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Online – Intro

Intro

By the Project for Excellence in Journalism

In 2006, the Internet as a platform for news continued to expand and mature, with more options offered to citizens than ever before. But with that have come nuances, some shaking out, and signs that not all elements of online news are growing equally.

Those nuances are even clear in the audience patterns. After a decade of growth, the online news audience for now has reached a plateau, despite the increase in the number of people with high-speed connections.

One reason may be new technologies, such as RSS, podcasting and mobile phones, which may not get added in the audience count. But the audiences for those remain small. It may just be that not everyone will move as eagerly to the Web for news as did the earlier generation of users.

The traffic is also not evenly distributed. Newspaper Web sites are growing more than others — something that seems to offer promise for the papers in the long term, but for now eats away at newspaper revenue.

News Web sites also found reason for concern in online advertising revenues. They are still small relative to other media, and while they continued to grow by roughly a third last year, experts now think the growth rate is beginning to slow — even down to single digits this decade.

There are increasing questions, too, about how advertising really works on the Web. Some advertisers are demanding more for their money — including more proof of the audience numbers and knowledge about who they are and what they are looking at. There are growing questions, too, whether advertising online works in the same complementary way with news as it does elsewhere. Is Web advertising more like the yellow pages — its own destination, independent of news than, say, a commercial break on a TV show,?

Those questions grow in significance in part because the Web — for all its sense of a democratic medium — showed more signs of the dominance of the big companies in 2006. The most popular sites for news remain the domain of large corporations. And new players, like You Tube, are quickly bought up — evidence that the giant players do not want to let another Google, a company some of them once could have bought, emerge in their midst.

It remains difficult to know the actual levels of investment in online journalism. The best indications are that the old media continued to get more serious about it in 2006, a trend we recognized in 2005. One study, from a leading journalism school, suggests online news divisions are more interested in recruiting employees with traditional news skills, such as copy editing, rather than technology skills like programming. That is something of a change. But it is clearly in its early days. The great question is what will happen if the news companies continue to cut because of declines in their old business model.

As for the public’s view, after a three-year slide a majority of Americans say they once again trust the content on the Internet. But the phenomenon labeled Web 2.0, the participatory side of media, remains a wild card. There is no doubt it is growing, and most traditional news sites are beginning to see it is a complement in some ways, not merely a threat. But the question remains: Will advertisers be willing to market their products on sites with news content that may not be verified? After two decades of declining trust in the media, is Web 2.0 the solution that reverses the trend — or a continuation that brings down the house?