Here we are again.  As we approach Labor Day, less than three weeks after IBM announced its agreement to acquire Unica (see my blog post with Suresh Vittal here), comScore announced yesterday that it has acquired the venerable European Web analytics vendor Nedstat.

Total cash and stock consideration for the purchase is valued at approximately $36.7 million USD.  Additionally, nearly the entire Nedstat staff, numbering about 120, will stay on at comScore.

Official information is available through comScore, the comScore corporate blog, and the regulatory filing for those of you who are financially minded.  I also had the opportunity to speak with comScore CEO and co-founder Magid Abraham, who generously took time out of a very hectic day for a call.

The acquisition is predicated on the following benefits:

  • Geographic expansion. Nedstat provides an established European presence from which to serve current and prospective comScore clients in the region.
  • Product enhancement. comScore will enhance its Unified Digital Measurement (UDM) platform with Nedstat technology.
  • Deeper client relationships. The opportunity to upsell comScore’s existing client base with new and expanded product offerings.
  • Financial gains. Nedstat will enhance comScore's top line revenue immediately in 2010 and will be accretive to net income by the middle of 2011.

Let’s consider the context.  comScore is locked in a longstanding and escalating battle with Nielsen for audience measurement supremacy.  Acquiring Nedstat with the intention of leveraging onsite measurement in the UDM platform is clearly consistent with comScore’s existing strategy.  It has been busy for some time bringing together various components to bolster panel-based audience measurement with new data sources such as surveys, mobile, and now onsite measurement.  comScore is triangulating all the elements needed to execute on its strategy.

comScore has likened its strategy to that of the iPad, taking components from other established products and combining them into a new and innovative solution.  This is an aggressive and entrepreneurial approach to solving a complex problem.  It is also risky and carries execution challenges.  But the company that makes progress in reconciling audience and onsite measurement may have the opportunity to become the standard for internet measurement, and in particular a hero to advertisers and media companies the world over.

For additional insight into the strategic implications of this topic for marketers, I strongly recommend that you read the work of my colleague David Cooperstein, who’s research entitled "The Future of Media Measurement" (subscription access required) discusses the convergence of measurement across channels.

As always, in these situations my first concern is the acquired clients.  But I think in this case there are encouraging signs for Nedstat clients:

  • comScore is financially healthy and provides Nedstat with a permanent home and access to resources as part of a larger group.
  • comScore says Nedstat will continue to invest in its core products and staff.
  • comScore says it is committed to honoring Nedstat’s client relationships.
  • The deal is not huge in absolute dollar terms, but it is large enough proportionally that comScore has skin in the game and needs Nedstat to be a successful business in its portfolio.
  • comScore and Nedstat have an established history of working together via partnership and are already familiar with one another.

On the surface, the summer of 2010 appears to have seen great consolidation in the Web analytics industry.  But I think it has been a tremendous validation of the value of Web intelligence.  Rather than pursuing the consolidation play, companies appreciate the power of Web analytics and its potential to power new solutions.  Consider the varied but valid strategies of Adobe, IBM and comScore over the past year, each innovating Web intelligence from their own perspectives.  I think evolution is a better term. These deals are cumulatively moving Web intelligence up the strategic food chain, which is good for customers and vendor community alike.

What's next?  I think that despite the compelling vision of platform plays incorporating Web analytics, these opportunities take time to develop and the market will always want choice, including the option of independent vendors.  But will Nielsen and Microsoft be compelled to respond to comScore and IBM, respectively?  Who else?  I am tempted to check with my friend John Lovett, Web analytics superstar and seer, who prognosticated Nedstat's situation only a few days ago on Beyond Web Analytics!

What do you think?