Home' Technology Review : March April 2009 Contents FEATURE STORY
in Forbes because I thought the market was underserved, and
because they had made fewer mistakes than anyone else." (To
this day, McNamee declines to say how much he paid for how
large an equity stake.)
People still can't agree on how many readers visit Forbes.com.
"According to ComScore, we have six to seven million visitors [per
month]; our own logs say 18 to 20 million," says Spanfeller. But
while the di erence between third-party and internal measure-
ments is, for a variety of reasons, particularly striking in the case of
Forbes, confusion about the size of online audiences is universal.
No one really knows how many people visit websites. No
established third-party supplier of audience measurement data
is trusted. Internal Web logs exaggerate audiences. This matters
to more people than investors, like McNamee, who worry that
they have no way to evaluate new-media businesses. The issues
involved are technical, and occluded by ugly jargon, but they con-
cern anyone anxious about the future of media as print and broad-
cast television and radio shrink in importance.
Happily, a California startup and Google are working to mea-
sure Web audiences in new and better ways.
THE PRICE OF JOURNALISM
Why care about something as arcane as dodgy audience measure-
ment? Here's why: where content is free, as it is on most websites,
the only thing that will pay for quality journalism---or, really, any-
thing valuable at all---is advertising. For most new-media busi-
nesses, "display" or banner advertising is the main source of
operating revenues. But the general inability to agree on audience
numbers is stunting the growth of display advertising.
Every year, advertisers spend billions of dollars online;
eMarketer, a research firm, predicts $25.7 billion in 2009 in the
United States alone. Marketers study Web audiences to help them
decide which sites to spend money on: they try to divine the num-
ber of people who visit a site every month, demographic details
about those visitors, the length of time they stay on the site, the
In August 2006, when Roger McNamee invested in Forbes,
he did so in part because its Web audience was thought to be
huge. McNamee is a founder of Elevation Partners, a Silicon
Valley private-equity firm that counts Bono of the rock band
U2 as one of its managing partners; it specializes in big, bold invest-
ments in media and technology. Onstage at EmTech, Technology
Review's annual conference, he said, "Look: I'm not investing in
Forbes for its dead-trees business."
At the time, Jim Spanfeller, the chief executive of Forbes.com,
claimed that more than 15 million readers around the globe had
visited his site in February, making Forbes the world's leading
business site. He supported his boast with research from
ComScore Media Metrix, one of the two leading suppliers of third-
party tra c data for the Web. The numbers seemed safe enough:
Forbes.com's internal server logs showed even greater Web tra c.
It was embarrassing, therefore, when ComScore announced that
it had changed the methods it used to estimate worldwide audi-
ences, and that little more than seven million people had visited
Forbes.com in July. That placed Forbes's online audience below
those of Dow Jones (whose sites include WSJ.com) and CNN
Money (whose sites include Fortune). Bitchy press accounts sug-
gested that McNamee had been overcharged---if not actually
robbed---for his investment, which was variously reported at
between $250 million and $300 million.
More than two years later, McNamee claims he always knew
there were broad discrepancies between what the internal sever
logs of Forbes.com showed and what third parties reported. "To
be a headache, it would have to be surprising," he says. Instead, he
suggests, he invested with no very precise idea of Forbes.com's
audience: "I looked at every indicator that was out there. They were
all bad. In the end, I had to think about it di erently. I invested
But Who's Counting?
NO ONE REALLY KNOWS HOW MANY PEOPLE VISIT
WEBSITES. THAT'S A PROBLEM FOR THE FUTURE
OF JOURNALISM, AND OF THE MEDIA IN GENERAL.
BUT A SAN FRANCISCO STARTU P AND GOOGLE ARE
BOTH WORKING ON SOLUTIONS.
By JASON PONTIN
Photograph by TOBY BURDITT
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