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Report: Blogs And Free Content Are Hurting B-To-B Publishers

Newspaper companies and business trade publishers face disruption from online competitors such as Google and Yahoo.
The news and trade market is in for some rough weather, according to report released Monday by researchers at Outsell Inc. Traditional segment leaders--newspaper companies and business trade publishers--face disruption from online competitors such as Google Inc. and Yahoo Inc.

"News and trade services are two of the most severely impacted markets hit by the dynamo that is the search world," says Chuck Richard, VP and lead analyst at Outsell, a research and advisory firm.

Revenue for the news and trade market reached $89.5 billion in 2004, up 8.7% from 2003. Outsell predicts growth of perhaps half that in 2005.

While the segment should continue to expand, Outsell's Market View report finds that individual user spending on B-to-B content between 2001 and 2005 fell 15%. "Users are finding alternatives to paid N&T [news and trade] sources: mostly ad-supported content and user-created content from blogs."

For traditional news and trade companies, the problem is that ad revenue per user is much higher in print than online. So as audiences migrate online, there's less ad revenue per user.

Richard expects online ads will become more valuable and print ads will become less so. "In the long run, people will value online ads more and as they reallocate their budgets, it will drive down the cost of print ads," he says.

News and trade companies, meanwhile, are likely to continue acquiring online shopping, social-networking, and blogging-related companies in an effort to expand their businesses online.