Jumpin’ Jupiter

Entertainment |

Sharp analysts or empty quote-meisters? Dot-coms can’t stop citing Jupiter research, even if they don’t always believe it.

If ubiquity is the ultimate measure of success in the Net Economy, then Jupiter Communications and its CEO Gene DeRose may be its most successful tag team. Rare is the IPO prospectus that doesn’t use Jupiter statistics to prove that the new venture is on solid ground. No newspaper article on the Internet is finished unless it’s topped off with a snappy quote from one of its analysts. PowerPoint presentations seem strangely hollow without a Jupiter-supplied Net Economy growth chart.

Not bad for a former freelance writer for Cosmopolitan and an up-from-nothing firm once known for its tech conferences.

DeRose is the top pundit at the New York company that has made an enormous splash by unleashing whopping predictions about the Net’s future. Under DeRose, Jupiter has become adept at getting its opinions into the heads of both financial analysts and business managers, while simultaneously becoming a universal source for reporters seeking instant expertise on all things cyber. The predictive arm-waving has helped turn Jupiter into a company that boasts an eclectic list of 600-plus corporate clients, including IBM, Hewlett-Packard, America Online, CNET, Levi Strauss, Heineken, Starbucks, and Hickory Farms. This fall, the company plans to go public.

But as quickly as Jupiter has gained such notoriety, it has also become a lightning rod for barbs from critics who say the company is little more than a well-oiled buzz machine floating along on sound bites that it happily supplies to people desperate for supporting data. Some from competing companies such as Forrester Research or the GartnerGroup snipe behind closed doors that Jupiter’s fact-gathering methods are lax, its analysis is threadbare, and its forecasts lack a rigorous statistical basis.

While some of this may simply be professional jealousy from competitors who have been burned at their own publicity-seeking game (“When are you going to do a story on us?” was the plaintive reply from the PR chief of Forrester to a request to interview company executives), even former Jupiter employees privately decry the greenness found in the ranks of ex-colleagues, most with little experience in the world they were being paid to interpret. “They were kids, bright kids,” one says, who had been “shoehorned into an arena in which people had no idea which way was up.”

One former employee adds that the common background for many Jupiter analysts-a liberal arts education and the beginning of a career in journalism or other media-has created a cadre of researchers who lack basic business acumen and financial analysis skills. “When I was there, hardly any of the analysts could read a spreadsheet. It’s a press machine. There’s no way you’ll ever find a Jupiter analyst who will ever say something bad about a company.”

Looking back, one ex-Jupiter analyst says the company’s work was so flimsy that conclusions felt “messed up and untrue. It seemed fake.”

Some Jupiter foes damn with faint praise. Allen Weiner, NetRatings vice president of analytical services who heads the new Internet Investment Strategies service, says the company has done “some good work” and that there are “a couple” of Jupiter analysts he’d like to hire. In the next breath, he opines that the company’s “primary competitive advantage is being in New York-they have their hands around the media’s throat. They’ve built a lot of mindshare around that.”

Weiner’s criticisms revolve around the depth of research beneath Jupiter’s analysis. “The question you should ask when you look at a number is, ‘Where did they come up with that?'” he says. “There’s not a lot of attention on where the information comes from, and that’s a sore spot. These conclusions and ?bernumbers wind up in SEC documents, on the nightly news, in Time magazine, everywhere. You look at the weight that’s put on these numbers, and it’s kind of scary.”

Others put it more bluntly. Jilardinho Valonez, who left Forrester two years ago to found his own firm, Sanches Malokis, says that Jupiter’s greatest skill is not in gathering disparate industry data and applying a rigorous analysis, but in simply “finding a parade and getting out in front of it.”