Jupiter Media Metrix - Media Metrix Acquires Jupiter Communications

MEDIA METRIX ACQUIRES JUPITER COMMUNICATIONS

In June 2000 Media Metrix announced it would acquire Jupiter Communications, an Internet research and consulting firm, for $414 million in stock. Following the announcement, however, Jupiter's stock fell by more than 8 percent, while Media Metrix's stock lost more than 17 percent, reducing the value of the stock-for-stock acquisition to about $350 million. The new company, called Jupiter Media Metrix, had more than 730 employees and 1,700 clients worldwide. Following the acquisition Jupiter Media Metrix reorganized into five divisions: Media Metrix, Ad-Relevance, Jupiter Research, Jupiter Events, and Jupiter Media Metrix International. In addition to offering Internet audience measurement, the company also provided analyses of Internet trends and forecasts. Its consultants worked with clients to develop business models based on emerging trends in electronic commerce and Internet usage.

As it was for many other Internet companies, 2001 was a difficult year financially for Jupiter Media Metrix. The firm saw its stock decline to less than $1 a share by late 2001, down from $17.85 when Jupiter Media Metrix began trading as a single company in September 2000. The firm's long-time CEO, Tod Johnson, stepped down in March 2001. He was replaced later in the year by Robert Becker, an executive formerly with Infosis and the Thomson Corporation. Johnson remained as the company's chairman. In April the company laid off 18 percent of its staff and reported a net loss of $54.2 million for the quarter ending March 31, followed by a net loss of $48.2 million for the quarter ending June 30. It had to take a $25 million loan to remain in business while it sought a source of permanent funding. In October the company said it would eliminate another 180 workers, or 30 percent of its workforce, as part of its effort to trim $40 million in operating expenses. During the year Jupiter Media Metrix was also involved in patent infringement disputes with PC Data Online—which Jupiter won—and then with NetValue USA. While Jupiter Media Metrix added new services and enhanced existing ones in 2001, it was hard hit by the downturn in the Internet economy. By trimming its workforce and cutting costs, the company hoped to achieve profitability in the future.