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BizReport : Research archives : October 27, 2006

Online Revenue Up, Online Readers Down

New reports from Merrill Lynch show online revenue for newspapers is up for the third quarter, but the news isn’t all good. Online readership is actually down, causing concern from some sectors.

by Kristina Knight

Between 6 and 7% of all newspaper revenue is now coming from online revenue, according to Merrill Lynch. In a statement (via MediaPost) the company said, "Even if the rapid growth continues for the next few years, we don't see online representing over 50% of newspaper ad revenues for at least a couple of decades, suggesting that industry profit could stay flat for the foreseeable future."

Research firm Outsell says the newspaper industry will drop to only a 30% share of the information industry by 2010. Newspapers currently account for 37% of the industry share. The company believes that all newspaper corporations will need to begin experimenting in order to save their readership and revenue portals.

A faster acceptance of search engines and their distribution power is key, according to Outsell. In a statement they said news companies must, “move further into lead generation, develop more pay-for-performance ad models, and increase behavioral targeting to boost ad rates.”

Search giants Google and Yahoo! are among the leading news aggregators that are changing the way traditional newspapers work and earn.

Tags: newspaper revenue, online marketing, online revenue

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