NetRatings Announces Third Quarter 2006 Financial Results

Market Wire, November, 2006

NetRatings, Inc. (NASDAQ: NTRT), a global leader in Internet media and market research, today announced financial results for the third quarter ended Sept. 30, 2006.

NetRatings' revenues for the third quarter of 2006 were $21.6 million, a 29 percent increase over revenues of $16.8 million in the third quarter of 2005. Net income for the third quarter of 2006 was $2.1 million, or $0.06 per share, on approximately 35 million shares. This compares with a net loss of ($3.7 million), or ($0.10) per share, in the third quarter of 2005, on approximately 36.2 million shares.

On an EBITDA basis (a non-GAAP measure that reflects net income/loss excluding interest income/expense, taxes, depreciation, amortization of intangibles and stock-based compensation), the company reported earnings of $3.7 million, or $0.10 per share, during the third quarter of 2006. This compares with an EBITDA loss in the third quarter of 2005 of ($2.2 million), or ($0.06) per share. A complete reconciliation of GAAP results to non-GAAP results may be found in the accompanying financial tables and footnote.

"We are extremely pleased with our performance in the third quarter, having exceeded our targets on both the top and bottom line," said William Pulver, president and CEO of NetRatings. "Strong sales results, the contribution from our patent licensing program and prudent expense management have put us on track to deliver NetRatings' first full year of profitability." Mr. Pulver continued, "We continue to make significant progress to exploit the growing product opportunities presented by the Internet and digital media. We have completed AdRelevance launches in China and Japan; our enhanced NetView product is rolling out in Europe; and we are moving quickly to deliver digital audio and video measurement solutions -- both independently as well as in conjunction with Nielsen Media Research's A2/M2 initiative."

Patent Enforcement Program

NetRatings announced earlier this month the settlement of its patent infringement action against Coremetrics, Inc. This represents the fifth licensee under NetRatings' patent enforcement program, an initiative commenced in early 2005 to protect the company's investment in its intellectual property. NetRatings recently expanded the program and has complaints pending against seven companies: WebSideStory, Inc., WhenU.com, Inc., 180solutions, Inc., TACODA, WebTrends, Inc., Digital River, Inc. and its subsidiary, Fireclick, Inc.

VNU Proposal

As previously announced on Oct. 9, 2006, NetRatings' board of directors received a proposal from VNU Group B.V. to purchase each share of NetRatings common stock that it does not currently own. A special committee with the full authority of the board of directors of NetRatings has been appointed to evaluate VNU's proposal. The special committee has retained Lehman Brothers as its financial advisor and Gibson, Dunn & Crutcher LLP as its legal counsel, and is in the process of reviewing the proposal. There can be no assurance that any agreement will result from the special committee's evaluation or negotiation of the proposal.

Guidance

For the fourth quarter ending Dec. 31, 2006, NetRatings is projecting the following:

--  Revenue is expected to be between $20.8 million and $21.2 million
--  EPS on a GAAP basis is expected to be between $0.04 and $0.06
--  EBITDA per share is expected to be between $0.08 and $0.10
    

For the full year 2006, NetRatings is projecting the following:

--  Revenue is expected to be between $80.6 million and $81 million
--  EPS on a GAAP basis is expected to be between $0.12 and $0.14
--  EBITDA per share is expected to be between $0.28 and $0.30
    

Third Quarter 2006 Conference Call

Today at 4:30 p.m. ET, NetRatings management will host a conference call and Webcast to discuss its third quarter 2006 results and outlook. The company welcomes all members of the financial and media communities to visit the "Investor Relations" area of www.netratings.com to listen to the conference call via live Webcast.

About NetRatings

NetRatings, Inc. (NASDAQ: NTRT) delivers leading Internet media and market research solutions, marketed globally under the Nielsen//NetRatings brand. With high quality, technology-driven products and services, Nielsen//NetRatings is the global standard for Internet audience measurement and premier source for online advertising intelligence, enabling clients to make informed business decisions regarding their Internet and digital strategies. The Nielsen//NetRatings portfolio includes panel-based and site-centric Internet audience measurement services, online advertising intelligence, user lifestyle and demographic data, e-commerce and transaction metrics, and custom data, research and analysis. For more information, please visit www.nielsen-netratings.com .

Safe Harbor Statement

This press release contains statements that may constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and assumptions and involve a number of uncertainties and risks that could cause actual results to differ materially from those currently expressed in any such forward-looking statements. Information about potential factors that may affect NetRatings' business and financial results is included in its annual report on Form 10-K for the fiscal year ended Dec. 31, 2005 and its quarterly reports on Form 10-Q, including, without limitation, under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors That May Affect Our Performance." Each of these documents is on file with the SEC and is available free of charge. Readers of this press release are referred to such filings. The forward-looking statements herein speak only as of the date of this press release. NetRatings does not undertake to update any forward-looking statement that may be made from time to time by it or on behalf of NetRatings.

 

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