News notes

NetRatings, Inc., New York, has filed patent infringement lawsuits against Coremetrics, Inc. and Omniture, Inc. The complaints, filed in the U.S. District Court for the District of Delaware, allege that both Coremetrics and Omniture are infringing four patents owned or controlled by NetRatings. The NetRatings patent portfolio, which relates generally to the collection, analysis and reporting of information concerning computer usage activity, includes U.S. Patent Nos. 5,675,510; 5,796,952; 6,108,637; 6,115,680; 6,138,115; 6,643,696 and 6,763,386. Four of these patents were asserted in the lawsuits against Coremetrics and Omniture.

Acquisitions/transactions

United Business Media has completed the sale of its market research business NOP World to GfK for £383 million in cash. UBM intends to return £300m of the proceeds to shareholders – all of it by way of a special dividend of approximately 90p per share. In order to maintain comparability of the UBM share price and earnings and dividend per share before and after the payment of the special dividend, the board intends to seek shareholder approval to implement a consolidation of UBM’s issued ordinary share capital. Subject to shareholder approval, the special dividend and consolidation was to be completed by the end of June.

Harris Interactive, Rochester, N.Y., has completed the sale of its Japanese operations to Minoru Aoo, former president of Harris Interactive Japan (HIJ), in a management buyout. The transaction includes the licensing rights for transitional use of the applicable Harris names and trademarks until June 2006, and for ongoing consulting services from Harris Interactive. In addition, the company has the ability in the future to work with HIJ in order to provide research services in that region to its customers. During the third quarter of fiscal 2005, Harris announced its intention to sell its Japanese subsidiaries and recorded a mostly non-cash loss of $3.3 million in discontinued operations related to the disposition. While the company did not expect the final charge to differ materially from the one previously recorded, any final adjustments were to be reported within discontinued operations for the fiscal fourth quarter ending June 30, 2005.

Millward Brown has acquired Korean research consultancy Media Research Inc. The company is headquartered in Seoul and has offices across South Korea. It will continue to be managed locally by Koo-Ho Chung and will be known as Millward Brown Media Research.

Nielsen Media Research International, New York, has acquired BBC De Media en Reclame Bank B.V., an advertising intelligence company in the Netherlands. Financial details were not disclosed.

Germany-based GfK Group has completed the acquisition health care research firm GfK V2, recently adding the remaining 49 percent of the firm to go along with the 51 percent stake it has held for nearly two years. With the companies acquired following the takeover of NOP World - GfK Market Measures, GfK Strategic Marketing Corporation and GfK V2 - GfK has organized its U.S. health care activities under the name GfK U.S. HealthCare Companies.

Separately, GfK has acquired 51 percent of the shares in Research Dynamics Inc., Toronto, and Adimark S.A. in Chile. At the same time, GfK increased its shareholding in geomarketing specialists Macon AG in Germany to 100 percent. Research Dynamics and Adimark supply information services in GfK’s custom research division.

Paris-based Ipsos has acquired Napoleon Franco S.A., a Colombia research firm with offices in Bogota, Medellin, Cali and Barranquilla. With 50 full-time employees, the company posted sales of $3.1 million in 2004.

Allied Capital Corporation, Washington, D.C., has invested $27.4 million in portfolio company MVL Group to finance a portion of its acquisition of Marketing Research Services, Inc., Cincinnati. The investment took the form of a senior secured term loan and senior subordinated notes. MVL Group is majority owned by Allied Capital.

Aegis Group plc has acquired the French market research group ARTeam, the holding company for QCG and Socioscan. ARTeam will become part of Synovate, Aegis’s research network. ARTeam is a full-service market research group based in Paris.
Separately, Aegis Group has also signed an agreement to acquire the Italian market research company AMT. The acquisition was expected to be completed before the end of June. On completion AMT will become part of Synovate.

Synovate has acquired Coral Pacific Inc., a Japanese research business. Established in 1993, Coral Pacific is a full-service firm headquartered in Tokyo.

Alliances/strategic partnerships

Jabes Market Research, a full-service market research and consulting company in El Salvador, is the newest member of the Global Network of Harris Interactive, Rochester, N.Y.

