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Jupiter cuts deals with NetRatings

The research firm settles a patent dispute with its rival and sells parts of its European business to gain the cash it needs to fund operations.

Jupiter Media Metrix on Tuesday settled a patent dispute with rival NetRatings and sold parts of its European business, steps that will give it additional cash to fund operations in the face of continued losses.

NetRatings will pay $15 million for Jupiter's patents on computer-use tracking. In addition, it purchased Jupiter's European contracts for Web measurement, along with various related assets, for $2 million in cash.

The deals came as Jupiter reported revenue of $10.8 million for the first quarter, down sharply from $29.6 million last year. The Internet research and measurement company posted a net loss of $48.4 million, or $1.35 a share, a slight improvement over last year's net loss of $54.2 million for the same period.

New York-based Jupiter has struggled to stay afloat as many of its customers have closed shop in recent years. The company has tried to shore up its funds by selling parts of its business.

NetRatings, meanwhile, has been on a buying spree to take advantage of financial weakness in the market. On Monday, it bought @plan, a Net advertising measurement tool, from Net marketing services company DoubleClick for $18.5 million in cash and stock.

Last month, NetRatings purchased Jupiter Media Metrix's AdRelevance advertising research division for about $8 million. The company also inked deals to promote its ratings more prominently, including ranking sites for the Webbys.

In a separate announcement Tuesday, NetRatings bought ACNielsen eRatings, a joint venture between NetRatings and ACNielsen, a traditional market research firm. The company, which previously owned a 19.9 percent stake in eRatings, purchased the remaining stake for $9.6 million in stock. eRatings provides audience statistics on international Web sites.

Tuesday's legal settlement ends litigation between NetRatings and Jupiter relating to Jupiter patents 6,115,680 and 5,675,510, according to a statement. After NetRatings purchases those patents, Jupiter will pay NetRatings $125,000 per month from July through September 2002 and $375,000 for the fourth quarter 2002 to license the technology. Going forward, it will pay $1.5 million in 2003; $1.75 million in 2004; and $1 million from Jan. 1 to June 30, 2005.

The settlement follows a failed acquisition deal earlier this year. In February, NetRatings rescinded its offer to buy Jupiter for $71 million partly because of antitrust scrutiny from the Federal Trade Commission.

"This settlement and the sale of our European Internet audience measurement assets are appropriate steps that enable us to strengthen our overall financial position while we continue to pursue strategies that enhance value for our shareholders," Jupiter CEO Robert Becker said in a statement.