Comments on: Is the Web bubble back? Ask Hitwise http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/ ... at the intersection of media, technology, business and the web Wed, 15 Oct 2008 19:00:03 +0000 http://wordpress.org/?v=2.6.2 By: Is the Web bubble back Ask Hitwise http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-96505 Is the Web bubble back Ask Hitwise Tue, 05 Dec 2006 00:28:07 +0000 http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-96505 <!--%kramer-ref-pre%-->[...] Is The Web Bubble Back? Ask Hitwise By: Mathew Ingram 2006-12-04 From the London Telegraph comes a rumour that Hitwise - one of the half a dozen web-traffic measurement companies... ...whose stats show up in press releases, and are used as fuel for takeover rumours - is itself the subject of takeover talks, with the price tag reportedly an eye-popping 180 million pounds or about $350-million (U.S.). Link: a rumour that Hitwise Joe Duck says this sounds about right if Hitwise charges its 1,200 or so clients an average of $2,500 a month for access to its data. I'm not sure where Joe gets those numbers from, but let's assume he's right. That works out to annual revenue of about $36-million, which makes the rumoured takeover price between 9 and 10 times revenue. Joe says that's "not outrageous" for an established and growing Internet company, which leads me to believe one thing - no, not that Joe is on crack, but that he has a very high threshold for outrage. I think between 9 and 10 times revenue is bubble-type math. And yes, I know that Google sells for 15 times revenue; in fact, that actually helps my case. Obviously, traffic measurement is a hot area right now, primarily because advertisers are desperate to find a way of deciding where to put their money, and websites are desperate to find a way of proving they are the right place to put it. Using page views as a metric, as Steve Rubel notes, is broken. But then, the different standards used by Hitwise and comScore and Nielsen and Alexa aren't much better. As Matt Marshall pointed out, website measurement as a whole is a train wreck. Alexa only measures users who install a browser plugin and is biased towards the U.S.; comScore uses a piece of software that has been accused of being spyware; Nielsen phones people and asks them what they do; and Hitwise uses ISP log files. What you typically wind up with is half a dozen measurements that all say something different - in some cases, one firm will show a website falling in popularity or flat, while another shows its traffic zooming. Is Hitwise any better than its competitors? Who knows. But any way you slice it, 9 or 10 times revenue is a boatload of cash. Comment Tag: Hitwise Add to Del.icio.us | Digg | Reddit | FurlView All Articles by Mathew Ingram About the Author: Mathew Ingram [note only one "t" in Mathew] is a technology writer and blogger for the Globe and Mail, a national newspaper based in Toronto, and also writes about the Web and media at www.mathewingram.com/work and www.mathewingram.com/media. [...]<!--%kramer-ref-post%--> [...] Is The Web Bubble Back? Ask Hitwise By: Mathew Ingram 2006-12-04 From the London Telegraph comes a rumour that Hitwise - one of the half a dozen web-traffic measurement companies… …whose stats show up in press releases, and are used as fuel for takeover rumours - is itself the subject of takeover talks, with the price tag reportedly an eye-popping 180 million pounds or about $350-million (U.S.). Link: a rumour that Hitwise Joe Duck says this sounds about right if Hitwise charges its 1,200 or so clients an average of $2,500 a month for access to its data. I’m not sure where Joe gets those numbers from, but let’s assume he’s right. That works out to annual revenue of about $36-million, which makes the rumoured takeover price between 9 and 10 times revenue. Joe says that’s “not outrageous” for an established and growing Internet company, which leads me to believe one thing - no, not that Joe is on crack, but that he has a very high threshold for outrage. I think between 9 and 10 times revenue is bubble-type math. And yes, I know that Google sells for 15 times revenue; in fact, that actually helps my case. Obviously, traffic measurement is a hot area right now, primarily because advertisers are desperate to find a way of deciding where to put their money, and websites are desperate to find a way of proving they are the right place to put it. Using page views as a metric, as Steve Rubel notes, is broken. But then, the different standards used by Hitwise and comScore and Nielsen and Alexa aren’t much better. As Matt Marshall pointed out, website measurement as a whole is a train wreck. Alexa only measures users who install a browser plugin and is biased towards the U.S.; comScore uses a piece of software that has been accused of being spyware; Nielsen phones people and asks them what they do; and Hitwise uses ISP log files. What you typically wind up with is half a dozen measurements that all say something different - in some cases, one firm will show a website falling in popularity or flat, while another shows its traffic zooming. Is Hitwise any better than its competitors? Who knows. But any way you slice it, 9 or 10 times revenue is a boatload of cash. Comment Tag: Hitwise Add to Del.icio.us | Digg | Reddit | FurlView All Articles by Mathew Ingram About the Author: Mathew Ingram [note only one "t" in Mathew] is a technology writer and blogger for the Globe and Mail, a national newspaper based in Toronto, and also writes about the Web and media at http://www.mathewingram.com/work and http://www.mathewingram.com/media. [...]

