Tech Companies Lose, Measure for Measure

Not long ago, Microsoft (Nasdaq: MSFT) issued a press release arguing that its MSN network had leapfrogged Yahoo! (Nasdaq: YHOO) to become the most popular family of Web sites on the Internet.

The news didn’t make much of a splash. In fact, it fell so flat that MSN re-issued the release a week later.

Soon after, a Yahoo! spokesperson quietly chided the release and noted that most major news outlets ignored it. Clearly, Yahoo! couldn’t, though. It was obvious that this report was being talked about in Yahoo-land.

See, if Yahoo! were to give up its title as the most popular Web destination, or as chief executive officer Terry Semel is now regularly calling it, “the online partner of choice,” that would put a damper on the Internet portal’s already depressed advertising revenue stream.

But the simmering dispute, which boiled over into Yahoo’s earning announcement when some analysts noticed that the usual information on page views seemed to be missing, points to a larger problem in the online world.

There is no single standard means to measure Internet traffic and activity. And it’s time there was.

Who’s Watching?

Online advertising experts say the Web will benefit from a flood of new advertising dollars if it can act more like television.

Part of that is more streaming ads. Another part is a measurement system that everyone — or at least everyone in the industry — can understand.

Instead, we get different measurements from different sources, page views over here, unique visitors here, active users from this company, time spent on the site from that firm, month-to-month growth from this one. It’s dizzying.

Now, I know the television rating system isn’t perfect. It’s a sample extrapolated to the population at large. But complaints are few, so they’re doing something right.

Tough Times

And, of course, all this comes against the backdrop of an impending shakeout for Web research firms themselves.

Jupiter Media Metrix (Nasdaq: JMXI), which by the way conducted the study for MSN, recently laid off a bunch of workers. Some pundits have already begun to question the company’s long-term viability, especially since its stock price is in the red-flag sub-dollar range.

Nielsen//NetRatings (Nasdaq: NTRT) is much stronger, by comparison. The Nielsen name helps. And Forrester Research (Nasdaq: FORR), while rumored to be in a job-cutting frame of mind itself, continues to be a standard-bearer.

Meanwhile, there are new entries into the predictions-and-tracking sweepstakes. ComScore says it has a new method that is dead-on accurate, while Compete.com recently threw itself into the fire by predicting a strong quarter for Amazon.

Easy Choice

But this isn’t about having a single company do all the research. Or even which companies you trust or don’t to tell the truth unembellished. That’s not the point. The point is to agree on a standard. And soon.

Imagine you’re an advertising campaign manager for a major international company. You get relatively easy-to-understand ratings and share figures about television networks and their affiliates.

And then you get a menagerie of confusing and sometimes downright conflicting statistics from the Internet media companies themselves.

Where do you spend your money? It’s not that hard a question, is it?

Time’s Up

The Internet advertising world knows a standard is needed, and there is talk that one is in the works. Will it be possible to get everyone on the same page regarding this problem? It won’t be easy but it has to be done.

In a perfect world, this wouldn’t be so much of an issue. E-commerce and paid services would carry the day, advertising would become merely gravy. But Yahoo! has proven that even a category leader with a brand name to die for can’t make a Thanksgiving feast overnight. So the advertising gravy must be poured on in greater amounts.

That it isn’t going to happen until the Web picks a standard and tells everyone to live with it.

What do you think? Let’s talk about it.