1. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 1
The big bang: Revenue will surge ahead, aided
by strong advertising and demand
IBISWorld Industry Report 51913b
Internet Publishing and
Broadcasting in the US
February2011 CaseyThormahlen
2 AboutthisIndustry 14 International Trade 28 Technology Systems
2 Industry Definition 15 Business Locations 28 Revenue Volatility
2 Main Activities 29 Regulation Policy
2 Similar Industries 17 CompetitiveLandscape 29 Industry Assistance
3 Additional Resources 17 Market Share Concentration
17 Key Success Factors 30 KeyStatistics
4 IndustryataGlance 17 Cost Structure Benchmarks 30 Industry Data
18 Basis of Competition 30 Annual Change
5 IndustryPerformance 19 Barriers to Entry 30 Key Ratios
5 Executive Summary 19 Industry Globalization
5 Key External Drivers 31 JargonGlossary
6 Current Performance 20 MajorCompanies
8 Industry Outlook 20 Google Inc.
10 Industry Life Cycle 21 Amazon.com
22 Yahoo! Inc.
12 ProductsMarkets 24 Apple Computer Inc.
12 Supply Chain 25 Facebook
12 Products Services
12 Demand Determinants 27 OperatingConditions
13 Major Markets 27 Capital Intensity
www.ibisworld.com|1-800-330-3772|info @ibisworld.com

2. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 2
AboutthisIndustry
IndustryDefinition This industry consists of organizations websites, internet radio, video sharing
and individuals which publish or websites and blogs (among others). This
broadcast news, videos, images or written industry does not include search engines,
content exclusively over the internet. This internet service providers or publishers
industry includes social networking of offline content.
MainActivities Theprimaryactivitiesofthisindustryare
Online video sharing and broadcasting
Internet based radio
Online news
Social networking
Online comics
Blogs
E-book publishing
Internet forums
Special interest websites
Podcasts
Themajorproductsandservicesinthisindustryare
Audio streaming services
Blogs
Forums and discussion boards
Image sharing
News
Other content
Social networking
Video streaming services
SimilarIndustries 51212 MovieVideoDistributionintheUS
Companies in this industry distribute movies and videos through offline channels.
51311 RadioBroadcastingintheUS
This industry broadcasts music and other radio programs over radio waves, rather than over the internet.
51411 NewsSyndicatesintheUS
Organizations in this industry distribute news and other information for offline publication.
51419a InternetServiceProvidersintheUS
This industry provides internet access to consumers and businesses.

3. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 3
AboutthisIndustry
SimilarIndustries 45411a E-CommerceOnlineAuctionsintheUS
Companies in this industry sell products and services over the internet.
continued
51913a SearchEnginesintheUS
Search engines direct a large portion of traffic on the internet.
AdditionalResources Foradditionalinformationonthisindustry
www.comscoredatamine.com
Comscore Datamine
www.paidcontent.org
PaidContent
www.quantcast.com
Quantcast
I
BISWorld writes over 700 US
industry reports, which are updated
up to four times a year. To see all
reports, go to www.ibisworld.com

4. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 4
IndustryataGlance
InternetPublishingandBroadcastingin2011
KeyStatistics Revenue AnnualGrowth06-11 AnnualGrowth11-16
Snapshot
$38.7bn 21.4% 6.8%
Profit Wages Businesses
$6.6bn $5.6bn 50,558
Revenue vs. employment growth Number of broadband connections
MarketShare
Google Inc. 16.7% 30 150
25
Amazon.com 125
10.0% 20
100
% change
15
Million
Yahoo! Inc. 9.3% 75
10
Apple Computer 5
50
Inc. 9.2% 0 25
Facebook 5.9% −5 0
Year 03 05 07 09 11 13 15 17 Year 02 04 06 08 10 12 14 16
Revenue Employment
SOURCE: WWW.IBISWORLD.COM
p. 20
Products and services segmentation (2011)
3% 2%
KeyExternalDrivers Forums and
9.8%
Image
sharing discussion boards 1.2%
Numberofbroadband Audio streaming
Video streaming services
connections services
TotalUSadvertising
expenditure
32.6%
Other content
Downstreamdemand
fromsearchengines 10.7%
Blogs
Priceofcomputersand
peripheralequipment
Competitionfrom
arts,entertainment
andrecreation 13.7%
Social networking
p. 5 27%
News SOURCE: WWW.IBISWORLD.COM
SOURCE: WWW.IBISWORLD.COM
IndustryStructure Life Cycle Stage Growth Regulation Level Light
Revenue Volatility Medium Technology Change High
Capital Intensity High Barriers to Entry Low
Industry Assistance None Industry Globalization Low
Concentration Level Medium Competition Level Medium
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 30

5. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 5
IndustryPerformance
ExecutiveSummary | KeyExternalDrivers | CurrentPerformance
IndustryOutlook | LifeCycleStage
Executive The Internet Publishing and the industry’s 50,558 establishments
Summary Broadcasting industry is a powerfully are non-employers who produce their
disruptive force of innovation in the own blogs, news commentary, original
distribution of media. The increasing art and videos.
penetration of broadband internet During the five years to 2016, the wild
connections and the decentralized west environment of the Internet
nature of this network have radically Publishing and Broadcasting industry
increased competition with traditional will begin to settle, becoming a
media. Internet publishing has severely mainstream media outlet nearly as
challenged newspapers, periodicals and quickly as it became a disruptive force.
print media by radically increasing the Industry revenue growth will slow to
number of “soap boxes” for people to 6.8% annually through 2016, to $53.7
billion. While revenue growth is
projected to slow, the volume of content
Advertisers will devote more of their budgets to
produced will continue its dramatic climb
over this period. The primary limiting
online outlets, spurring industry growth factor to revenue growth keeping pace is
the limited potential to monetizing that
broadcast their opinions and creativity. content; advertising is the primary source
The result has been spectacular already, of revenue for internet publishers, so
with revenue growing 21.4% annually revenue cannot continue dramatic
from 2006 to 2011. In 2011 alone, growth without similarly dramatic
revenue is expected to grow 18.8% to growth in advertising spending.
$38.7 billion. While traditional media Advertising spending in the United States
outlets have struggled with large losses, is expected to grow 2.1% annually during
this industry achieves an average profit the next five years, to $308.8 billion;
margin of 17.1%. Promisingly, this however, the proportion of advertising
technology’s benefits are reaching an budgets that is spent online is expected to
enormously wide audience through continue growing dramatically, at an
entrepreneurship. More than 90% of estimated rate of 12.0% annually.
KeyExternalDrivers Number of broadband connections Total US advertising expenditure
Consumers who use broadband Advertising is one of the most potent
connections to connect to the internet are methods of generating revenue for
better equipped to handle the data- internet publishers. When advertisers
intensive content (e.g. video streaming, increase their budgets, companies in this
large downloads and flash animation) of industry generally benefit. This driver is
the modern internet. Consumers who are expected to increase during 2011.
limited to dial-up internet access can
only access a very limited subset of the Downstream demand
content available on the internet. This from search engines
driver is expected to increase during Search engines are a major source of
2011, representing a potential traffic for internet publishers and also
opportunity for the industry. provide advertising allocation services to

6. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 6
IndustryPerformance
KeyExternalDrivers this industry. This driver is expected to This driver is expected to decrease
continued increase during 2011. during 2011.
Price of computers and Competition from arts,
peripheral equipment entertainment and recreation
The price of computers and peripheral Internet publishers compete for
equipment is negatively related to the consumers’ scarce time, which may
availability of such devices to the otherwise be spent enjoying arts,
public, particularly people with low recreation or other forms of
income. Therefore, when prices go up, entertainment. This driver is expected to
fewer people can afford to purchase remain flat during 2011; however, it
equipment to access the internet. remains a potential threat for the industry.
Number of broadband connections Total US advertising expenditure
150 15
125 10
100 5
% change
Million
75 0
50 −5
25 −10
0 −15
Year 02 04 06 08 10 12 14 16 Year 04 06 08 10 12 14 16
SOURCE: WWW.IBISWORLD.COM
Current The Internet Publishing and
Broadcasting industry has produced
universal acceptance will only come with
the aging of a generation. People over the
Performance meteoric growth during the last five age of 65 are far less likely to consume
years. From 2006 to 2011, industry internet-distributed content than
revenue is expected to grow 21.4% younger generations are.
annually, to $38.7 billion. In 2011 alone, This industry’s rise to power would
industry revenue will rise 18.8% from have been far more uncertain without
2010. Revenue figures alone actually widespread adoption of broadband
understate the influence of this industry, internet connections. Computer users
because it offers so much content for free without broadband internet connections
that in prior decades would have (i.e. dial-up subscribers) face severe
required subscription fees or newsstand practical limitations to the amount and
visits. This revolutionary stance has types of content they can consume
caused major disruptions in other online. With dial-up, streaming videos
industries, particularly those involved in are impossible and images can take a
publishing and print media. Today, long time to load, essentially limiting
internet publishing is settling in as a these subscribers to text-based content
mainstream form of media, though true and e-mail. Broadband internet

7. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 7
IndustryPerformance
CurrentPerformance connections have increased at a 22.4%
annualized rate during the last five years Industry revenue
continued
to 128.1 million today.
30
Even with excellent content and
ubiquitous access to it, the industry’s rise 25
depended on answering the question that 20
plagued the 1990’s dot-com bubble: how
% change
do you make money? For most websites, 15
the answer has been advertising or 10
subscription-based content, directly
turning user visits into much-needed 5
revenue. Online advertising is 0
considerably less lucrative on an Year 03 05 07 09 11 13 15 17
advertising-to-content basis than
traditional advertising, but the speed, SOURCE: WWW.IBISWORLD.COM
efficiency and accountability it offers is
extremely attractive for advertisers. With advertiser must display their ad for all
innocuous tracking software, advertising readers of the newspaper (or similar
networks (like Google’s AdSense system) medium). The industry produces profit
can help advertisers precisely target their equal to about 17.1% of revenue, or $6.6
customers based on income, sex, location billion in 2011; profit has been rising
and even interests. This extent of during the last five years as online
targeting represents a quantum leap over advertising has gained more acceptance
traditional advertising, in which an among advertisers.
Employmentand In addition to revolutionizing the way growth in entrepreneurs. These owner-
establishments companies advertise, internet publishing operators include self-employed bloggers,
has created an enormous number of online cartoonists, filmmakers and
employment and entrepreneurship opinion writers. The average employee in
opportunities. The number of jobs in this this industry earns an enviable wage of
industry has risen 12.6% annually to more than $47,000. Even sweeter, this
119,461 in 2011. Similarly, the number of explosion in opportunity has
establishments has risen 13.3% annually, exponentially increased the number of
to about 50,558. However, more than voices that can be heard in the media,
90% of these establishments are non- giving the public a much greater diversity
employers, reflecting an enormous of opinions and creativity.
Interneteverywhere The reach of the Internet Publishing and made broadband internet access
Broadcasting industry grew dramatically commonly available on the go. In 2011,
during the last five years, driven by consumer electronics manufacturers are
technological advancements and new offering a diverse array of products that
electronic platforms. Faster wireless provide internet connectivity where it did
internet connections, including those not exist five years ago, within TVs,
provided by cell phone carriers, have Blu-ray players and video game consoles.

8. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 8
IndustryPerformance
Industry The Internet Publishing and
Broadcasting industry will rapidly Advertisers will spend
Outlook mature during the five years to 2016,
larger portions of their
almost as quickly as it leapt into the
media as a disruptive force a decade ago. budgets online, resulting in
Industry revenue is forecast to grow at an solid revenue growth
average annualized rate of 6.8% through
2016 to $53.7 billion. Despite slowing
revenue growth, the depth and quantity relation to revenue. Wages are expected
of content produced by this industry will to rise 3.0% annually over the five years
hardly slow; revenue growth will lag, not to 2016, consuming 12.1% of revenue,
because of less content production, but down from 14.5% in 2011. The
diminishing returns to the monetization entrepreneurial spirit that drove growth
of that content. Advertising networks like early on will continue to drive the way
Google’s AdSense already distribute the industry uses resources. While the
advertisements alongside website number of industry jobs is expected to
content efficiently and effectively, so grow 3.8% annually, the growth in the
adding more content without a drastic number of establishments will outpace it
increase in advertising budgets will cause at 5.0% annually to 64,674 in 2016.
growth to slow. Fortunately for this Experienced workers in the Internet
industry, advertisers are spending larger Publishing and Broadcasting industry
portions of their budget online. In 2012 will branch out on their own to start
alone, revenue is expected to rise 16.1% their own blogs, news websites and
to $44.9 billion. online communities. They will certainly
Profitability in the internet publishing not lack an audience: the number of
business will weaken only marginally broadband connections in the United
during the next five years, primarily due States is expected to rise 2.5% annually
to moderate increases in wages in to 145.1 million in 2016.
Unrealized The full potential of the Internet intellectual property agreements and
opportunity Publishing and Broadcasting industry the reluctance of old media content
will not be realized during the next five producers to make their content fully
years, despite its maturation. Internet available online. These content owners
publishing revolutionized the are uncomfortable releasing their
distribution of print media and news products into internet distribution for
unequivocally, but it has had more fear of reducing their own profitability,
difficulty extending that success to though they could certainly expect
television and movie distribution. The revenue and viewership gains if it was
wall holding the industry back from done in a controlled manner (i.e.
this second wave of success is avoiding piracy).
Expandinguniverse The reach of the internet universe will market products in 2011. As prices on
continue its rapid expansion during the these products come down and
five years to 2016. Internet-connected technology platforms mature, more
home electronics are becoming mass people will have access to internet-based

9. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 9
IndustryPerformance
Expandinguniverse content in a greater variety of places. operating system is encouraging cell
continued Internet-connected televisions, phone manufacturers to move away
including those built on the GoogleTV from simpler phones, because
platform, will be particularly important production of smartphones does not
in making the internet a truly universal require much more in manufacturing
medium in the United States. costs. Wide availability of broadband
Smartphone ownership will also drive internet on cell phones will unlock the
growth in this industry, driven potential for location-based services,
particularly by open source operating including location-aware advertising
systems like Google Android; Google’s and offers, further expanding the
decision to give away this mobile industry’s reach.

10. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 10
IndustryPerformance
LifeCycleStage Market potential is expanding rapidly
Technological innovations favor industry growth
Revenue is expected to grow dramatically
over the next five years
30 Maturity QualityGrowth
%Growthofprofit/GDP
KeyFeaturesofaGrowthIndustry
Company High growth in economic
consolidation; importance; weaker companies Revenue grows faster than the economy
level of economic close down; developed Many new companies enter the market
importance stable technology and markets Rapid technology process change
25
Growing customer acceptance of product
Rapid introduction of products brands
20
15
QuantityGrowth
Many new companies;
minor growth in economic
importance; substantial
10 technology change
InternetPublishing
andBroadcasting
5
E-CommerceOnlineAuctions
SoftwarePublishing
0
Shake-out DataProcessingHostingServices
RadioBroadcasting
MovieVideo
Shake-out
–5 Distribution
Decline PotentialHiddenGems TimeWasters
Crash or Grow? Future Industries Hobby Industries
–10
–10 –5 0 5 10 15 20 25 30
%Growthofestablishments
SOURCE: WWW.IBISWORLD.COM

11. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 11
IndustryPerformance
IndustryLifeCycle The Internet Publishing and rights currently provide protection to
Broadcasting industry is solidly in the other broadcasters, particularly premium
growth phase of its life cycle. During the cable television broadcasters, loosening
T
his industry ten years to 2016, industry value added is of such rules would produce outcomes
is Growing expected to climb at a 6.3% annual rate, similar to what happened with print
to $10.7 billion, significantly faster than media (these events are not included in
the growth of the overall economy. This the industry forecast). Internet
industry is a hotbed for innovation and publishing is continuously proving to be
has played a significant role in the a force for democratization of media,
life-cycle downturns of competing enabling would-be writers to distribute
traditional broadcasters, particularly in their content in ways that were once
print media (e.g. newspapers). While reserved for authors with contacts at
regulatory and intellectual property publishing firms.

12. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 12
ProductsMarkets
SupplyChain | ProductsServices | DemandDeterminants
MajorMarkets | InternationalTrade | BusinessLocations
SupplyChain KEYBUYINGINDUSTRIES
9901 ConsumersintheUS
The general public consumes the content produced by internet publishers and broadcasters.
KEYSELLINGINDUSTRIES
51121 SoftwarePublishingintheUS
This industry provides software used by internet publishers to create and publish their content.
51419a InternetServiceProvidersintheUS
Internet publishers pay companies in this industry for internet access.
51421 DataProcessingHostingServicesintheUS
Companies in this industry provide website hosting services for internet publishers.
ProductsServices Products and services segmentation (2011)
3% 2%
Image Forums and
9.8% sharing discussion boards 1.2%
Video streaming Audio streaming
services services
10.7%
Blogs
32.6%
Other content
13.7%
Social
networking
27%
Total $38.7bn News
SOURCE: WWW.IBISWORLD.COM
Internet publishers produce an extremely representing the largest and broadest
diverse array of content. The most category; “other content” websites
popular website categories (by unique include informational and special interest
visitors) are news (27.1%), social websites. The near-infinite array of
networking (13.7%), blogs (10.7%) and interests represented on the internet
video streaming (9.8%). Image sharing, ensures that just about any content type
audio streaming and discussion boards has a constituency. Social networking
are considerably less popular (3.0% or websites have been growing very quickly
less of unique visits). Other types of in popularity: the largest social network,
websites bring in 32.6% of unique visits, Facebook.com, was launched in 2004.
Demand Demand for internet publishing and generate revenue is also tied to the size
Determinants broadcasting is highly dependent on the of online advertisers’ budgets;
availability of broadband internet access contextual ads, banner ads and
and computers. The industry’s ability to interactive ads are the sole source of

13. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 13
ProductsMarkets
Demand revenue for many websites. Internet several TV networks, is routinely
Determinants publishers compete with other forms of hobbled by its owners placing
entertainment (e.g. sports, television limitations on the number of TV
continued
and hobbies) for the scarce leisure time episodes available online. Restricting
of consumers. If consumers begin the legal availability of content online
spending more time playing sports then, also tends to encourage piracy. Low
all else being equal, they will spend less likelihood of prosecution and broad
time viewing internet content. content availability encourage some
The availability of attractive content consumers to resort to online piracy of
is also a major driver of industry content (particularly movies, music
demand. Demand for video streaming and TV shows), typically through
is currently limited because content peer-to-peer file sharing services. If the
providers are reluctant to fully embrace content is conveniently and legally
internet broadcasting, for fear of available online, most consumers will
cannibalizing revenue generated from choose to purchase content through
traditional media sources like cable legal avenues, as evidenced by the
television. Hulu, a joint venture of success of Apple’s iTunes.
MajorMarkets Major market segmentation (2011)
16.8%
Household incomes
30%
under $30,000
Household incomes
over $100,000
25.3%
Household incomes
between $30,000 and $60,000
27.9%
Household incomes
Total $38.7bn between $60,000 and $100,000
SOURCE: WWW.IBISWORLD.COM
The income demographics of consumers regard to types of internet content. Blogs,
of internet-based content skew wealthier audio streaming and image sharing
than the overall population. There are websites are each visited in roughly equal
two primary reasons behind this skew in rates by all demographics.
the number of users: wealthier
consumers are more likely to have Low income
internet access at home and at work; Low income internet users are slightly
poorer consumers are more likely to more likely than average to visit social
share internet and computer access and networking websites. Social networking
have less time to spend on the internet. websites include Facebook.com,
Households with different income levels Myspace.com, Twitter.com, Tagged.com
have different consumption patterns with and LinkedIn.com. This demographic is

14. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 14
ProductsMarkets
MajorMarkets less likely than average to visit special Huffingtonpost.com, and TMZ.com.
continued interest and informational websites. Middle income internet users are more
Lower income internet users are also the likely than most to use the internet as an
most likely to access the internet via informational and news resource, and
mobile phones, because computers and commonly use it to access reviews and
high speed internet connections can be research products when making
difficult to afford on a consistent basis purchasing decisions.
for this demographic. The major social
networking websites (i.e. Facebook and High income
Twitter) are optimized for mobile High income internet users are more
internet access, which makes it easy for likely than average to visit news websites,
this demographic to keep in touch with as well as forums and discussion boards
friends at all times. like Reddit.com, Digg.com and Ivillage.
com. This demographic is slightly less
Medium income likely to visit video streaming (Youtube.
Middle income internet users are more com, Metacafe.com, Hulu.com) and
likely than average to visit special special interest websites. High income
interest and informational websites like internet users are less burdened by
Wikipedia.com, IMDb.com, WebMD.com expensive traditional media
and CNET.com. This demographic is also subscriptions (e.g. cable TV); therefore,
slightly more likely to visit news websites they are less likely to seek out free
like MSN.com, CNN.com, Foxnews.com, content online.
InternationalTrade This industry is not involved in the broadcasting is a global enterprise
international trade of any goods or however, with US sites attracting visitors
services. Internet publishing and from non-US addresses on a regular basis.

15. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 15
ProductsMarkets
BusinessLocations2011
West
AK
0.0 New
England
ME
Mid- 0.1
Great Atlantic 1 2
Lakes NY 3
WA MT ND 16.4
5 4
2.8 0.1 MN
Rocky
0.1 0.9
WI
OR Mountains SD
0.1
Plains 0.2 MI
1.2
PA
1.1
6
7
0.8 ID IA OH 9 8
0.1 WY 11.7
0.1
NE
0.1
IL IN WV VA
3.5 0.2 4.8
West NV
1.4 0.0
KY
UT MO
0.3 NC
0.3
1.0 CO KS 0.2 0.4
2.3 0.3 TN
SC
Southeast
0.5
CA 0.0
22.7
OK AR GA
0.4 0.1 AL 3.1
AZ MS 0.0
0.6 NM
0.1 Southwest 0.1
TX LA
0.1 FL
3.7 3.0
West
HI
0.2 AdditionalStates(as marked on map) Revenue(%)
1 VT 2 NH 3 MA 4 RI Lessthan3%
0.1 0.2 5.5 0.0 3%tolessthan10%
10%tolessthan20%
5 CT 6 NJ 7 DE 8 MD 9 DC
2.4 4.3 0.2 1.1 1.2
20%ormore
SOURCE: WWW.IBISWORLD.COM

16. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 16
ProductsMarkets
BusinessLocations The Internet Publishing and
Distribution of revenue vs. population
Broadcasting industry is most heavily
concentrated in the West and Mid-
30
Atlantic regions. The West produces
26.7% of industry revenue, while the
Mid-Atlantic produces 24.3%. The Great 20
Percentage
Lakes and Southeast region are the next
largest, with 16.9% and 12.5% of
revenue, respectively. California is the 10
most productive state for this industry,
generating 22.7% of revenue. New York
comes second, with 16.4% of revenue. 0
Ohio (11.7%), Massachusetts (5.5%) and
West
Great Lakes
Mid-Atlantic
New England
Plains
Rocky Mountains
Southeast
Southwest
Virginia (4.8%) round out the top five
states in this industry by revenue. The
states with the highest concentrations of
industry revenue all have wide
availability of broadband internet Revenue
access, which is a major infrastructure Population
requirement for the consumption of this SOURCE: WWW.IBISWORLD.COM
industry’s services. States with low
levels of broadband internet access, penetration into rural states could
particularly rural states like Wyoming or significantly change the geographic
Montana, have a very small presence in landscape of this industry during the
this industry. Increasing broadband five years to 2016.

17. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 17
CompetitiveLandscape
MarketShareConcentration | KeySuccessFactors | CostStructureBenchmarks
BasisofCompetition | BarrierstoEntry | IndustryGlobalization
MarketShare The four largest companies in the company that has a particular product or
Concentration Internet Publishing and Broadcasting technology in the hopes of improving
industry control about 45.2% of industry their existing offerings or to safeguard
revenue. Low start-up costs, minimal against patent lawsuits. Yahoo, AOL and
Level
barriers to entry and the industry’s other internet content holding
Concentration in this
appeal to hobbyists create an companies prefer to acquire websites
industry is Medium environment that encourages the start that consistently generate popular
up of new players. content and offer significant value for
Acquisitions are a routine feature of generating advertising revenue.
this industry, but they rarely have a Facebook is a fast rising competitor in
significant effect on concentration. this industry and an increasingly
Major companies like Google or important force in the distribution of
Facebook may purchase a smaller internet media.
KeySuccessFactors Developing a clear niche essential bridge from a website’s initial
Websites live and die by the loyalty of growth phase until it develops a way to
their fans and their ability to keep them monetize its traffic.
I
BISWorld identifies interested in the site. Successful websites
250 Key Success cultivate a unique culture and Producing content currently
Factors for a continuously appeal to their user base. favored by the market
business. The most Internet users can be extremely fickle.
Word of mouth recommendations Keeping fresh content that is currently
important for this
Word of mouth recommendations are an popular with users is a crucial element to
industry are: invaluable way to build up a website’s user a website’s survival.
base. Websites that can successfully get
users to talk to their friends about the site, Attracting advertisers
especially offline, tend to grow faster. Advertising is a major source of industry
revenue. Unless a website can convince
Access to investment funding users to pay subscription fees or sell
For many websites, investment funding merchandise, websites must attract
(e.g. venture capital funding) is an advertisers to generate revenue.
CostStructure The Internet Publishing and Broadcasting operators and employees engaged in
Benchmarks industry is highly profitable, reaping marketing or writing; growth in these
about 17.1% of revenue as profit. The cost employee segments have diluted the
of labor was once the most costly expense impact of higher wage employees
for this industry, but this has declined involved with IT, database management
substantially over the last five years. In and software development. This trend
2006, wages consumed 28.9% of industry is expected to continue during the five
revenue, with the average employee years to 2016, with wages falling to just
earning $64,000. In 2011, wages will 12.1% of revenue.
account for 14.5% of revenue and workers In 2011, purchases will be the largest
will earn $47,000 on average. Industry expense for companies in this industry,
wages have fallen over this period due to at 15.0% of revenue. This expense
growth in the number of small time includes computer equipment, software,

18. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 18
CompetitiveLandscape
CostStructure and office supplies. Industry operators expenses related to their operations.
Benchmarks routinely purchase new computers and Most companies in this industry spend
software to replace obsolete equipment an average of 12.4% of revenue on
continued
and keep software up-to-date. Spending advertising expenses, which they split
on new software rises particularly in between banner ads and search ads.
years in which Microsoft releases new Advertising helps increase traffic to
versions of the Windows operating their websites and can help build a
system. Depreciation consumes 7.0% of loyal user base. Sellers of digital books
industry revenue, principally accounting and music pay royalties to content
for the rapid obsolescence of existing owners, which average 6.0% of
computers. Office space rental and revenue. Companies that run
utilities account for 6.0% and 2.5% of advertising networks (e.g. Google,
industry revenue, respectively. Yahoo and Microsoft) pay about 5.0%
of the revenue they garner from ads
Industry specific expenses back to the owner of the website; this
Companies operating in different expense is referred to as traffic
segments of this industry have unique acquisition costs (TAC).
■Profit
IndustryCostsandAverageSectorCosts
■Rent
Industry
0 2.5 100%
■Utilities
Costs 17.1 6.0 7.0 37.9 14.5 15.0
■Depreciation Profit
(2011)
■Other
■Wages 3.5
AverageCosts
■Purchases
ofallIndustries 9.9 7.4 37.2 20.4 19.3
Profit
insector(2011)
2.2 SOURCE: WWW.IBISWORLD.COM
BasisofCompetition Externally, the Internet Publishing and attractive web design, ease-of-use
Broadcasting industry competes for the (website usability) and popularity among
leisure time of consumers. In this respect, other users (i.e. websites that are popular
LevelTrend the industry primarily competes against tend to get more popular and vice versa).
Competition in
other forms of entertainment including: The popularity of any individual website
this industry is recreational sports, radio broadcasting, or service often has significant impact on
Medium and the television broadcasting, tourism, the advertising rates the website is able to
newspaper publishers, book publishers, charge. Social networking websites (e.g.
trend is Steady
video game publishers and periodical Facebook) have exploded in popularity
publishers. Internally, internet publishers during the last five years by combining
compete with each other for the attention exclusive content (non-members can’t
of users by offering original content, view profiles or pictures) with socializing.

19. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 19
CompetitiveLandscape
BarrierstoEntry The Internet Publishing and
Broadcasting industry has extremely BarrierstoEntrychecklist Level
LevelTrend low barriers to entry. New entrants Competition Medium
can launch a website with just the code Concentration Medium
Barriers to Entry
for the site, cash for hosting and Life Cycle Stage Growth
in this industry are internet access fees and determination. Capital Intensity High
Low and Steady Regulation is extremely light and does Technology Change High
not inhibit new entrants. The most Regulation Policy Light
significant barrier to entry is the Industry Assistance None
development of the code or software to
build the website, which can range SOURCE: WWW.IBISWORLD.COM
from the very simple to the
exceedingly complex. A wide variety of create websites from existing
vendors offer free or by-fee services templates or toolsets (e.g. Wordpress,
that allow a website developer to Blogger, Blogspot and Tumblr).
Industry The Internet Publishing and abroad and half of Facebook’s users live
Globalization Broadcasting industry is not particularly outside the US. Google achieves its
involved in globalization. Most firms in excellent international penetration by
LevelTrend the industry are domestically owned, and striving for localized results, routinely
no products or services are traded across hiring native speakers to improve the
Globalization in this
borders. However, the borders of relevancy of their searches. In 2010,
industry is Low and traditional nation-states are essentially Google pulled its operations out of
the trend is Steady irrelevant to the internet, so users from mainland China due to privacy concerns
different countries can easily access and and security breaches relating to Chinese
enjoy the same content (unless there are censorship; for the time being, Google
licensing constraints). Google earns a serves the mainland China market from
little more than half of its total revenue servers based in Hong Kong.

20. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 20
MajorCompanies
GoogleInc. | Amazon.com | Yahoo!Inc.
AppleComputerInc. | Facebook | OtherCompanies
Majorplayers AppleComputerInc.9.2%
(Market share) Amazon.com10.0%
48.9%
Other
Yahoo!Inc.9.3%
Facebook5.9% GoogleInc.16.7% SOURCE: WWW.IBISWORLD.COM
PlayerPerformance Google is the world’s largest search
engine. Google operates in this industry GoogleInc.(USsegment)–
through its Blogger (a blogging
GoogleInc. financialperformance
platform) and Youtube.com (video
arket share: 16.7%
M sharing) subsidiaries. Google’s AdSense Revenue
IndustryBrandNames affiliate program also contributes to its Year ($ million) (% change)
Youtube.com operations in this industry. Youtube. 2005 3,745 N/C
Blogger.com com is the online video site, and the 2006 6,045 61.4
Google fourth largest website in the US by 2007 8,629 42.7
Google AdSense unique visitors (behind Google.com,
Google AdWords 2008 10,680 23.8
Facebook.com and Yahoo.com). Blogger
is the largest blogging platform, which 2009 11,116 4.1
includes Blogspot.com. Google offers a 2010 14,893 34.0
wide array of free services, including 2011* 16,137 8.4
web-based e-mail and office productivity
suites (competitors to Microsoft Office). *Estimate
Google generates 97% of its revenue SOURCE: ANNUAL REPORT AND IBISWORLD
from online advertising, chiefly through
its AdSense platform. Advertisers can also use AdSense to place
ads on websites not owned by Google, but
Strategy enrolled in the AdSense program, based
Google’s main revenue source, on the relevancy of the ad to the website.
advertising, is set up in such a way that Website owners receive a small
very little of the company’s resources are proportion of this revenue, which varies
spent maintaining and administering from site to site.
advertising sales. Google AdSense is a Google spends most of its engineering
self-serve advertising platform, allowing and software development resources
advertisers to create ads and bid for ad developing products that will be
placement independently. Google uses distributed freely, on iterative
automatic processing algorithms to improvements to its search algorithms or
approve and disapprove of ads, as well as on tangentially-related research and
to place those ads on a variety of development. Google’s focus on
advertising properties. Through AdSense, innovation has produced many of its
advertisers can bid to place ads on a most popular services, including: Gmail,
Google search engine result page (SERP) a web-based e-mail service; Android, an
for specific keyword combinations, which open-source mobile operating system;
can be further refined based on data and Chrome, a lightweight internet
Google has about the search user (e.g. browser. By giving services away for free,
location, gender or income level). Google encourages more people to use its

21. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 21
MajorCompanies
PlayerPerformance products and websites, which increases and immense size. In 2011 alone,
continued the size of its search audience and thus Google’s US operations are expected to
revenue potential. Many of Google’s generate $16.1 billion in revenue, up
products function much more robustly if 8.4% over 2010. During the five years to
users are logged-in to their Google 2011, Google’s revenue grew at a 21.7%
accounts; by using accounts in this way, annual rate, from $6.0 billion in 2006.
Google can get a much more accurate Google generates this revenue from
idea of individual users’ behaviors and search ads and “content ads,” which are
tastes, which it uses to customize the displayed next to relevant website
advertising seen by the user. content. Google’s market share has
gained rapidly during the last five years,
Financial performance primarily driven by its dominance as a
Google is truly the juggernaut in the provider of online advertising services,
Internet Publishing and Broadcasting leading to the widespread use of AdSense
industry, boasting rapid revenue growth on affiliate websites.
GoogleInc.–financialperformance
Revenue NetIncome
Year ($ million) (% change) ($ million) (% change)
2005 6,139 N/C 1,465 N/C
2006 10,605 72.7 3,077 110.0
2007 16,594 56.5 4,204 36.6
2008 21,796 31.3 4,227 0.5
2009 23,651 8.5 6,520 54.2
2010 29,786 25.9 8,857 35.8
2011* 32,933 10.6 10,355 16.9
*Estimate
SOURCE: ANNUAL REPORT AND IBISWORLD
PlayerPerformance Amazon.com is the largest online energy efficient “E ink” screen. By July
retailer in the United States. Amazon 2010, e-book sales for the Kindle
started as an online bookstore, but it outnumbered sales of hardcover books
Amazon.com soon diversified to selling DVDs, CDs, from Amazon. Amazon’s online music
arket share: 10.0%
M MP3 downloads, computer software, store, Amazon MP3, launched in 2007
IndustryBrandNames video games, electronics, apparel, as the first digital rights management
Amazon furniture and toys. Amazon competes in (DRM)-free music store.
Kindle this industry through its sale of MP3
Amazon MP3 downloads and e-books (digital books). Strategy
IMDb Amazon also owns the Internet Movie The core of Amazon’s business is online
Database (IMDb), a popular destination retail. Amazon strives to offer an
for information about movies and enormous variety of goods, acting as a
actors. In 2007 Amazon launched the true “one stop shop” for online shoppers.
Kindle, an e-book reader that uses an Competition in the online retail space is

22. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 22
MajorCompanies
PlayerPerformance extremely tight, but Amazon keeps a leg
continued up on its rivals through the diversity of Amazon.com(USmediasegment)
its products, responsive customer
service and free shipping incentives.
–financialperformance
Customers who spend more than $25 Revenue
can choose a slower free shipping option Year ($ million) (% change)
(shipping at most retailers is at least $5); 2006 3,582 N/C
customers who subscribe to Amazon 2007 4,630 29.3
Prime get free shipping on all of their
2008 5,350 15.6
purchases for a $100 annual fee.
Amazon further enhances the customer 2009 5,964 11.5
service experience by allowing reviews 2010 6,881 15.4
on all of its items. 2011* 7,775 13.0
In the digital music market, Amazon
is a potent price competitor. Amazon *Estimate
MP3 one-ups Apple’s iTunes store by SOURCE: ANNUAL REPORT AND IBISWORLD
offering music at a standard price of
$0.89 per song, compared to iTunes’ and iPad) and Google Android devices.
$0.99. Furthermore, music purchased Amazon’s Kindle is the best selling
from Amazon does not include dedicated e-reader, with its e-ink screen
restrictive DRM technology, which providing a key advantage: the Kindle
prevents users from creating copies of can easily be read in direct sunlight and
their music. Despite these advantages, does not draw power continuously.
Amazon MP3 still trails behind iTunes,
principally due to the latter’s strong Financial performance
affiliation with iPod media players. Amazon’s US media segment is
In the digital book space, Amazon expected to boast 10.0% annual
benefits from first mover advantage: revenue growth from 2006 to 2011. In
Amazon’s Kindle was the first affordable, 2011 alone, segment revenue is
portable e-book reader. Kindle e-books expected to rise 13.0% to $7.8 billion.
can be read on most internet-connected Growth since 2007 has been driven by
devices, including computers, Kindle the launch of Amazon’s digital music
e-readers, Apple iOS devices (e.g. iPhone and e-book stores.
PlayerPerformance Yahoo is the second most popular search main website (Yahoo.com) acts as a “web
engine in the US, and a major publisher portal” connecting users to their wide
of internet content. Since 2009, Yahoo variety of free services, as well as
Yahoo!Inc. has been distancing itself from the displaying links to current news stories.
arket share: 9.3%
M “search engine” label because it has been
IndustryBrandNames unable to gain ground against its rival Strategy
Flickr.com Google. Yahoo now prefers to focus on its Prior to 2009, Yahoo’s main strength was
Yahoo.com content generating properties, including search advertising, facilitated by the
Yahoo! Search Marketing Yahoo.com and Flickr.com (an image second largest customer base of search
Yahoo! Widget Engine sharing site). Flickr is the most popular engine users. Yahoo has suffered from
dedicated image sharing website continuous erosion of its search market
(Facebook is a larger social networking share (see 51913a – Search Engines) as it
website that also hosts images). Yahoo’s struggled to compete against Google.

23. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 23
MajorCompanies
PlayerPerformance Yahoo’s struggles against Google stem
continued from Yahoo’s less systematic search Yahoo!Inc.(USsegment)–
algorithms (Google’s are entirely
financialperformance
automated, whereas Yahoo allowed
advertisers to promote their websites in Revenue
line with standard results) and declining Year ($ million) (% change)
popularity of services like Yahoo Mail. In 2005 3,681 N/C
2009, Yahoo signed an agreement with 2006 4,370 18.7
Microsoft to use Microsoft’s Bing search 2007 4,739 8.4
algorithms behind the scenes for Yahoo
2008 5,190 9.5
Search. The agreement allowed Yahoo to
stop spending resources on search engine 2009 4,716 -9.1
development while still receiving a 2010* 4,898 3.9
portion of the proceeds from advertising 2011* 5,148 5.1
on the SERP. Yahoo’s strategy from then
onward has been to acquire and develop *Estimate
websites with established user bases, SOURCE: ANNUAL REPORT AND IBISWORLD
primarily generating revenue through
advertising on those sites. rejecting Microsoft’s acquisition offer,
Yahoo has periodically improved its Yahoo continued to face dwindling search
technology offerings through acquisitions. marketing share and eventually ended up
In 2007, Yahoo acquired Blue Lithium for giving Microsoft access to Yahoo Search
$300 million. Blue Lithium offered a technology anyway. During this upheaval,
combination of behavioral targeting and Yahoo’s new CEO, Carol Bartz, sold off
analysis software to help optimize investments in Gmarket (a Korean
advertising campaigns; after the shopping website) and Alibaba (a China-
acquisition, Blue Lithium was renamed based business-to-business sourcing
Yahoo! Advertising. In 2009 Yahoo faced website) to generate liquidity.
a rollercoaster of upheaval: Yahoo’s board
of directors rejected an acquisition offer Financial performance
from Microsoft, resulting in the ouster of During the five years to 2011, Yahoo is
founder and CEO Jerry Yang. After expected to achieve annualized revenue
Yahoo!Inc.–financialperformance
Revenue NetIncome
Year ($ million) (% change) ($ million) (% change)
2005 5,258 N/C 1,877 N/C
2006 6,426 22.2 732 -61.0
2007 6,969 8.5 639 -12.7
2008 7,209 3.4 418 -34.6
2009 6,460 -10.4 598 43.1
2010* 6,530 1.1 1,450 142.5
2011* 6,686 2.4 1,355 -6.6
*Estimate
SOURCE: ANNUAL REPORT AND IBISWORLD

24. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 24
MajorCompanies
PlayerPerformance growth of 3.3% to $6.6 billion, with search results; Yahoo’s internal search
continued 2.4% growth in 2011 alone. Yahoo’s technology was only in use from 2004
growth has lagged significantly behind through 2009, when Microsoft’s Bing
its newer rivals (Yahoo was founded in took over as the provider of Yahoo!
1995, Google in 1998 and Facebook in Search. Unfortunately for Yahoo, the
2004) during the last five years. technology behind search turned out to
Fundamentally, Yahoo’s vision for its be the most lucrative tool for monetizing
role on the internet has changed internet traffic, and Yahoo struggled to
fundamentally since its founding: keep up with its rival Google, which was
Yahoo’s co-founder Jerry Yang always founded with a core focus on search
wanted Yahoo to be a “portal” website technology. Under the leadership of
where users began each session on the Carol Bartz, Yahoo has decided to stop
internet. Yahoo began lagging behind fighting a losing battle over search
when search became the key technology technology, and instead focus on
behind web portals. In fact, from 2000 providing a wealth of desirable internet
to 2004, Google provided Yahoo’s content and communities.
PlayerPerformance Apple competes in the Internet
Publishing and Broadcasting industry AppleComputerInc.(iTunes
through its iTunes Store division. With
AppleComputer iTunes, users can download and manage
segment)–financialperformance
Inc. a huge range of music, movies, television Revenue
shows, podcasts or games. During the Year ($ million) (% change)
arket share: 9.2%
M
five years to 2011, Apple’s iTunes store is 2006 1,885 N/C
IndustryBrandNames
expected to boast annualized revenue 2007 2,496 32.4
Apple
growth of 25.8%, to $5.9 billion. In 2011
iTunes 2008 3,340 33.8
alone, IBISWorld expects 19.9% revenue
iPod 2009 4,036 20.8
growth for iTunes.
iPhone 2010 4,948 22.6
iPad
Strategy 2011* 5,935 19.9
Apple’s strategy with iTunes relies on two
general principles: standardized pricing *Estimate
and association with premium products. SOURCE: ANNUAL REPORT AND IBISWORLD
Early on in the evolution of iTunes, Apple
stood a hard line in negotiations with successfully lured many music lovers
record labels; record labels wanted to be away from free illegal music through
able to set prices on their albums and convenience. If record labels had instead
songs, while Apple pushed for standard been allowed to price music at parity with
pricing with minimal exceptions. In the retail CD sales, illegal distribution of
end Apple got its way, which ended up music would likely continue to dominate.
being hugely beneficial to both Apple and The second half of iTunes’ success is
the record labels. Prior to iTunes, the really the success of Apple’s portable
predominant method of acquiring digital media devices. Apple was certainly not
music was through illegal sources (e.g. the first company to release portable
peer-to-peer networks like Napster, digital music players, but it was the
Limewire or Bittorrent). By standardizing first to make them simple and easy to
music prices at $0.99 per song, Apple use. Apple’s iPhone smartphone and

25. WWW.IBISWORLD.COM InternetPublishingandBroadcastingintheUS February 2011 25
MajorCompanies
PlayerPerformance iPad tablet computer followed up on iTunes store highly visible to owners of
continued the formula pioneered by the iPod, these products. Competing services
with spectacular results. All of these like Amazon’s music store or Pandora
devices are designed to work rely on word-of-mouth or advertising
specifically with iTunes, making the to bring users into their sites.
PlayerPerformance Facebook is the world’s largest social
networking site, with more than 600 Facebook–financialperformance
million active users. Facebook was
Facebook founded in 2004 by Mark Zuckerberg,
Revenue
Year ($ million) (% change)
arket share: 5.9%
M and was the subject of the academy
IndustryBrandNames 2006 52 N/C
award-nominated film The Social
Facebook Network. Facebook is a private 2007 150 188.5
company with an estimated market 2008 280 86.7
capitalization of $41 billion. Facebook’s 2009 775 176.8
stakeholders include major venture 2010 2,000 158.1
capital firms, company employees and
2011 2,850 42.5
other institutional investors. Facebook
is expected to file for an initial public
offering in 2012. During the five years to SOURCE: IBISWORLD
2011, Facebook is expected to achieve an
estimated annual revenue growth rate of keyword in their profile or went to a
123%, from $52 million to $2.85 billion. certain school) than on traditional
advertising networks.
Origins
Facebook began as an online Strategy
equivalent of a college yearbook, with Facebook’s strategy in this industry is
the added functionality of image constantly evolving and did not
sharing and communication with other establish a clear, commercial direction
members. Initially, only students with until about 2007. Facebook’s strength is
.edu email addresses could sign up for in the level and depth of knowledge it
Facebook. By September 2006, anyone holds about its users and their friends.
over the age of 13 with a valid email Facebook can place ads based on
address could join Facebook. Since keywords in the user’s profile, the
these early days, Facebook has taken schools they attended, their political
steps to monitize the enormous level affiliation, or even on the content of
of traffic it receives, through purchases their “status updates.” Facebook is still
(often for Facebook-based games) and in the early stages of experimenting and
advertising. Facebook ads are less expanding its advertising capabilities.
likely to be clicked (click-through rate) In 2011, Facebook began experimenting
than those of other major websites, but with “sponsored recommendations,”
advertisers have a much higher degree which would highlight product or
of accuracy with ad targeting (e.g. only service recommendations made by
display ads to users who use a friends in a user’s network.