Internet Independent Equity Research
Internet Ad Spending Surpasses Print Media Spending
Our internet coverage focuses on companies that are well-positioned to exploit the shift from traditional print media and storefront selling to the world-wide web. 2010 will be remembered as the year that internet ad spending surpassed total newspaper ad spending. Industry estimates indicate that magazine ad spending is still more than 20 percent greater than web advertising, and that radio ad spending is still twice as large as internet ad spending. Television ad spending is still twice as large as internet ad spending, a gap we would expect to narrow dramatically in the next few years. Thus, old line media companies, such as those found in the newspaper, magazine, and television industries, are seizing upon the opportunity to increase business by exploiting the Web as a communications and advertising medium. The shift from traditional media advertising to the Web provides opportunities for companies in our coverage focused on internet advertising, decision support, and content delivery, including Google, Akamai, and WebMD.
Another theme within our internet coverage is the decline and fall of brick and mortar retail chains that are unable to keep up with changing consumer tastes, and the merchandising and inventory management and fulfillment systems required to effectively compete with their online challengers, who are unburdened by physical storefronts. Indeed, the bankruptcy filings of Sharper Image, Circuit City, Linens ‘n Things’, Hollywood Video, the Borders Group and others attest to the difficulty of competing against the virtual storefront model of ecommerce leaders, such as Amazon.com and Netflix.