Jupiter, NetRatings Call Off Union

Web research firms Jupiter Media Metrix (Nasdaq: JMXI) and NetRatings (Nasdaq: NTRT) will not join forces after all. The two have called off a deal under which NetRatings would have acquired Jupiter Media Metrix for US$71.2 million in cash and stock.

Jupiter may have been left at the altar, but the company is already anxious to date again. "With the termination of the Jupiter Media Metrix/NetRatings merger, we will now pursue other strategic options," said Robert Becker, CEO of the company.

Now, Jupiter is forming a special committee of its board of directors to begin looking into other options that will strengthen the company's position in the marketplace.

FTC Opposition

Jupiter and NetRatings had hoped to complete the deal by the end of March, but opposition from the Federal Trade Commission (FTC) proved too difficult to overcome. After "extensive discussions" with both companies, the FTC indicated it would seek a preliminary injunction to block the acquisition.

The FTC's main objection was the loan and security aspect of the deal. According to Jupiter and NetRatings, the agency rejected alternative loan structures suggested by the companies.

Competition was also an important issue, since the two firms had planned to come up with a common standard for measuring Web traffic. That agreement prompted the FTC to ask for more information about the deal in December.

The two companies do not agree with the FTC's findings, but Becker said that without the loan agreement, Jupiter "was not in a position to contest the FTC in a lengthy court challenge."

Lawsuit on Track

One signal that all was not well with the deal came in January, when Jupiter announced it would go ahead with a patent infringement lawsuit against NetRatings.

At the time, the two companies said they were going ahead with the suit in order to "preserve their respective positions in the patent litigation." The trial is set to begin October 28th.

Taking Measurements

Jupiter Media Metrix and NetRatings go head-to-head when it comes to measuring Web traffic, often with different results.

In January, for instance, NetRatings found that TaxAct.com was the fastest-growing tax site on the Web, with the number of unique visitors up 304 percent over December.

Irs.gov came in at number three with a 273 percent increase in unique visitors. NetRatings also named iVillageHealth as a top gainer among health sites, with its number of unique visitors up 282 percent in January to 2.076 million.

Jupiter, on the other hand, named Irs.gov as the fastest-growing tax site in January, with a 275 percent increase in unique visitors over December. The company also found very different results for iVillageHealth. From December to January, Jupiter recorded a 263 percent increase in number of visitors at the site, to 3.5 million.