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Zipping past the newspapers

Zipping past the newspapers
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First Published: Sun, Apr 17 2011. 03 55 PM IST
Updated: Sat, Jul 02 2011. 01 21 PM IST
Depending on how you look at it, this is either good news for the Internet or, as one tends to interpret these things lately, further bad news for newspapers. Last week, an industry group, the Interactive Advertising Bureau, published figures showing that, for the first time, Internet advertising in the US had overtaken newspaper advertising.
The report, prepared by PricewaterhouseCoopers Llp, said that total Web advertising in 2010 amounted to $26 billion. The miserable newspaper industry amassed $22.8 billion.
This is a development that will surprise no one. Except, perhaps, those who dismissed, a few years ago, the Internet’s ability to overtake the printed broadsheet’s ubiquity. The Internet has now emerged as much more than just a source of content or a conduit for goods and service. Social networks and search engines have fundamentally transformed the way people seek, receive and process information.
A simple Really Simple Syndication (RSS) feed reader provides vastly more choice and depth than the world’s best and most storied newspapers.
Where it scores over newspapers, from a business perspective, is in the Internet’s ability to insert highly context-specific advertising everywhere: from inside emails to overlays on videos of amusing cats or Justin Bieber.
There are further causes for concern in the report. The top 10 online ad companies accounted for three-fourths of all business in the last quarter of 2010. Companies such as Google wield tremendous influence. Search advertising, where Google dominates, drew revenue of $3.3 billion in that quarter, or 45% of total Web revenue.
Existing newspapers cannot compete for this lion’s share of the business that depends on high technology. Instead they will not only have to rethink the relevance of their print business, but also how to leverage content on the Web into revenue. The New York Times launched a paywall on 28 March and some estimates say that online readership has dropped by 20%.
Now that the battle with newspapers has been won, the Internet’s next foe is its biggest one: television. Google and Yahoo have already announced their interest in Internet TV. Rumours indicate that Apple might soon launch a connected display as well. Television companies will ignore this threat at their own peril. The collective chaos of the Web has a tendency to run you out of business.
Is newspaper advertising running out of steam? Tell us at views@livemint.com
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First Published: Sun, Apr 17 2011. 03 55 PM IST