Nielsen Buys Majority Stake In BuzzMetrics

The nascent buzz-monitoring industry underwent a major consolidation Tuesday, with announcements that BuzzMetrics merged with former competitor Intelliseek, and that VNU's Nielsen had acquired a majority stake in the newly constituted company. All deals are expected to close within 30 days; the purchase prices were not disclosed.

Combined, BuzzMetrics and Intelliseek, which owns the popular real-time blog watch BlogPulse, will give VNU instant entry into the budding field of word-of-mouth measurement. The newly formed Nielsen BuzzMetrics boasts a client list including Canon, Comcast, Ford, General Motors, HBO, Kraft, Microsoft, Nokia, P&G, Showtime, Sony, Target, and Toyota, 14 of the top 15 pharmaceutical companies, and eight television networks.

Jonathan Carson, BuzzMetrics' existing CEO, who will serve as CEO of the new VNU unit, said that adding the intelligence of Nielsen's other units will help the company scale its services. "It's a truly huge endeavor to try and capture everything on blogs, e-mail list serves, message boards, social networking sites, podcasts, video blogs," he said. "Then it's an equally huge endeavor to understand and measure that data."

Steve Rubel, a technology and public relations blogger and strategist, estimated that the deal will lead to a more disciplined non-mainstream media buying market--and, in turn, greater return on investment for marketers.

"This is a real signpost that consumer-generated media and mainstream media measurement need to be under one roof," said Rubel. "When you can get these services from one vendor, it makes it easier for marketers," he said, adding: "We're going to see all sorts of integration that we haven't even thought of yet."

Now that nearly half of adult Internet users use the Web to express their views on and visions of the world--according to The Pew Internet & American Life Project--VNU has gradually increased its investment in consumer-generated media measurement.

Last February, the Dutch company acquired an equity interest in the Israeli-based media and linguistics analytics firm Trendum. In September, Trendum acquired BuzzMetrics, opting to hold onto the BuzzMetrics name.

With BuzzMetrics, Trendum got a client list of about 70 Fortune 1000 companies. Upon the acquisition, Max Kalehoff, BuzzMetrics vice president of marketing, told MediaDailyNews that Trendum and BuzzMetrics shared few clients.

Trendum integrated its language-mining and search tools into BuzzMetrics' monitoring system. Prior to the acquisition, BuzzMetrics used its own proprietary technology for text-mining--a key component of buzz measurement.

But, in contrast to Trendum's acquisition of BuzzMetrics--a deal that brought two unique technologies together--there is little that differentiates BuzzMetrics and Intelliseek beyond theit client lists. This has led some in the industry to view the more as a pure consolidation play.

"Unlike the BuzzMetrics/Trendum deal, no new capabilities seem to come out of this," said Jim Nail of consumer-generated media measurement rival Cymfony. He added that the acquisition bodes well for the CGM measurement business, and that consolidation and the shaking out of less successful players signals maturation.

Intelliseek will retain its existing staff of about 60, according to a company statement. In 1999, VNU acquired Nielsen Media, which includes the television ratings unit--and in 2001 added AC Nielsen, which tracks consumer goods trends. VNU also owns a majority stake in Nielsen//NetRatings.

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