$23 million plus some debt seems like a small price to pay for Jupiter Research, once one of the bigger names in the analyst industry. It should help Forrester’s stock price to continue its upward curve, which has seen it rise from $26 in April to $34 today.
However, it’s also an end for Jupiter. It never really seemed to have a solid niche, as was reflected by the different names the business has taken since its IPO in 1999: Jupiter Communications, Jupiter Media Metrix, Jupitermedia, JupiterKagan, Jupiter Research and now Forrester. Its media profile has declined, leaving the owners eager to accept the first reasonable offer. We agree with DealBook that this has to be seen as part of the recent, recession-driven, consolidation in the tech sector. While $23 million is better than the dot-bomb fire-sale value, it’s still on the low end.
Furthermore, this deal isn’t so special. According to David, Forrester’s “goal is to create a dominant marketing & strategy research organization that will become the indisputable leader in our industry.” Don’t believe the hype. Jupiter’s strong point is ‘connected B2C’ (online and mobile consumer research) and, more broadly, the Internet and emerging consumer technologies. Both are areas where Forrester is already stronger than some competitors. And, as valleywag has pointed out, Jupiter didn’t have a clear edge on Forrester’s research quality. Nor do we see Jupiter having the edge on Business Technology, as Jonny suggested.
Even so, Jupiter’s purchase is not “business at usual”, to take Carter‘s phrase. It’s a sign of the times: recession is making the owners of analyst firms, and especially venture capital funds, keen to the turn their investments into liquid funds. While Forrester’s stock price has risen 70% over the last six month, the NASDAQ has been flat (and even trending down in June and July).
Nor is it a highly risky purchase for Forrester. Recession also reduces labour mobility. It partly suppresses the risk to Forrester that Jupiter analysts will move on quickly. For that reason, and because of Jupiter’s small size and concentration in a few Forrester locations and practice groups, we don’t echo Carter’s comment suggesting integration issues. All Jupiter staff will be offered positions, easing the most obvious fears. Jupiter clients will be migrated over.