IT'S FUNNY BECAUSE IT'S TRUE Nielsen chief David Calhoun on innovation as a value: "We are still far off. We still have lots to do internally before we move to innovation." [PC]

Nielsen isn't just playing defense against attacks from, say, benign outlets like ourselves. Rather the clients who fund its operations – and its rumored IPO hopes – are lashing out at the problem-plagued ratings service.

"Nielsen is in a fight for its relevant life," says Tracy Scheppach, SVP of ad giant Starcom Worldwide.

Which is why its chief, David Calhoun – Fortune "Rising Star," former GE vice chairman, and Jack Welch protege – is on the defense.

While he's pleasing his private equity bosses – revenues are up 11 percent from 2006, operating income up 19%, and he's on track to double Nielsen's profits in five years – clients, who range from TV networks to Coca-Cola (who use Nielsen's services to measure product reach and marketing effectiveness), aren't thrilled with the direction things are going, as Richard Siklos reports.

Calhoun, who has "injected energy and competitive fire into Nielsen," also slashed budgets; he's outsourced tech operations, for instance. Which might explain why Nielsen is having a hard ass time delivering on its promises.

He's also carrying a debt load that commands $700 million in interest each year, leading to speculation he might pawn the publishing (Hollywood Reporter, Mediaweek) and tradeshow units. (Calhoun denies it.)

At the close of Nielsen's second annual leadership retreat last month, in Ft. Lauderdale, Calhoun reminded his minions "that Arthur Nielsen and his son built their business on integrity - a 'Nielsen code' of impartiality, thoroughness, and accuracy. And in their role as caretakers of that legacy, nothing less than the future of honest commerce is at stake."

The search is on to find one part of that sentiment still alive.

Already bogged down with its current responsibilities of finding out how many people are watching a particular TV show, Nielsen chief David Calhoun wants to take on a new gig: Tracking how many people are watching a particular TV show on their computers.

If you've been flying stand-by, let us fill you in: Nielsen fancies itself as the arbiter of all-things media consumption, and they want to put a statistical figure on all the ways you might catch Saturday Night Live. (From the screen in the back of a cab? We're sure they're working on it.)

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