[ About Us | Popular | Marcom | AdNet | IChannel | Glossary ]

Mar 15, 2008

Internet Consolidation or Fragmentation? (Long Tail Of Pages, Views, Ads?)

Fox buys Myspace. Google buys Youtube, Doubleclick, and many more companies. Microsoft wants Yahoo. AOL picks up the crumbs ;-) (Internet Giants Buy...) Is the Internet consolidating or fragmenting?

Conventional Wisdom

Conventional wisdom suggests that the large companies get bigger - and dominate mindshare. Game over.
Anecdotal reports suggest that even Top 100 publishers sell only 40% of inventory through direct means. This problem is well-illustrated by the diparity between page views and revenues: 30-40% of total Internet page views can be attributed to the 10 most trafficked domains, while ad dollars for the top 10 largest online publishers tracked by the Interactive Advertising Bureau account for approximately 70% of industry revenues. This concentration at the top is unlikely to abate in the near term. Ad networks offer one way to "spread the wealth," at the same time positioning themselves to generate revenue growth in excess of the broader market.

The top 100 includes global brands like Yahoo, Google, Fox, Microsoft, New York Times, and Time Warner. The bottom millions include most newspapers, vertical and B2B magazines, 100 million bloggers, and emerging Internet only brands from around the globe.

Is this the current trend for the Internet?

Trends toward Fragmentation

  • Bloggers produce 1.6 million posts per day; overwhelming the output from the top 100 sites. Photo and video uploads also overwhelm the output by the staff of the top 100.
  • Social networks, games, and video sharing taking mindshare away from search, email, and legacy uses.
  • Facebook and LinkedIn have out-performed Google's Orkut, Yahoo's 360, and Microsoft's Spaces. Facebook Apps has a huge lead ove Googe's OpenSocial consortium.
  • Thousands of new companies have been funded to attack digital media. Facebook Apps decrease the capital needed and reduce marketing costs to nil, for many ventures. Hundreds of start-ups have traction with millions of users.
  • In-game, in-video, and in-widget advertising takes ad revenue share from the top 100.
  • Google is losing brand publishers to Quigo. Quigo is willing to allow publishers to brand text ads and sell their own inventory.


Can iMedia companies match overall growth from just internal projects? Will new companies continue to out-perform legacy companies? Will iMedia companies continue to buy to maintain global share?

Can the industry keep up to accomodate the changing Internet?

Counting the Streams in a New Media Age - Dec 17, 2007

Media distribution is becoming fragmented much quicker than the currency can


  1. Google Sucks Life Out of Old Media: Henry Blodget | Mar. 14, 2008

    Think ad dollars are shifting online? You don't know the half of it: US online ad revenue grew $4 billion last year, US offline ad revenue grew $1 billion. Google alone grew by more than twice as much as all of offline media combined. Read

    BEWARE: Estimate and conclusion based on less than 10% of ad revenues; and no effort to remove the intra-company transfers like Google's payment to MySpace.

  2. Nicholas Carr: Google Rewiring the World

    Carr, author of "The Big Switch: Rewiring the World, from Edison to Google," likens the change in running computer systems to electricity generation...

    Consider these trends: software as media (e.g., Google) and media taking on characteristics of technology companies (e.g., NBC's entertainment "portal").

    Plus, innovation is coming from companies with far smaller staffs than their traditional counterparts. When eBay purchased Skype, the Internet telephony service had only 200 employees and served the same number of customers as BT, the British telecom service, which employed 100,000. Likewise, Craigslist publishes an online classified ad network with only 20 employees, a fraction of the number of people selling ads in newspapers and other publications.

    "Whenever you have technological and economic change of this magnitude, it's difficult to predict" what will happen, he warned.

  3. The Long Tail Effect has shifted content and views toward millions of bloggers. Soon, ad revenues will follow.


Comments accepted immediately, but moderated.

Support Our Sponsors: