Who's On Second — Yahoo or MSN?

In a war of conflicting research numbers, Yahoo and Microsoft's MSN portal both claim to be the most visited portal.

In its third quarter conference call this month, Yahoo claimed the No. 2 spot behind AOL Time Warner, citing numbers from Nielsen//NetRatings that placed the Sunnyvale, CA-based portal squarely ahead of MSN with 210 million unique users in August. The company also noted that 80 million active registered members logged onto its portal in September. The company's traffic increased to a record 1.25 billion page views per day on average in September, Yahoo said, with page views likely driven largely by an increased interest in news after the terrorist attacks.

“Yahoo's global audience of active, loyal consumers continues to grow, strengthening our position as the leading Internet destination and the partner of choice for marketers and businesses,” said Jeff Mallett, Yahoo's president and chief operating officer.

Microsoft quickly countered this by putting out a press release citing research from Jupiter Media Metrix, New York, that it was the top portal with more than 270 million unique users. It also noted that the MSN Web portal is the world's top search destination with more than 32 million unique users in the United States alone.

“MSN claimed the No. 1 worldwide Web destination ranking over a year ago, and we have continued to build best-of-breed services that are not just easy or widely available, but incredibly useful services that people rely on every day,” said Yusuf Mehdi, vice president of MSN. “The growing popularity of our services such as communications, search and shopping is proof that consumers recognize the value of MSN. In particular, that consumers are using MSN Search over Yahoo, one of the pioneers in Web directories, is a great affirmation of our strategy and focus.”

MSN cited Jupiter Media Metrix numbers that identified MSN Search as the leader in the United States with more than 32 million unique users, compared to Yahoo Search's 29 million users. It also noted that consumers are spending more time on MSN than Yahoo in the United States, including total number of days and minutes online.

Yahoo complains that MSN includes metrics that it does not, such as cookies. MSN also counts misdirected searches, Yahoo said, which helps inflate its numbers.

According to Jupiter Media Metrix, MSN was the second-most visited Web site in the United States during August, trailing behind AOL Time Warner. MSN had 67.4 million unique visitors who spent an average of 151.8 minutes on the site. Yahoo ranked third, with 64.7 million unique users who spent an average of 138.8 minutes on the site.

The research firm said that MSN continued to hold the No. 2 spot in September with more than 70 million unique users spending an average of 151.9 minutes on the portal. Yahoo again ranked third, with 65.5 million unique users spending 139.8 minutes on the site.

This just goes to prove, according to Yahoo, that standards are sorely needed in the industry.

“There's no standards for the unique user number,” said Anke Audenaert, Yahoo's director of global market research. “It's confusing for advertisers. MSN counts cookies and calls them unique users, we don't.”

While the Web portals fight over who is No. 2, critics point out that it does not make a difference which research firm is used because neither is accurate. Panel-based research such as that from Jupiter and Nielsen//NetRatings is inherently unreliable, they note.

According to Ray Kingman, CEO of TopicalNet, which owns online measurement company Internet Profile Corp., while there is no foolproof way to accurately measure traffic, some methods are better than others.

The problem, Kingman said, is that the panel-based research firms routinely undercount the number of visitors to a Web site because they extrapolate from a limited set of data. He said the best way to combat this is to consult the site's Web server log, a file that lists every request made to a Web server.

“No methodology is 100 percent correct,” he said. “But I think we are the only company that is fundamentally behind consensus-based research.”

Some analysts think Yahoo and MSN rely too heavily on the number of unique users, which they note is only one in a number of metrics that should be looked at to establish a site's true traffic. Another important gauge is time spent on each site, they said.

“Unique audience is only one indicator for performance and we caution investors that it is not necessarily highly correlated with actual company revenues or gross merchandise sales,” said Mark Rowen, an analyst at Prudential Securities. “We believe the correlation between site visitors and advertising revenues has dropped significantly [for Yahoo] since late last year. Therefore, at this time we do not believe unique visitors are an appropriate gauge for expected revenue at Yahoo.”

In fact, Audenaert said Yahoo considers stickiness, the time users spend on the portal, and loyalty the most important metrics for advertisers.

“For us stickiness and loyalty are important,” she said. “Time spent is an important metric, but it's confusing. We consider it when someone is online. Some count online and offline, like when they are on AOL checking their e-mail, as time online, even though they are not online the whole time.”

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