James,
Here's a little food for thought from Reuters. Seems like AOL might be overestimating its expected "Other Revenues" for the future?
Big Al
LOS ANGELES, Calif., March 13 (Reuter) - Total U.S. online advertising was estimated at $301 million in 1996, according to AdSpend data released by Jupiter Communications Thursday.
Of the total amount, an estimated $260 million went to Web sites, $41 million to non-Web online publishers such as America Online <AOL.N> and PointCast Networks, Jupiter said in a news release.
A relatively small number of companies dominated Web advertising spending, with the top ten advertisers accounting for 26.5 percent of all spending found by the Adspend survey.
Netscape Communications Corp. <NSCP.O> led all publishers in ad revenue for the year, taking in an estimated $27.7 million, with the four search engines - Yahoo! Inc. <YHOO.O>, Infoseek <SEEK.O>, Lycos <LCOS.O> and Excite <XCIT.O>.
The number one advertiser was Microsoft Corp <MSFT.O>, which spent an estimated $13 million, and only four of the top spenders were not also among the top ten publishers - Microsoft, AT&T Corp. <T.N>, International Business Machines Corp. <IBM.N> and NYNEX Corp. <NYN.N>.
Among advertising publishers in the top 10 advertisers, Excite is credited with around $6.9 million in spending, Netscape with $5.7 million, Infoseek with $5.1 million, Yahoo!
with $3.9 million, Lycos with $3.9 million and CNET with $2.7 million.
"While online is stil a speck on the media buyer's map, growth like this helps legitimize the medium and slowly but surely attract mainstream advertisers to it," Peter Storck, director of Jupiter's online advertising group, said in a statement.
However, the level of Internet advertising is still far too low to support all the companies hoping to build businesses around it, the research firm concluded.
"There's still not nearly enough ad revenue for all the publishers counting on it, but we expect the steady growth to continue," Storck added.
The advertising numbers do not include $18 million in classified pages and yellow pages. Total Web ad revenue grew during the year from $25.3 million in the first quarter last year to $102.4 million in the fourth quarter.
Revenue estimates in AdSpend are calculated according to
"rate card" rates and therefore do not reflect discounts many
publishers and advertisers negotiate, and AdSpend said data from
public filings and private off- record conversations shows its
figures to over-estimeate the total amount by around 15 percent.
Table - Jupiter's Top 10 Web publishers for 1996
1. Netscape <NSCP.O> $27.7 million
2. Yahoo! <YHOO.O> $20.6 million
3. Infoseek <SEEK.O> $18.1 million
4. Lycos <LCOS.O> $12.8 million
5. Excite <XCIT.O> $12.2 million
6. CNET <CNWK.O> $11.4 million
7. ZD Net $10.2 million
8. WebCrawler <AOL.N> <XCIT.O> $7.3 million
9. ESPNET Sports Zone $6.5 million
10. Pathfinder <TWX.N> $5.8 million
((sam.perry@reuters.com, Palo Alto Bureau 415 846 5400))
21:58 03-13-97
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