In the dot-com economy, few companies may know how to turn a profit, but everyone is sure of at least one thing -- good numbers (page views, site visitors, analyst predictions) are life's own blood. So Wednesday morning's announcement that Media Metrix is purchasing Jupiter Communications is sure to send nervous shockwaves through the corporate Internet community. In an industry where every step is a gamble, what happens when one company gets to shuffle all the decks?
Jupiter Communications is already raking in millions for its analyst reports, which offer pie-in-the-sky predictions and common-sense suggestions to Internet start-ups looking to pad their SEC-mandated S-1 filings. Media Metrix supplies the traffic numbers that everyone in the dot-com industry accepts as the gospel truth on Internet measurement -- despite Media Metrix's own acknowledgment that its statistics are incomplete.
But post-buyout, a new powerhouse to be known as Jupiter Media Metrix will dominate. Imagine the joy -- the industry can get all the funky numbers it needs, in one convenient shopping location!
What does this mean for the Net information marketplace? Well, at dot-com companies frothing at the mouth for more statistics and information -- traffic numbers, market predictions, e-commerce forecasts, Internet usage statistics, you name it -- the accounts payable departments will probably be pleased that they can now send off monthly payments to merely one company. And Jupiter Media Metrix, as one entity, takes a giant step closer to becoming the standard arbiter of Internet statistics, simply by default.
Anyone interested in the truth about Internet trends, however, should be a bit dubious. Think about it: Now, you'll have Jupiter Media Metrix analysts sorting through their own admittedly unreliable numbers to produce reports. Will this make the company's expensive analyses more statistically relevant, or simply more one-sided?
The Web of connections gets messier. Jupiter is a backer of Inside.com, a new online magazine intending to charge a hefty fee for detailed reports on media of all kinds. Kurt Anderson, Inside.com's co-founder, is on Jupiter's board of directors. Consider this: You can pay for a subscription to Inside.com, where you will now be able to read analysis of Jupiter Media Metrix numbers by reporters who are, in part, backed by Jupiter Media Metrix. They may even quote Jupiter Media Metrix analysts! Would that be a conflict of interest on the part of Inside.com? Or does anybody even care about such outmoded quibbles, in the new numbers economy?
Jupiter Media Metrix will still face competition. Forrester Research and Gartner Group both offer formidable Internet consumer market analyses (although, in yet another tangle of connections, Gartner Group actually owns 20 percent of Jupiter Communications). Media Metrix also has to look over its shoulder at Nielsen NetRatings, though Nielsen lags far behind. So consumers will have a variety of tasty traffic numbers and industry predictions to choose from. As they have in the past, they will probably pick the ones they like the most.
But then again, this is an industry that relies on a style of business that Josh Harris, Jupiter's eccentric co-founder, once described as "really puzzling the market, plus voodoo -- a little black magic doesn't hurt." Perhaps, instead of paying through the nose for numbers and analysis, dot-com companies should just go pick up some voodoo dolls instead. It would probably be cheaper.
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