Audience Measurement Companies’ Battle Hurts Entire Online Industry

comScore has released its financial results for 2011. Revenue looks rosy, but it posts a net loss thanks to legal wrangling with rival company, Nielsen – and that isn’t good for anyone.

The digital audience measurement company comScore reported its earnings for both Q4 and the whole of 2011 yesterday. Last quarter, it achieved a record revenue of $US62.6M, a 22 percent increase compared to the fourth quarter of 2010.

Unfortunately, comScore also announced a net loss of $US3.3M for the quarter, which it blames squarely on its legal battle with rival company Nielsen and the ensuing settlement.

comScore was obliged to reveal that the debacle cost the company $US7.8M in total.

Nielsen originally sued comScore in March last year for the infringement of five patents relating to the measurement and display of online content. The proceedings were the first patent suit that comScore has faced.

As part of the settlement, Nielsen also acquired around $US19M in comScore restricted stock.

The data provided by these companies and others like them is seen as largely invaluable for online retailers and marketers alike, enabling them to forecast market trends and paving the road for innovation. A certain level of competition between research organisations is generally seen as healthy, as it promotes variety and usually keeps reporting honest.

However, infighting between companies like this is not just a loss for comScore, but a loss to the entire industry, should its ability to provide accurate insights and information be impinged by its devastated financials.

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