Nielsen: Interactive Fueling Growth, Trade Publications Lagging

In the eight months since former GE honcho David Calhoun took over as the chief executive of Nielsen Co., the research giant has focused on a reorganization that has stripped fat from its cost structure and pushed for an integration of its disparate businesses in media and marketing research and business media publishing. Talking about the company's future during a quarterly earnings call with securities analysts on Wednesday, Calhoun implied its primary growth would be coming from new interactive measurement services - especially NetRatings and Buzz Metrics - but that its trade publications would continue to lag its overall market growth.

While overall revenues rose 5% to $1.072 billion during the first quarter of 2007, that was led primarily by media research sales, which rose 7%. Consumer research climbed 5%, and business media declined 5% due to shifts in the timing of various conferences and trade shows, as well as continued softness in business to business advertising sales.



In response to an analysts question about possible divestures, Calhoun seemed to imply that Nielsen might get out of the business publishing sector if the right buyer came along. Noting that the M&A market had become increasingly "opportunistic," Calhoun said, "I'm not out trying to sell anything, but if somebody leaped and leaped big, I'd be open to something." He said that it was unlikely Nielsen Co. would divest of anything in its core media and consumer research holdings.

He said Nielsen Co.'s biggest growth would come from interactive measurement services, and cited the resent big M&A deals by major search and online companies as validation of that fact. Other big drivers for Nielsen Co. would come from the integration and convergence of its research products, and from new services being marketed by NielsenConnect. He described former Madison Avenue vet Jon Mandel, now head of NielsenConnect, as a "breath of fresh air" inside Nielsen Co. and said the market was already reacting positively to some of the unit's new products and services.

In response to an analyst's question, Calhoun acknowledged some concern from new measurement services being launched by various digital set-top players such as Nielsen and EchoStar's alliance with Google, but indicated they would be additive to the marketplace and would not threaten Nielsen's core "currency." He also said Nielsen would compete with new product offerings in the digital set-top arena.

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