who? Web analytics sucks. In fact, the word sucks’ PR agency just called us and asked that we remove that association.
Let’s see who the usual suspects are? comScore Media Metrix, Nielsen Net Ratings, Alexa, Hitwise all make valiant efforts but their approach and results are laughable at best. It’s nothing against them, their people or their data; it’s the method is ridiculous when you consider how great analytics on the Web could be.
Then again, measuring online audiences through a third party source is extremely hard, far harder than it is to estimate offline audiences because the actual properties that are being measured have a gauge to use. Unlike the sheep in radio, TV and print who go by what others say, websites know that the online audience measurement tools (tools being literal and figurative) are off, but sometimes have to play along with them.
Today we learn that Hitwise, a “leader in the space” I am sure has put itself on the auction block and is asking for some $350M for the company.
I was trying to see how ridiculous or valid this asking price was and came across Nielsen NetRatings’ value: a publicly traded company, NNR boasts a market capitalization of $652M, but with a P/E (according to Yahoo! Finance which occasionally sucks equally) of 323 and a P/S of 8.5.
That’s rich.
Meanwhile, Jupiter Media (who sold Media Metrix to comScore in 2002) is worth $235 million, with a P/E of 13 and a P/S of 1.5. Obviously not as sexy as NNR, whose competitor comScore owns Media Metrix.
Either way, if I had to put up some chips on either HitWise, comScore or Nielsen Netratings, I’d cash in my chips instead and invest in something else.
Think about it: you don’t use the same search engine as you did in 1999? Why would you use the same online audience measurement tool?
Our take is that cookies and other negatives of site-specific tools notwithstanding, in the end, site specific measurement tools will prevail over ones using panels. For our explanations and rationale, click here (Google is the Future of Web Analytics) or here (Opportunity for Google in Web Analytics). We don’t usually look at Google as the silver bullet but between its acquisition of Urchin (now Google Analytics) and its massive data covering who searches for what and clicks on what, Google is uniquely positioned to make online audience measurement FREE to get more ad dollars from marketers.
NNR knows this, comScore knows this, and clearly, HitWise knows this too.
To us, HitWise’s decision to sell has a lot to do with it realizing that it’s time to get out of a market where the/one of the market leaders trade at a P/E of 300 and boasts a market cap of $600M…
In other words, get out now, before you become a Looksmart, Inktomi, Infospace, etc…
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