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The free, fully advertiser-supported model for web-based news begins to take shape with recent acquisitions 5/18/07

Posted by Steve Boriss in Acquisition, Advertising revenues, News Associators.
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Based on the vision of the future of news presented elsewhere on this site, a role I call “News Frameworkers” will ultimately develop. These will be the companies that provide the hardware, software, and services that enable those who actually generate and edit the news content to reach and interact with their audiences (early, current day examples include Google News, YouTube, MySpace, Blogger, Photobucket, and Digg). But, in order for News Frameworkers to operate, they need a source of revenue — a tall order given current web users’ expectations that everything ought to be free. The answer is an advertiser-supported business model similar to newspapers and broadcast TV news in which News Frameworkers find a way to expose visitors to advertising. That’s what the recent acquisition activity of Google, Microsoft, and Yahoo is all about. They are snatching-up a variety of companies with expertise in developing, selling, and distributing web-based advertising, primarily to support their own sites. But, as long as they are developing this advertising expertise to support themselves, will they also make this expertise available to others as a separate business? Publishing2.com says “yes,” but I suspect that ultimately these advertising techniques will be easily understood and copied by others, many of whom may be more adept at it or have better access to specialized resources. For the time being, I’d expect that these companies will find a lot more value in building their web presence and audiences, developing core competencies in acquiring and mining information about their visitors for their own use.

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