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Forrester acquires JupiterResearch – will the analysts stay or walk?

logo-forrester.gifForrester Research acquired JupiterResearch for $23 million in cash plus assumed liabilities. JupiterResearch joins Forrester’s Marketing & Strategy Client Group. Click here to read the press release and click here to read a blog post by analyst Josh Bernoff.

The key question for any analyst firm merger & acquisition (M&A) activity is whether the acquired analysts – the core intellectual property value – stay with their new employer or leave. For example, in the case of Gartner’s acquisition of META more than 50% of the analysts left voluntarily or through buyouts within a few months.

Our initial impression is that the JupiterResearch acquisition is more of an expansion of Forrester’s services than a consolidation move to eliminate a competitor. This is similar to Forrester’s Giga acquisition, but different from Gartner’s grab of META which was clearly a strategic move to keep META out of Yankee Group and kill a competitor. Regardless of motivation, it is still possible that Forrester will lose many of the analysts unless they execute the integration correctly.

In addition to what happens to JupiterResearch analysts, this M&A event could also impact Forrester analysts as coverage assignments might be changed. Regardless of changes in coverage or even departures of Forrester analysts, there is a high probability that analysts in the Marketing & Strategy Client Group will find their productivity negatively impacted during the transition period.

For JupiterResearch prospects and clients currently negotiating contracts or renewals it makes sense not to execute on any new contracts. If you are an existing Forrester client, you should focus on whether or not you will need to expand your Forrester contract as access to the acquired Jupiter published research and analysts might be included in the current RoleView offering. For prospects and clients of Jupiter who are not Forrester clients, the situation is much more complex as you have to weigh the potential value of a Forrester contract if the Jupiter analysts you are interested in decide to leave the merged firm.

For analyst relations (AR) professionals, this M&A event impacts your analyst lists and outreach plans. Carefully monitor changes to analyst status (employment and research) coverage of both Jupiter and Forrester analysts and adjust your plans accordingly.

There are a number of relevant Forrester and Jupiter analysts that Twitter on a regular basis (see Analyst Twitter Directory). Because of the off-the-cuff nature of tweeting, monitoring the analysts’ tweets will provide an indication of the analyst morale and other transition issues.

SageCircle Advisory clients are encouraged to schedule an inquiry to discuss what this event means to them. Contact us at 650-274-8309 or inquiry [at] sagecircle dot com.

Bottom Line: While this M&A does not appear to be focused on killing a competitor, this does not mean that ongoing access to JupiterResearch’s analysts is guaranteed. Prospects of JupiterResearch need to evaluate the ongoing business value of a new Forrester contract if key analysts leave the combined firm.

Related posts:

Forrester buying Jupiter – smart, but not a big deal

Which acqusitions in the analyst industry were winners or duds?

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11 Responses

  1. This should be great for us and our clients. See our post on the topic: http://blogs.forrester.com/groundswell/2008/07/forrester-buys.html

  2. I got the following question via Twitter:

    cselland: @carterlusher where would they walk TO?
    about 7 hours ago · Reply · View Tweet

    Typically when analysts leave a firm post acquisition they do one of the following:

    1. Join another analyst firm
    2. Hang out their own shingle (i.e., start a firm)
    3. Join a vendor

    It is rare when an analyst gets hired by IT at a large enterprise or PR firm.

    Even in this economic environment, some firms are hiring. For instance, in yesterday’s Gartner Q2 earnings call, CEO Gene Hall mentioned that expenses in the 2nd half would go up in part due to hiring some analysts.

  3. How the might have fallen 🙂

    a little memorabilia here:

    http://news.cnet.com/Media-Metrix,-Jupiter-merge-in-414-million-deal/2100-1023_3-242455.html

    as Chris points out, there’s a shortage of good analysts out there right now. Am sure Forrester will want to keep most of the analyst talent they have acquired. In addition, they can now push after the internet media space without much competition,

    PF.

  4. […] this happened (when Giga was acquired) there was initially quite a lot of hope followed by quite a few analyst movements. Time will tell what the outcome of this move will be – however, if we follow George Colony’s […]

  5. Hi Phil, Thanks for the comment.

    Great link [makes me a bit nostalgic]. What was also interesting was the number of acquistions Jupiter had made to grow.

    Trivia questions – who was an early, minority investor in Jupiter Communications? Why Gartner Group! GG made a $8m investment in the startup in Oct 97 to get a 32% stake.

  6. Josh, thanks for the comment.

    Yes, there is great potential for relief for Forrester’s overworked social media analysts. >>grin<<

    Seriously, if Forrester does a decent job on the integration, then it will turn out to be a win-win situation for the firm and its clients.

    However, history shows that successful acquistions in the analyst industry are few and far between.

  7. […] Forrester acquires JupiterResearch – will the analysts stay or walk? […]

  8. […] acqusitions in… on Forrester buying Jupiter – sma…Forrester buying Jup… on Forrester acquires JupiterRese…Forrester buying Jup… on Which acqusitions in the analy…Forrester buying Jup… […]

  9. […] this happened (when Giga was acquired) there was initially quite a lot of hope followed by quite a few analyst movements. Time will tell what the outcome of this move will be – however, if we follow George Colony’s […]

  10. […] purchase, therefore, is not “business at usual”, to take Carter’s phrase. It’s a sign of the time – that recession is making the owners of analyst […]

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