NEW YORK — Internet audience measurement company Media Metrix said Tuesday it plans to buy Internet research firm Jupiter Communications for $414 million in stock, pairing two companies that have rapidly grown from obscurity to become juggernauts in market research and data collection for all things cyberspace.
New company, to be called Jupiter Media Metrix, will be helmed by Media Metrix chairman and chief exec Tod Johnson. Jupiter chairman and CEO Gene DeRose will become vice chairman and president of the new company. Deal will likely close within three months.
Under the terms of the deal, Jupiter shareholders will get 0.946 Media Metrix shares for each Jupiter share they currently hold. Based on Media Metrix’s Monday close of $28.25, the offer for Jupiter represented a 16% premium to its close of $23.
However, that premium fell to just 3.2% in Tuesday’s trading, as Media Metrix shares tumbled 17% to $23.38 and Jupiter sank 8.4% to $21.06.
Jeffery B. Baker, an analyst who covers Media Metrix for SunTrust Equitable Securities, said investors could be jittery about the prospect of a pure Internet player buying an essentially “brick and mortar” research biz (albeit one focused on the Web).
He maintained, however, that Tuesday’s downturn represents “a good buying opportunity for people who understand the potential of the combined entity.”
Merger, which has already been approved by the boards of both companies, will create a research powerhouse with a market capitalization of over $1 billion. Jupiter Media Metrix will also boast 1,700 clients worldwide, including such blue-chip tech and media names as Yahoo, Microsoft, AOL Time Warner, Disney, AT&T and General Electric, Johnson said on a conference call Tuesday.