Ipsos Interactive Services Europe is now the exclusive provider of Archway, a Web reporting tool for market research studies. Now branded as Ipsos Interactive Services (IIS)-Archway and a company within Ipsos Interactive Services Europe, IIS-Archway will be managed by Per Lundgren.

Association/organization news

Jane Cook, vice president, business strategies at Frank N. Magid & Associates, Marion, Iowa, has been named president of the Marketing Research Association (MRA).

Separately, the MRA and the University of Georgia Center for Continuing Education announced Natalia Cordoba-Velasquez as the winner of the second annual Betsy Jane Peterson-Marketing Research Association Award. Cordoba-Velasquez, a database assistant for the Small Business Development Center in Aptos, Calif., demonstrated a passion for the research profession and a desire to further her education in the field. She receives an enrollment in the Principles of Marketing Research course, which is administered by the University of Georgia Center for Continuing Education.

Dimitry Pisarsky, managing director of A/R/M/I-Marketing, Millward Brown’s licensee in Russia, has been elected chairman of the Russian Association of Market and Public Opinion Researchers (OIROM).

The Advertising Research Foundation has added ING, Integration and Leo Burnett Company, Inc. to its member roster.

The Market Research Society has appointed Peter Mouncey as editor-in-chief of the International Journal of Market Research, succeeding James Rothman and Stephan Buck, who retired as joint editors toward the end of 2004.

Awards/rankings

Indianapolis-based customer loyalty management firm Walker Information was awarded a Mira Award for outstanding technology in the professional services provider category for its development of the Walker SmartLoyalty System. The Mira Awards honor organizations which have fueled the Indiana economy, brought global recognition to the state, and improved the quality of life for all residents through technology and economic impact.

New accounts/projects

Univision Communications Inc. and New York-based Nielsen Media Research have agreed to a new contract that will provide comprehensive ratings for Univision’s local television stations. Under the terms of the new contract, Nielsen will provide local ratings for the 34 Univision and TeleFutura owned-and-operated local stations through its Nielsen Station Index and Nielsen Hispanic Station Index services, which includes Local People Meter service in New York, Chicago, Los Angeles San Francisco and Dallas.

New York-based Arbitron Inc.’ s Portable People Meter (PPM) has been selected to measure radio audiences across Norway. A steering committee of Norwegian National Radio has signed a five-year contract with TNS Gallup, a member of the worldwide TNS group, to install a panel of 400 people equipped with Arbitron’s PPM system beginning in the first quarter of 2006. While other countries also use the PPM for TV audience measurement, Norway is the first country to use the system for commercial ratings for radio.

Simmons, Deerfield Beach, Fla., has signed a multi-year deal to provide Major League Baseball with access to several Simmons products offering consumer data from its National Consumer Survey. These products include the National Hispanic Consumer Survey as well as the Simmons Teens Study.

20/20 Research, Inc., Nashville, has added research firms Harper, Carol Landers Research, Campbell Hausfeld, and Lieberman Research Worldwide to its list of online software subscribers.

U.K.-based research firm ESA has been retained by Tesco Ireland to conduct its mystery shopping and customer service assessment program for a fifth consecutive year. The research will consist of traditional mystery shopping and be supplemented by ESA’s customer and competitor Question Time forums.

Beverage alcohol manufacturer Mike’s Hard Lemonade has selected Information Resources, Inc., Chicago, and its InfoBeerUSA service as its preferred provider of marketplace information, business insights and access solutions.

New companies/new divisions/relocations/expansions

MSI International, a King Of Prussia, Pa., marketing research firm, has moved to new offices, doubling its former square footage. The firm is now located at 650 Park Avenue in King of Prussia. The new headquarters accommodates 100 employees, with room for expansion.

Lightspeed Research, Basking Ridge, N.J., has opened an office in Frankfurt, Germany, headed by Gernot Pluem.

Insight Marketing Systems, Melbourne, Australia, has opened a new office in the U.S. to accommodate interest in its Research Reporter application, a market research management system. Heading up the office is Emmons Patzer, recently named vice president sales and marketing - the Americas.

FocusVision Worldwide, Stamford, Conn., has opened an office in London. The new location will provide sales, technical and project coordination services.

