Google Puts the Hurt on Comscore

As predicted by many Google-watchers, the “Google Trends for websites” offering that launched on the weekend was just the appetizer — an aperitif, if you will. The main course launches today, according to the Wall Street Journal, and is a website-analytics service that appears to be aimed directly at the leading analytics companies, comScore (SCOR) and Nielsen, not to mention Hitwise and Compete.com and other assorted players in the market. But the key, as the WSJ notes, is that:

“Unlike the services from comScore and Nielsen, Google’s will be offered to marketers free, according to ad executives.”

Another industry destabilized by Google’s devotion to free services, and the fact that its massive online advertising engine produces so much free cash that it can afford to offer such features for nothing (in much the same way that Microsoft’s dominance in desktop software produced so much revenue that it could afford to offer Internet Explorer for free, which cratered Netscape’s browser business). The New York Times says the service, to be called AdPlanner, is aimed at helping advertisers target their offerings better, based on an understanding of what kind of demographic is seeing their campaigns at what websites.

It will be interesting to see whether Nielsen and comScore (whose stock price had lost about 18 per cent of its value the last time I checked) will try to make the argument that Google is so large it is effectively being anti-competitive by offering such services for free. And it’s also worth considering — as some people have mentioned — that advertisers might not want to base their campaigns on data from the same company that is trying to reel them in as customers. Is the Google fox trying to convince advertisers that the henhouse is a nice place to spend the night?

At the same time, however, the numbers that come from comScore and Nielsen are notoriously unreliable, and there will be plenty of companies eager for whatever information Google can provide. Investors in comScore might want to consider having an exit strategy.

Comments

[Wez]

I'm shorting whatever the Gootch sets its sites on. Very small short interest on SCOR so room to expand, nothing but insider selling. Not very reasonably priced.

[anastos]

Roll the dice and buy some puts. This thing is in the tank by the end of this year....