ComScore, Nielsen settle patent dispute


Since the launch of Facebook in February 2004, the social network has grown to more than 750 million active users and counting. Google+ was announced on July 28 and has become the fastest growing social network with over 25 million users as of Aug. 3, according to comScore. (Jessica Sabbah/NICHOLAS KAMM/The Washington Post/Getty Images)
December 25, 2011

Two companies that track traffic on the Web settled a patent dispute last week and hinted at future collaboration at a time when media outlets and advertisers grow increasingly dependent on the Internet to reach audiences and make money.

The settlement gives Reston-based comScore ownership of four families of patents that Nielsen Holdings had challenged in March. Nielsen, however, will retain worldwide licensing rights for the patents and acquire about $19 million in comScore common stock with neutral voting rights.

The deal stipulates that neither company will file another patent lawsuit against the other for at least three years, and executives from the two competitors indicated in a news release that a partnership could be in the works.

“This agreement is supportive of and complements the substantial investments Nielsen has made in its intellectual property over the years,” Steve Hasker, president of media products and advertiser solutions, said in a statement. “It also creates an incentive for our companies to explore potential forms of collaboration to better serve our clients.”

Magid Abraham, comScore’s chief executive, added: “We believe that the agreements we have reached signal a new phase of cooperation for our companies and enable us to better deliver the innovation and value the industry needs.”

Both firms declined to comment further on the settlement.

ComScore and Nielsen use multiple tactics to track the habits of Web users, including adding tags to Web sites, conducting surveys and monitoring sample groups. They then use the information to draw conclusions about Internet users as a whole.

The rankings these companies produce offer more than bragging rights. Online advertising revenue often depends on the number of visitors to a Web site and how they engage with the content while there.

At times, that has caused a rift between companies such as Nielsen and comScore and the Web site operators, some of whom have called into question the reliability and significance of the data they collect.

But both companies have altered their research methods in recent years to more accurately reflect traffic patterns. The Media Ratings Council, an industry trade association, has been auditing those efforts. The Washington Post Co. is a member of the association.

“It’s difficult to adequately get good information for the wide range of sites that people are going to visit,” said David Gunzerath, MRC’s senior vice president and associate director. “The products have changed pretty considerably since we’ve begun the audits and generally for better I’d say.”

The size and demographics of audiences who turn to traditional media, including print, television and radio, have long been measured. But the Internet has proved more difficult to track.

The sheer size of the Web presents one hurdle. With millions of Web sites and multiple ways to access them — home and work computers, tablets and smartphones — there are many channels to monitor.

The Internet also has allowed people to become more active consumers of content. You can click on an ad, watch or pause a video or jump to another page at your own pace.

This changing dynamic has prompted three industry groups that represent Internet companies, advertisers and major consumer brands to establish standards that dictate how audiences should be measured. Sherrill Mane has been involved with that initiative, called Making Measurements Make Sense, as senior vice president for research, analytics and measurement at the Interactive Audit Bureau.

“Every time we catch up, something new comes out,” she said. “How do we handle tablets? How do we handle mobile? You have to look at this as a way to set standards.”

She said comScore and Nielsen have not been given a seat at the table because advertisers want to tell them which metrics are considered important, rather than the other way around.

“We’re trying to change the paradigm. They want their businesses to answer the needs of their clients. In a lot of ways they’re seeing this as a way [for us] to tell them what we want, which is what it is.”

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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