U.S. To Investigate NetRatings-Jupiter Merger

The U.S. Federal Trade Commission (FTC) has asked for additional information on the pending merger between leading Internet research firms NetRatings (Nasdaq: NTRT) and Jupiter Media Metrix (Nasdaq: JMXI), the companies said Friday.

However, the request does not necessarily signal that the government has strong enough concerns about the merger to stop it from closing as expected in the first quarter of 2002. Shareholders of Jupiter Media Metrix must approve the deal as well (*correction).

"The companies intend to work diligently to respond to this request for additional information as promptly as practicable," the firms said in a joint statement.

The request for additional data comes under the Hart-Scott-Rodino Antitrust Improvements Act. The companies did not disclose what type of information the government is seeking.

At the very least, the request imposes an additional 30-day waiting period before the merger can move forward.

Rivalry Set Aside

In late October, Milpitas, California-based NetRatings said it would buy New York-based Jupiter in a stock-and-cash deal worth about US$71 million.

The merger would combine two of the most widely quoted Internet measurement and research firms and help move the Web toward a single standard for measuring online traffic, NetRatings founder Tim Meadows told the E-Commerce Times when the announcement was made.

"We've been working toward that for some time," Meadows said.

Different Approaches

It also would end a sometimes bitter rivalry between the two firms, including legal action over proprietary measurement techniques, which online companies use to set advertising rates and attract strategic partners.

Jupiter Media Metrix at one point filed a complaint against NetRatings for patent infringement. That complaint has been deferred pending the completion of the merger (*correction).

Both NetRatings and Jupiter use surveys of carefully selected consumer panels to estimate Web traffic. While they often reach the same conclusions, their figures and approaches vary somewhat.

For instance, NetRatings' current traffic statistics compare holiday season numbers with pre-Thanksgiving figures, while Jupiter often compares this year's traffic to online activity from last year.

FTC on Watch

The FTC has been actively monitoring online mergers in recent years. In August, the agency sought more information about the pending US$415 million takeover of No. 2 online jobs site HotJobs.com by TMP Worldwide (Nasdaq: TMPW) (Nasdaq: TMPW), parent company of leading online recruitment firm Monster.com.

The FTC also held up a merger between real estate concerns Homestore.com and Move.com for several months, and continued to investigate the deal post-closing before finally giving its blessing to it.

*Editor's Correction Note: In the original version of this article, we reported that the closing of the merger would be delayed until the first quarter of 2002. To clarify, the merger was scheduled to be closed in that quarter originally. Also, we reported that shareholders of both companies had to approve the deal, when in fact the deal does not need approval from NetRatings shareholders. Finally, the two firms did not "trade" lawsuits, as stated in the article. Jupiter Media Metrix did file a patent-infringement complaint against NetRatings, but that complaint has been deferred pending the completion of the transaction.