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May 27, 2008

NEWS: Web 2.0 fails to produce cash

Web 2.0 fails to produce cash

By Richard Waters and Chris Nuttall in San Francisco

Published: May 26 2008 19:18 | Last updated: May 26 2008 19:18

Many members of the Web 2.0 generation of internet companies have so far produced little in the way of revenue, despite bringing about some significant changes in online behaviour, according to some of the entrepreneurs and financiers behind the movement.

The shortage of revenue among social networks, blogs and other “social media” sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers. Together with the US economic downturn and a shortage of initial public offerings, the failure has damped the mood in internet start-up circles...

No Spring Sunshine For Cratering Newspaper Business

This shouldn't suprise anyone: Goldman Sachs estimates that newspaper ad revenue was down 10.7% y/y in April, and from its conversations with execs at the New York Times Company (NYT), Gannett (GCI) and Scripps (SSP), it's looking like May will bring more of the same, with national, retail and of course classified advertising all down.

On a combined basis, Goldman estimates newspaper ad revenue a the big, publicly traded newspaper companies will be down 12.3% in April and March combined.

The marketshare loss is most dramatic in classified advertising, down 20.3% in April.

Goldman says short-term trends could improve in the second half of 2008, with easier comparisons to last year, but don't be fooled by them. The underlying ad softness will remain the same and the cost of newsprint is expected to increase 20% per ton in the second half of 2008.

Related: Up For Grabs: $42 Billion of Newspaper Ad Revenue

Ed: Connecting the dots.

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