Globalisation now comprehends the movement not just of physical goods,
but also services, finance, people, information and ideas. As a result the
world is becoming ever more interlinked putting pressure on global, national
and local governance systems designed in a previous era by those with power and
influence at the time and, as trade agreements are negotiated, even now.
Technology continues to play an important role in communication, entertainment
and improving productivity. Convergence is leading to the merging of computers,
cell-phones, hi-fi, TV and other electronic devices, as well as the blending of
cable, wireless and satellite communication. The rise of outsourcing services
in countries such as India and the Philippines is underpinned by improvements
in the global telecommunications infrastructure.
The Internet plays a key role in all of this. Industry players are extremely active in producing new products and services, forming joint ventures or acquiring companies. Competition is fierce, particularly to gain access to the huge advertising revenues forecast. Litigation, protection of intellectual property and crime are all major challenges.
In the sections below, we list some of the key statistics and
developments for the two years prior to December 2007. To see how this fits
into our global outlook, we refer you to our
World overview. For more
recent information, we suggest you refer to the
MBendi Blog: Signposts to 2020 and the
twice monthly
MBendi
Newsletters.
We have only commented on company results which point to an industry
trend.
Google continued to grow strongly. In November 2006, Mindshare and
Initiative forecast that Google UK revenues would exceed those of Channel 4 in
2006 and of ITV1 within 18 months. Carat believes it could happen earlier. In
December 2006, Google closed its Answer service. Of 85 Google products, only 5
provide significant revenue. In December 2006, Google upgraded staff share
plans. In February 2007, Google reported revenues for 2006 more than double
those for 2005. In September 2007, Google announced plan to increase its staff
complement by 33%, mostly in Europe.
By contrast, Yahoo had ups and downs. In September 2006, Yahoo reported
weakness in online advertising would affect earnings. In December 2006, Yahoo
announced management reorganisation. In January 2007, Yahoo posted a 61% drop
in quarterly profit but said new advertising system nearly ready. In June 2007,
Jerry Yang replaced Terry Semel as head of Yahoo. In October 2007, Yahoo
reported a 20% increase in advertising revenue. In November 2007, Yahoo warned
that non-performing European businesses will be closed or sold if they don't
perform by end 1Q2008.
Microsoft, AOL and Ebay tried to keep up with the industry leaders. In
August 2007, Microsoft reorganised its Internet business with separate heads
for selling advertising and for bringing traffic to website. Advertising
revenue at AOL rose 46% in 3Q2006 and in September 2007, AOL announced it is to
relocate to New York to be closer to the advertising industry. In October 2007,
Ebay wrote down the value of Skype by US$ 1.4 billion and the Skype founder and
CEO resigned. In June 2007, Expedia announced plans for a share buy-back.
The traditional media industry also battled to cope with the ongoing
competition from the Internet. In February 2007, reporting Pearson results, the
CE announced that new online FT initiatives form a major part of the company's
growth strategy. In June 2007, the Wall Street Journal reorganised its
editorial management. In September 2007, Rupert Murdoch mooted making the
online Wall Street Journal free though later he had a rethink. In October 2007,
FT.com announced a new pay model allowing 30 free views per month and then a
charge per page viewed. This was a response to the New York Times shifting to
an advertising driven model and Rupert Murdoch promising no charging for Wall
Street Journal. In October 2006, the Tribune Group announced its newspaper
profit had declined as a result of reduced movie advertising.
Outside the newspaper industry, in March 2007, Publicis announced plans
to expand newly acquired Digitas internationally to increase the amount of
advertising done online. In March 2007, the BBC announced plans to put
advertising on its website to offset lower licence fees. In March 2007, HMV
announced it expected physical music sales to decline 26% in the next 3 years.
For more information on Internet and the Media, we refer you to our
pages on:
Footnote: If you are aware of any highlights we have missed, please
contact us
with details.
