Tracking Web users into European territory
Quova, whose technology lets Web sites deliver pages based on visitors' geographic location, acquires European rival RealMapping for an undisclosed sum.
The Redwood City, Calif.-based company develops technology that can pinpoint the physical location of Net-wired devices by country, state and metro area in the United States. The acquisition "gives Quova strong, international city-level data and gives us entry into international markets much faster," said Quova Chief Executive Marie Alexander.
Technology that draws boundaries on an otherwise borderless Web is growing in importance as Internet businesses increasingly run into difficulties navigating international laws and customs. Yahoo, for example, butted heads with the French government last year when human rights organizations protested auctions of Nazi paraphernalia to French citizens via the Yahoo site.
When laws differ from country to country, geo-mapping applications can sketch lines for businesses operating in multiple areas. An international gambling operation, for example, could use the technology to block visitors to its Web site from the United States, where such business is illegal. Broadcasters could use the technology to protect the digital rights to material downloaded via the Internet. Other uses include fraud detection and regulatory compliance.
The technology also has widespread allure for marketers seeking to get closer to customers. It's promoted as a convenient mechanism for advertisers to deliver local coupons via wireless devices. Web sites can also write pages in the appropriate language by recognizing a visitor's country of origin.
But analysts say that geo-targeting applications are largely inefficient for advertisers. Marissa Gluck, an advertising analyst at Jupiter Research, said that locating a visitor's physical location is often based on finding details about that person's IP address, which is used to route signals over the Web to an individual's computer. This can be unreliable because, for example, millions of America Online subscribers are issued addresses originating in Virginia, the AOL Time Warner unit's headquarters.
"There's a lot of waste there," Gluck said.
In coming months, Quova expects to announce new capabilities within its technology that can pinpoint AOL customers' origins. The 15-month-old company also plans to secure data based on ZIP codes by the end of this year. Meanwhile, it boasts 98 percent accuracy at determining Web surfers' countries and 85 percent accuracy on the city level.
By purchasing RealMapping, the company will have a ready-to-run sales force and a credible team of engineers who understand the Internet's infrastructure in Europe, Alexander said.
With the acquisition, Quova will employ about 60 staff members and maintain about 18 clients. RealMapping will remain at its headquarters in Amsterdam under the name Quova.
Financial terms of the deal were not disclosed.
The purchase follows a $21 million investment in Quova in March from such investors as Softbank Venture Capital, IDG Ventures and VeriSign. Quova also recently launched a new version of its Internet geo-tracking product, GeoPoint 2.0.