NEWS30 October 2009

ComScore to cut workforce by 8% to fund investments

Financials North America

US— ComScore is to axe 8% of its workforce in order to maintain investment in Media Metrix 360, the hybrid web measurement solution it sees as a big growth bet for the future.

Since launching earlier this year the firm says it has 74% of the top 50 US media properties committed to using the service, which combines panel-based person-level measurement with data from ad and website servers.

“With the expected continued success of Media Metrix 360 and our opportunity to introduce new services, we plan to shift some resources to support its growth,” the company said.

Job cuts are needed to balance against investment costs, explained CEO Magid Abraham. Amid a slower-growth environment, he said the company was left with a choice of either halting investments or breaking the promises it had made to investors to maintain profit margins.

“We didn’t want to do either, so we are tightening our belts,” said Abraham. The company employs some 580 staff, according to the latest Honomichl Global Top 25 ranking. Even while trimming back ComScore said it would still be making “selective new hires in areas that hold high potential for us”. It is actively seeking a new chief technology officer to replace Greg Dale, who became chief operating officer in September.

In the third quarter of 2009 ComScore missed its revenue target. Although sales were up 4% to $31.9m the firm had been aiming for at least $32.1m in revenue for the period. Pre-tax income of $2.8m was at the top end of its guidance and was up 56% on the prior year.

Abraham said: “During the third quarter, we continued to be impacted by softness in the advertising market, and foreign currency translation. However, project revenue grew sequentially, particularly in the case of services for measuring ad effectiveness. Our subscription renewal rates also remained strong, though we continued to see higher than normal attrition among smaller customers.”

Moving into the fourth quarter Abraham said ComScore had started seeing “a noticeable improvement in order patterns and our ability to up-sell existing customers”.

Alongside its results, ComScore also announced today a deal to acquire Latin American web measurement firm Certifica. Based in Santiago, Chile, the company employs 28 people in offices throughout the region, including Mexico, Brazil, Argentina, Colombia and Peru.

Certifica founder Alejandro Fosk has been named senior vice president and general manager of ComScore Latin America following the acquisition, which is not expected to have a material impact on ComScore’s full-year revenue or earnings results. Currently, around 15% of the company’s revenue comes from outside the US.