Company earnings reports

In results for the three months ended March 31, 2005, Greenfield Online, Inc., Wilton, Conn., reported net revenue of $15.3 million, a 77 percent increase compared to $8.6 million for the first quarter of 2004. Gross profit for the first quarter ended March 31, 2005 was $10.8 million, or 71 percent of revenue, an 86 percent increase compared to $5.8 million, or 67 percent of revenue, in the same period a year ago.

Operating income for the first quarter ended March 31, 2005 increased to $2.5 million from $0.4 million in the same period a year ago. Net income for the first quarter of 2005 increased to $2.5 million compared to $0.3 million for the first quarter of 2004. Fully tax-effected net income, utilizing a 40 percent tax rate, was $1.8 million for the first quarter of 2005.

Adjusted EBITDA, a non-GAAP financial measure, for the first quarter ended March 31, 2005 increased to $4.0 million compared to $1.3 million in the same period a year ago.

Sales bookings in the first quarter, defined as new signed contracts for online survey work, reached $19.5 million, up approximately 79 percent over the same period a year ago and up 34 percent from the fourth quarter of 2004. Bid volume, defined as the total value of online survey projects submitted for bid by clients, during the three months ended March 31, 2005 was $108 million, up approximately 69 percent over the same period a year ago and up 30 percent from the fourth quarter. As of today, second quarter backlog stands at approximately $20 million. Backlog is defined as signed contracts for online survey projects and online community orders that the company expects to complete and deliver to clients during the three months ending June 30, 2005.

In quarterly sales results, Germany-based GfK Group reported sales increased by 7.2 percent from EUR 149.9 million to EUR 160.8 million for the period ending March 31, 2005 EBIT after income from participations shows above-average growth from EUR 15.0 million to EUR 38.6 million.

The growth in EBIT including income from participations is attributable to the disposal of the 50 percent stake in IHA-IMS Health, already reported by GfK at the beginning of the year. The margin, i.e., EBIT after income from participations in relation to sales, of 24 percent was also higher than in the comparable period of the previous year. Consolidated total income after minority interests rose from EUR 6.9 million to EUR 31.1 million.

GfK’s strongest business division in terms of sales, custom research, has increased its sales by 8.7 percent, exceeding its target of 5.5 percent for 2005. However, operating profit has not yet kept pace with the positive sales growth. At EUR 2.5 million, the figure was down on the corresponding period in the previous year (EUR 3.2 million). Sales and revenue trends at U.K. and U.S.-based GfK Martin Hamblin, currently undergoing restructure, depressed results in this division.

The retail and technology division was a major contributor with above-average growth rates. Sales increased by 9.6 percent; 8.5 percentage points of the growth were attributable to organic growth. Acquisitions accounted for 2.0 percentage points. Currency effects reduced the sales growth by 0.9 percentage points. Operating profit was up by 12.1 percent to EUR 9.2 million. The margin increased overall to 19.9 percent, which is higher than in the comparable quarter of the previous year (19.4 percent).

The consumer tracking division also increased sales by 9.1 percent, of which a total of 8.6 percentage points were organic. Currency effects improved sales by 0.5 percent. Operating profit was also overproportional at +130.7 percent.

In the media division, GfK raised its sales by 3.2 percent. The sales growth was mainly organic. Currency effects accounted for 0.4 percentage points of growth. The sales growth was higher than that of the same quarter in the previous year. Operating profit of EUR 1.0 million was down on the previous year. This is due to the fact that costs for the forthcoming contract to measure radio reach in Belgium were not yet offset by revenue of a similar level. Since the division expects a major order for poster research, GfK is standing by its forecast of an overall good year for 2005.

Sales in the health care division were in line with the same period in the previous year. Organic growth amounted to 3.3 percent, but was offset by negative currency effects of the same amount. The positive trend at the health care companies in Germany and the USA was overshadowed by the restructuring of GfK Martin Hamblin Healthcare in the U.K. and the U.S.

Norway-based Firm announced revenue of $3.9 million in Q1 2005, a 34 percent increase compared to $2.9 million in Q1 2004. Firm also announced EBITDA results of $287,000 in Q1 2005, an increase from the $97,000 in Q4 2004. In 2004, Firm increased its revenue by 37 percent to $13.2 million and delivered EBITDA results of $1.1 million. The company maintains its ambition of a listing on the Oslo Stock Exchange in 2005.