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     overview

This note highlights acquisition of web sites and internet services by what has been dismissed as 'mainstream media' (MSM): print publishing and broadcast groups such as News Corporation, John Fairfax, Tribune and NBC.

     background

Acquisition by MSM groups of online businesses has occurred over the past ten years, with distinct peaks as the boom gathered pace (followed by closure or disposal of some online operations in 2000-2001) and from mid-2005.

Recent acquisition activity has been justified as addressing the emergence of niche audiences, although the supposed "demise of the mass audience" explored elsewhere on this site has not yet seen marketing towards a billion "markets of one".

Those deals centre on sites that -

• feature classified advertising and search (in particular jobs, vehicles and real estate)
• cater to niches but supposedly have the potential for broad appeal, in particular 'community networking' (aka social software sites) such as Myspace.com, which was acquired by News Corporation for US$580 million in 2005.
• allow people to play casual interactive games
• enable nonspecialists to store, send, edit and print photographs
• allow users to build and search blogs.

Although major investments have attracted most attention much of the spending has been incremental and minor, with News for example taking a US$3.5 million stake in recruitment search engine Simply Hired in 2006.

Conventional wisdom is that the major groups are seeking to acquire or build sites that attract those niche audiences in substantial numbers, with a US site supposedly needing upwards of a million unique visitors per month site for mass-market advertisers.

To reach a narrowly defined audience, such as a major portal's finance page, the cost for having an advertisement seen 1,000 times is US$20 to US$50.

For a broader audiences with specific interests, such as visitors to a job search site, the price is US$4 to US$10 per thousand impressions. For general audiences, such as regular users of Myspace.com, the price is US$1 or US$2 per thousand impressions.

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