]]> By: Mathew Ingram http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-96051 Mathew Ingram Mon, 04 Dec 2006 01:27:58 +0000 http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-96051 Thanks for that, Markus. So I guess they keep the good data for the clients :-) Thanks for that, Markus. So I guess they keep the good data for the clients :-)

]]> By: Markus http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-96003 Markus Sun, 03 Dec 2006 23:42:50 +0000 http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-96003 Hitwise charges $20,000 a year.. Comscore charts north of $60,000 and those BS stats they release to the public aren't even related to the stats they sell customers. When you see the "real" stats they sell it ends up being close to the other services. Hitwise charges $20,000 a year..

Comscore charts north of $60,000 and those BS stats they release to the public aren’t even related to the stats they sell customers. When you see the “real” stats they sell it ends up being close to the other services.

]]> By: Mathew Ingram http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-95882 Mathew Ingram Sun, 03 Dec 2006 16:58:57 +0000 http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-95882 Thanks for the comment, Joe -- and I appreciate you giving me the context for the stats you used about Hitwise. I wasn't suggesting that they weren't valid, just trying to be cautious (reporter training :-) ). I also advised people that Google was overvalued all the way up from $80 or whatever it was, much to my chagrin. On the other hand, I don't think Hitwise is another Google by any means. In any case, I appreciate you stopping by. Thanks for the comment, Joe — and I appreciate you giving me the context for the stats you used about Hitwise. I wasn’t suggesting that they weren’t valid, just trying to be cautious (reporter training :-) ). I also advised people that Google was overvalued all the way up from $80 or whatever it was, much to my chagrin. On the other hand, I don’t think Hitwise is another Google by any means. In any case, I appreciate you stopping by.

]]> By: Joseph Hunkins http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-95880 Joseph Hunkins Sun, 03 Dec 2006 16:46:23 +0000 http://www.mathewingram.com/work/2006/12/02/is-the-web-bubble-back-ask-hitwise/#comment-95880 Mathew I think you are right that my "threshhold for outrage" has been raised quite a bit watching what many - even Silicon Valley insiders - are starting to refer to as "Bubble 2.0". My numbers were speculative, based on pitches I've had from Hitwise and from a few associates who use the service. I'd started to write a post suggesting the valuation was simply nuts, but if my numbers are close I'd say they are "shooting high", rather than "crazy". Iit seems the high stakes game is back and Hitwise is a "real" company with a solid history and good future potential. I'm not buying Hitwise shares, but also wrongly advised people to avoid Google at 100 ... 200 ... 300 ... 400 Mathew I think you are right that my “threshhold for outrage” has been raised quite a bit watching what many - even Silicon Valley insiders - are starting to refer to as “Bubble 2.0″. My numbers were speculative, based on pitches I’ve had from Hitwise and from a few associates who use the service. I’d started to write a post suggesting the valuation was simply nuts, but if my numbers are close I’d say they are “shooting high”, rather than “crazy”. Iit seems the high stakes game is back and Hitwise is a “real” company with a solid history and good future potential. I’m not buying Hitwise shares, but also wrongly advised people to avoid Google at 100 … 200 … 300 … 400

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