Tracking Web Traffic.

ARMED WITH A NEW WAY TO MEASURE THE VISIBILITY OF WEB SITES, L.A.-BASED WORD OF NET IS GETTING READY TO TAKE ON INDUSTRY GIANT MEDIA METRIX IN A HIGH-STAKES CONTEST TO SATISFY THE DEMAND FOR ONLINE MARKETING DATA

FOR most of the life of the Web, Media Metrix Inc., a New York Internet measurement firm that dispenses data on which sites are most visited, has become the online equivalent of the Nielsen television ratings.

Internet companies, Wall Street and the press all use Media Metrix's monthly rankings to determine which sites are doing well, and anyone wanting additional data about the rankings pays a substantial fee to Media Metrix.

Now, a Los Angeles firm has developed a Web-traffic measuring stick it characterizes as a more accurate way to determine the effectiveness of a firm's Internet presence. And it hopes to not only displace Media Metrix as the de facto authority on Web traffic but to exploit the online market by keeping clients abreast of their Web competition.

Sherman Oaks-based Word of Net Inc. has developed a program that allows companies to measure their Internet presence beyond the mere number of hits received by a site, and record where they rank in three categories: search engine keywords, online directory category listings, and links to other sites.

"Measuring online visibility we define to mean all the points of presence that your site has on the Web that could be encountered by a prospective client," said Word of Net Chief Executive Eric Sanders. "When you measure traffic, all that you're measuring is effect; that is, how many people went through your turnstile. We're launching technology that is scientifically based, measuring cause."

Entering a URL into the company's "visibility index" retrieves information from search engines and online directories, processes the data, and use proprietary formulas and algorithms to rank the site's visibility. Users can choose to gauge the visibility of one site or compare specific sites, including industry leaders.

Change of direction

The launch of the new business is not slated to occur until late September. Word of Net plans to charge clients for data gleaned from the visibility index, as well as sell the data to third parties such as marketing services. In addition, clients can pay for "visibility reports," instant updates when a competitor's visibility index rises above theirs and why. (Sanders declined to disclose the firm's fee structure.)

Word of Net is unusual in that it's remaking itself after three years of growth doing something quite different. The company was started in October 1996 by Tracy Grand, wife of Paul Grand, co-founder of Web design firm Digital Planet, now part of iXL Enterprise Inc.

Essentially, Word of Net was an early online public relations agency, with Tracy Grand writing press releases for clients and posting them in Internet chat rooms. The firm's services expanded into performing more sophisticated Internet marketing and its client roster grew quickly to include companies such as Mattel Inc., Sony Inc., DirecTV, Tickets.com and CareerPath.com. Its revenues grew quickly, from $200,000 in 1998 to $512,000 in 1999.

But running a service agency, even on the Internet, is labor intensive, and Paul Grand, having sold Digital Planet, was seeking a new venture. "By any definition, a service agency is human-powered labor. It's very labor intensive and it's a hard business model to scale and to value," Sanders said. "Since the new model is technology-based, it's much easier to scale."

The company actually jettisoned most of its clients in its legacy business at the end of 1999, keeping only a few "who refused to be cut off," Sanders said.

Several of those clients have helped beta-test the new business model, and will be working with Word of Net. Keeping a strong presence on the Net "is an ongoing challenge because search engines and directories change how they process information all the time," said Mary-Kay Demetriou, senior marketing director at CareerPath.com. "It's become a more and more difficult task over time because there are more sites, and people have become more clever in using sites. (Word of Net) is reacting to the way the business industry is changing. I look at this as an evolution in Internet marketing."

Word of Net has received two rounds of venture funding, totaling $1.75 million, from Tech Coast Angels, and is now talking to several venture funds about getting an additional $2 million.

"This is a very valuable marketing device," Sanders said. "If one of your competitors is now more visible because of a key phrase they've just entered on their site, wouldn't you want to know about it?"

Ratings game

Indeed, the potential for creating a better way to measure the prominence of a site could be huge. Media Metrix has become an Internet powerhouse in its own right, as witnessed by its agreement last month to buy Internet-research company Jupiter Communications Inc. for around $340 million in stock.

Although the company's stock price has come down since the spring tech sell-off, Media Metrix shares were still selling above $30 as of last week. Media Metrix has vaulted to the top of the Internet ratings game by persuading thousands of Internet users to install special software tracking every online move they make, much like the television-viewer families that determine the ratings monitored by Nielsen Media Research.

But Media Metrix and competitors such as Nielsen/Net Ratings record only unique visitors per month, meaning a person's visit to a site counts only once, even if more than one visit per month has been made. "It's sampling, is what it is," Sanders says of Media Metrix. "They're saying that if 90,000 people on the Web do something, everyone is doing it too."

Spotlight

Word Of Net Inc.

Year Founded: 1996

Core Business: Internet marketing

Revenue in 1998: $200,000

Revenue in 1999: $512,000

Revenue in 2000: $500,000-plus (projected)

Employees in 1996: 1

Employees in 2000:18

Goal: To become the pre-eminent tool for gauging online visibility of Web sites

Driving Force: Explosion in Internet marketing