From Wired:
<<Does Reach Really Matter?
In acquiring GeoCities on Thursday for $3.56 billion in stock, Yahoo expects to boost its perceived leadership in Internet-audience reach. But does buying another popular Internet site actually result in a new audience?
"Can you forsee a GeoCities user that doesn't use Yahoo?" asked Brian Oakes, senior Internet analyst with Lehman Brothers. "I can't argue with them, because I don't have data, but that's the biggest point of contention in the deal."
Yahoo officials cite an expanded audience reach as one of the reasons for the deal, in addition to the need for GeoCities' Web-site services to round out its portal offerings.
In briefing Wall Street analysts, Yahoo officials pointed to Media Metrix numbers, the oft-cited statistics used by companies for Internet audience data. Yahoo was running third in the December 1998 Media Metrix rankings, grabbing 48.2 percent of the Internet audience, behind America Online, at 54.5 percent, and Microsoft, at 48.4 percent.
Yahoo officials hope the GeoCities acquisition will boost them into the No. 1 slot. But such a measure is not an exact science, as witnessed by the fact that the three leaders on the Media Metrix chart each have roughly a 50 percent audience penetration rate. That points to a large degree of overlap among users.
Media Metrix acknowledges overlap between Web sites and subtracts overlapping users when projecting the number of unique users that would result from a merger between two Web sites on its list.
"We can project a combined audience by subtracting duplicated users," said Michelle Beilsmith, a Media Metrix spokeswoman.
The combination of Yahoo's 27 million users and Geocities' 18 million would result in 33 million unique users, according to Beilsmith.
This data comes from Media Metrix's regular polling techiques, which use software installed on the computers of 40,000 Web users to track their use of the Internet.
"I have to go with the Media Metrix reports, but can you make apples to apples comparisons?," asked Oakes. "And how do you value audience reach? I don't think audience reach is the silver bullet." >>
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