Business analytics vendor Experian is paying $240m for internet marketing intelligence developer Hitwise, which uses information from ISPs to help clients monitor the performance of their web sites.
While the purchase price is six times Hitwise’s annual sales, Experian believe it will provide an essential tool to cash in on the swing to online advertising. It quotes the Interactive Advertising Bureau as estimating that total US online advertising spend will grow by about 20% a year to reach $32bn by 2010.
Nottingham, UK-based Experian specializes in databases that helps companies’ relationships with customers, ranging from credit references to demographics.
The Hitwise acquisition will become part of its marketing solutions business. Hitwise collects and aggregates information from ISPs on how over 25 million consumers use and search the internet. It reports on nearly a million web sites a day and allows companies to benchmark their web sites against competitors in terms of visitor market share, visitor profiles, and time spent on sites.
Hitwise said it helps companies to determine which are the best web sites on which to advertise, which search engines drive traffic to their sites, and which key words are most effective. It has over 1,200 clients including HSBC, AXA, Google, eBay, CBS News, ask.com, Ikea, MTV, and Qantas.
In the year to March 31, Hitwise is expected to increase sales by 50% to $40m and generate a small profit. Experian expects Hitwise to grow sales by more than 40% in the year to 2008. It is expected to be neutral to earnings in 2008 and generate a post-tax double-digit return in the third full financial year.