Nielsen (NYSE:NLSN) went private for $8.8 billion in 2006. Now the company is trading on the public markets again with a $14.9 billion market cap. That's a 70% gain since going private, while the S&P 500 increased 40% over the same period. The new Nielsen is clearly doing something right.
Nielsen COO Mitchell Habib took the stage at the recent TUCON 2013 conference to explain how new technology helped Nielsen evolve. Conference organizer TIBCO Software (NASDAQ:TIBX) turns out to have played a big part in Nielsen's transformation.
On a personal note, I was a system administrator for Nielsen before I joined the Fool. But whatever I knew about Nielsen's business and technology 7 years ago doesn't seem to apply anymore. We're talking about a pretty radical change here.
When Habib joined the company in 2007, the company tended to deliver reports to its customers with a 40-day lead time. Collect the data in early October and your customers would be happy to get their reports by mid-November.
That's not good enough in a world that moves on greased-lightning Internet time. The demands of the new era became abundantly clear when the just-appointed COO faced a potential customer mutiny.
Arr, mateys! Where's my data?
You probably know Nielsen best for its TV ratings services, but the company also provides customer data for a wide variety of other fields, such as retail sales. And Nielsen was about to lose some of its most important accounts in that sector.
Food products giant General Mills (NYSE:GIS) wanted better and faster analysis than what Nielsen could provide at the time, and threatened to go with a competing service. At the same time, both Procter & Gamble (NYSE:PG) and Kraft (NASDAQ:KRFT) set up bidding processes for their customer analysis needs. Losing three of the world's largest consumer businesses at the same time could have been the end of Nielsen's retail analytics operations.
So Habib reached out to TIBCO. Its analysis tools could deliver reports in seconds that typically took weeks to generate with traditional methods. To seal the deal, TIBCO CEO Vivek Ranadive showed up in person at Nielsen's final presentation to save the General Mills contract.
"Vivek joined us," Habib said. "He committed the company. It made a difference." A clearly committed partnership sometimes matters more than the best technology. TIBCO delivered both partnership and tech quality for Nielsen.
So General Mills stayed with Nielsen. Kraft and P&G saw the mini-drama play out and were convinced to stick with Nielsen as well. Today, consumer goods measurements account for some 61% of Nielsen's total sales. What's good enough for P&G, Kraft, and General Mills should do the job for nearly any consumer goods producer on the planet. And Nielsen gets it done with TIBCO's software -- and committed partnership.
As a former Nielsen worker bee (but not a shareholder), I'm happy to see the company doing alright in this second turn on the markets. As a TIBCO shareholder, I'm even happier to see thought leadership coming together with business leadership, creating a unique value for customers and shareholders alike. Nielsen wouldn't be the market-beater it is without a touch of TIBCO's assistance.
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