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Ownership

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By the Project For Excellence In Journalism and the Pew Internet & American Life Project
Ownership

For this year’s State of the News Media report, PEJ has released a new interactive tool with data on the owners of the top media companies in the U.S.

Of the top 10 news websites for 2010, three are run by companies that make all of their revenue from online ventures, while the other websites all have ties to legacy media companies.  For the companies that are tied to other media sectors see the ownership sections of Cable TV, Network TV and Newspapers.

In this section, big events from 2009 relating to Yahoo, Google and AOL will be discussed. For these companies’ revenue, online audience, other financial figures and basic information, see PEJ’s Who Owns the News Media database here.

Two of these companies, Yahoo and Google, get the majority of their revenue from Online advertising, and most of that revenue is from search.

  • Yahoo and Microsoft announced that they were would be partnering on search and online ads.  All search, and thus search advertising on Yahoo, is now run on the Bing search engine platform.  Yahoo is taking the lead in selling display advertising for the two companies.  This move is aimed directly at taking on Google, which currently leads in both search and display advertising.

Microsoft, which has a partial stake in MSNBC.com and is also a top-10 news site for 2009, took steps in 2009 to take on the biggest player in the search market, Google.

  • In summer 2009, Microsoft launched its own search engine, Bing, to compete with Google.  As of fall 2009, according to Hitwise, Google was drawing 71.6% of searches, with Bing coming in third with 9.3%.  Because Yahoo searches are now run using the Bing search engine, Yahoo’s 16.1% of searches can be added to Bing’s, putting the two companies in second with 25.4% of searches in the U.S.
  • Despite Bing’s gaining ground in search, it is still a long way off from catching Google.

As mobile advertising grows (see economics section), it will become an increasingly important part of these companies’ revenue streams.  In 2009 Google took the first step in building a large mobile ad platform to complement its online platform.

  • In fall 2009, Google expanded its place in the world of mobile advertising with the acquisition of AdMob, a platform for selling and distributing mobile advertising.  Google paid $750 million in stock for AdMob, the third-largest purchase Google has ever made. Google’s largest purchase was that of DoubleClick for $3.1 billion in 20071 and its second-largest was that of YouTube for $1.65 billion in 2006. The acquisition of AdMob gives Google an already established and powerful platform to sell mobile ads, so combined with Google’s search advertising platforms, like Adsense, it is a huge step for the company.2

Of these three companies, only one, AOL, produces some of its own news content.  Yahoo and Google are aggregators that crawl the Web and compile other news content but do not produce their own.

In January 2010, AOL officially split with its former parent company, Time Warner. In the same month, AOL announced that it would drop 1,200 employees because not enough employees accepted a buyout offered earlier in 2009.3


Footnotes

1.  http://www.nytimes.com/2007/04/14/technology/14DoubleClick.html

2. Robert D. Hof, “Why Is Google Buying AdMob?” BusinessWeek”, November 9, 2009.

3. Rache Metz, “AOL to lay off up to 1,200 workers to reach target,” Associated Press, Jan. 11 2010.