SKOPOS - Internet research / panels



The Woes of Internet Research
5/5/01



Although research on and about the Internet may be the flavour of the month, research agencies in the sector are finding the going tough. Internet researcher Jupiter Media Metrix has just announced that it is to cut nearly a fifth of its staff of 864, representing a loss of over 150 jobs. This is happening at the same time as another Internet research agency Harris Interactive is reducing staff levels by approximately 70 jobs.

The cutbacks at Jupiter are part of the company’s response to what is perceived as a weakening economy and a decline in dot-com client activity. It is accompanied by a broad postponement of non-core initiatives as well. The company has recently reported a first-quarter loss, with revenues coming in at below expected targets.

Jupiter’s revenues, although rising by 8% to US$29.6 million from revenues of US$27.4 million for the first quarter of 2000, are below what the company had expected. In detail, the company’s measurement revenues rose 40% to US$14.3 million, while research services revenues climbed 19% to US$14.3 million. However, event and other revenues fell 81% from the year earlier to US$988,000, reflecting fewer events during the quarter and softer attendance and sponsorship levels at the company's forums.

In addition, Jupiter is thought to be seeking a new CEO. Tod Johnson, who agreed to stay on until a successor was found, said potential candidates for the job have been identified and the search could be completed in June or July.

Job cutbacks at Harris Interactive have also accompanied the news of the operation’s financial results for the fiscal 2001 third quarter. The company has taken the precaution of running a consolidation and cost-savings programme, partly as a reaction to what is taken to be an economic slowdown.

The company reported fiscal 2001 third quarter revenue (including revenue from the Yankelovich custom research group acquired effective from February 1, 2001) of US$15.8 million, an 11% increase compared with US$14.2 million in the third quarter of fiscal 2000. Of this, Internet revenue represented US$7.5 million or 47% of total fiscal 2001 third quarter revenue, as compared to US$6.5 million or 46% in the fiscal 2000 third quarter. Net loss was US$0.17 per share ($5.9 million), flat when compared to the third quarter of fiscal 2000.

Additionally, the company plans to consolidate its office space, reduce database development costs, and scale its telephone centre operations down to be consistent with current demand.