Online US newspaper revenues to reach $1.4 billion in 2005

MUMBAI: Revenues for online newspapers in the US grew faster than the overall online ad market in 2004 and are on a pace to do it again this year, according to a new eMarketer report Online Publishing.



Online newspaper publishers saw revenues zoom 38 per cent last year, and the first-half performance this year signals similar gains this year.

Revenues are expected to reach $1.4 billion this year. They will touch $2.26 billion in 2008. eMarketer's report describes several key drivers behind publishers' online gains. Internet users are increasing their consumption of online content, and in particular, online news. Meanwhile, advertisers are beginning to turn their attention to online channels. With big advertisers cautiously shifting their budgets online, newspaper publishers provide a 'safer' environment for many advertisers, with trusted, known parent companies and predictable content.



eMarketer's editorial director and the report's author Ezra Palmer says, "The online publishing sector is positioned to grow strongly through this year and into next. Consumption of online news is increasing. Ad spending still significantly underplays the online channel, and brand advertising has yet to truly make itself felt. Meanwhile, the heavy costs of establishing an online presence are in the past."



However strong these gains may appear they are important to keep in perspective. The $1 billion mark is no small achievement but it was passed long ago by portals—Yahoo!, Google, AOL and MSN alone generate more than eight times as much advertising revenue as the entire online newspaper industry.

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