Confirming months of rumors that Nielsen Media Research was on the auction blocks, the Dutch publishing company VNU announced Monday that it would pay $2.5 billion (US$) in cash for the media audience tracking service.
VNU, publishers of magazines, newspapers, business and marketing resources and educational materials made an announcement to journalists at a press conference in Amsterdam Monday. The company is planning an initial public offering for Nielsen/NetRatings, the company’s Internet audience measurement service, within the next year.
If VNU follows through on its plans, it would be the second of the two major Internet audience-tracking services to go public. Media Metrix, Nielsen/NetRatings’ archrival, raised $51 million in a May IPO. The company’s market value stands at $650 million, which is what VNU says Nielsen/NetRatings is worth.
Fighting To Be King of the Mountain
The market for Internet audience measurement services is expected to soar to $100 million by 2003, up from $19 million last year, according to Forrester Research. Web businesses use the services to track their audiences and set their advertising rates accordingly.
Nielsen bought a 14 percent equity stake in NetRatings last October and the two companies launched their service in March of this year. According to reports, Nielsen intends to raise $70 million to increase its stake to 54 percent, while NetRatings intends to sell off 25 percent of its holdings in the venture.
Nielsen/NetRatings joint venture was announced last October, days after Media Metrix and Relevant Knowledge merged. Since then, the two have fought a pitched battle, each accusing the other of issuing false data to bolster its claim to being the number one service on the Internet.
Media Metrix tracks the traffic on 15,000 Web sites, while Nielsen/NetRatings relies on a survey panel of 12,000 to gauge audience use. The company is known primarily for its television measuring statistics — which television executives use to assist them in bludgeoning the TV nation into watching another senseless sitcom.
The company generated revenues of $428 million for the fiscal year, up from $402 million in 1998.
VNU, which is based in Haarlem, Netherlands, is one of the nation’s premier publishers. The company says the acquisition of Nielsen is an excellent fit with its business and marketing information operations and will help it grow significantly in the U.S. and beyond. With the acquisition, 39 percent of VNU’s revenues will be generated in the United States.