ComScore Buys Software Startup MdotLabs, Keeps Madison Office

MdotLabs has been acquired by ComScore for an undisclosed price, just 14 months after the Madison, WI, startup was formed.

MdotLabs created software, AdSecure, to help digital publishers and online advertisers verify Web traffic by sifting out bogus visits by click farms and other fraudsters. The company raised $1.25 million in November from Chicago Ventures, New York-based Great Oaks Venture Capital, and angel investors.

MdotLabs grew to 12 employees, with offices in Madison and Palo Alto, CA, before it inked the deal announced today with Reston, VA-based ComScore (NASDAQ: SCOR).

“It did move quite quickly,” said MdotLabs co-founder and chief scientist Paul Barford. “When we founded the company last June, we were reaching out to prospective customers and really were sort of taking them through an education process about the issue and the severity and the impact on the brands who are paying the bills. And then, really sort of last fall, the community really began to recognize and embrace the issue.”

ComScore and MdotLabs started talking a few months ago, Barford said.

“We felt it was a great DNA match between the two companies and that joining forces with them was going to be a way that we could really accelerate the objectives that we had, both from the perspective of the company in general and the technology in particular,” Barford said.

ComScore, founded in 1999, provides digital audience and advertising analytics to publishers and advertisers. It went public in 2007 and has more than 1,000 employees worldwide.

ComScore was attracted to the non-human traffic detection software developed by MdotLabs, which the parent company views as complementary to its own detection methods, said Andrew Lipsman, ComScore vice president of marketing and insights.

“They had a different approach,” Lipsman said. “It’s like an additional layer of security.”

That’s crucial, since fraudulent Web traffic has become one of digital advertisers’ biggest headaches, Lipsman said. Non-human clicks can represent more than half of the traffic for many advertising campaigns, ComScore president and CEO Serge Matta said in a press release announcing today’s acquisition.

“The issue of [non-human traffic] is a cat and mouse game,” Lipsman said. “As soon as you develop a solution, there’s something else. It’s really important to attack the issue from as many angles as possible.”

ComScore was also impressed with the quality of MdotLabs’ team of engineers and data scientists, Lipsman said. Indeed, Madison economic development officials can rest easy—the entire MdotLabs staff will join ComScore and the local office will continue operating. Lipsman declined to comment on the prospects for growing the Wisconsin staff.

Barford said he will become ComScore’s chief scientist and will take a leave of absence from his role as computer sciences professor at the University of Wisconsin-Madison.

“One of the most exciting aspects for me was the opportunity to help to bring a large, publicly-traded tech company’s presence to Madison,” Barford said. “I think this is a big win for the university, and Madison, and the state of Wisconsin.”

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