ComScore (NasdaqGM:
) and Nielsen are both market research and audience
measurement businesses.
They have a "panel" of independent internet
users whose activities they monitor (with permission of course) and
based on the internet usage of this panel, they publish broader
internet measures like unique visitors, visits, page views, time spent
etc. for most of the highly trafficked web sites on the internet. They
also work with top internet companies to sell their portfolio of
digital media measurement services that allows their clients to
determine how their site is doing, where they get their traffic from,
who they lose their traffic to, how their competitors are doing in
terms of online traffic and so on.
Nielsen, in a
recent press release titled "Nielsen Launches Largest, Most
Representative Online Audience Measurement Panel in U.S." stated that
their panel of Internet users numbered more than 230,000, bigger than
any rival’s panel. This sparked a quick reaction from ComScore whose
Chief Research Officer Josh Chasin responded that his company's panel
was bigger with 300,000 users. "Our panel is larger!", he claimed.
Well, not exactly, but you get my point right?
As
for the stocks, SCOR has been an interesting stock, but I am not a
buyer. In fact, I am skeptical of these two companies using a sample
size of just 300,000 or so to project the behaviour of 100 million
internet users. To me, their sample size is not statistically
significant, but unless someone else can measure a broader audience,
ComScore remains the official word on internet usage statistics.
Also,
companies like Hitwise and Compete are nipping at the heals of ComScore
with their own rival panels and technology, which proves that this
business is not a very unique one and has little to no barriers to
entry.
-- Faisal Laljee
Full Disclosure: I do not own SCOR but my position can change anytime without notice.
