New Media

Ted Leonsis of AOL writes:

Many traditional media outlets are watching their audiences and their ad revenues shrink as readers and viewers switch to the Internet, followed closely by their advertisers. Offhand, I can’t think of a newly launched traditional media company that has reached scale in the last ten years, but in the last year on the Internet, sites such as MySpace and YouTube have created monster-sized audiences. Now they have to create business models to support the cost of their consuming audience.

At some point in time, new media companies such as AOL, Yahoo, MSN and Google will all look similar – with fully developed multiple media revenues from multiple sources. Today there are only four networks of scale and size in terms of business models: Google, Yahoo, AOL, and MSN. We each have 100 million plus unique visitors per month in the US. We each generate annual advertising revenues of $1.5 billion or more. And we are all very profitable. In addition, Google, Yahoo and AOL are also growing ad revenues very quickly. The number five player, however, had less than a third of the advertising revenue of any of the big four last quarter. That is just how media works – the big will get bigger as scales of economy kick in.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.