Web Numbers: What’s Real?

BusinessWeek Online:

Meebo, is an easy-to-use service that has solved one of instant messaging’s nagging problems: the inability to communicate with people who use an IM service other than yours.

The company is going gangbusters. It has raised $3.5 million and attracts almost a million people every day, who swap more than 60 million messages.

There’s just one hitch: founder Seth Sternberg has a hard time proving the site is as popular as he says it is.

The dirty little secret of Silicon Valley is that no one knows exactly who is going where on the Web. That flies in the face of the impression that online advertising is the most dependably trackable ad medium of all time, a big reason spending on Web ads is expected to grow 33% this year, to $16 billion.

But confusion over traffic measurement could cast a chill over the Web 2.0 craze. Valuations for startups such as Facebook Inc. and YouTube Inc. appear to be doubling every few months, but those numbers are based on traffic figures that could be misleading.

Some observers expect that in time a variety of metrics, such as time spent online, will be applied to different services until one measurement that combines a set of factors can emerge. Until that happens, though, the Internet will have to deal with the discrepancies. And Web metrics, like company valuations, will remain a crapshoot.