Google has become so big that sometimes it's difficult to understand
just how big it is. It's on course to do $60 billion in revenue this
year, almost all of that from advertising. But how big is that in terms
of the media it competes against for ad dollars?
To answer that, Business Insider CEO Henry Blodget presented this slide in his keynote at Ignition 2013 this morning. It shows that Google alone is now bigger than either newspapers and magazines.
In part this is because the print media has suffered such a
precipitous decline. But note that Google's last full year results from
2012 are approaching the historic maximum that all magazines combined
achieved back in 2007 before the crash.
It's won't be long now, in other words, before Google not only
eclipses magazines but also becomes bigger than magazines ever were —
even when there was no Internet to compete with.
Newspaper Revenue
bad news about the news
As the Internet became more popular and more important in
the first decade of the 21st century, newspaper proprietors dreamed of
paying for their newsrooms by mimicking their traditional business
model in the online world. Their hope was to create mass followings for
their websites that would appeal to advertisers the way their
ink-on-paper versions once did. But that’s not what happened.
 |
Over the last decade Newspaper online revenue
almost tripled while print fell to 1/3 of peak |
The news organizations with the most popular websites
did attract lots of eyeballs, but general advertising on their sites
did not produce compelling results for advertisers, so they did not buy
as much of it as the papers had hoped. And the price they paid for it
steadily declined, because as the Internet grew, the number of sites
offering advertising opportunities assured that “supply” outstripped
“demand.” Advertising revenues for the major news sites never amounted
to even a significant fraction of the revenues generated by printed
newspapers in the golden age. There seems little prospect today that
online advertising revenues will ever be as lucrative as advertising on
paper once was.
The other online innovation that has devastated
newspapers is
Craigslist, the free provider of what the newspapers call
“classified advertising,” the small items in small print used by
individuals and businesses for generations to buy and sell real estate
and merchandise, and to hire workers. Twenty years ago classifieds
provided more than a third of the revenue of
The Washington Post. Craigslist has destroyed that business for the
Post and every major paper in the country.
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