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Google

Submitted by bellenuelle on May 3, 2008

Category: Business
Words: 1194 | Pages: 5
Views: 61
Popularity Rank: 103,936
Average Member Grade: N/A (Add a Comment / Grade this Paper)

Ad-revenue dominance evokes days when radio and TV were 'new media'

Google's fortunes are soaring, and so is its market share: The world's richest media company this year will pocket 25% of U.S. internet ad revenue, estimates market researcher eMarketer.

Unprecedented domination of a sizzling new medium? Not quite. Google's share remains far below the shares of market leaders during the emergence of earlier new media: radio and TV.

Affiliates of NBC and CBS controlled more than 85% of nighttime radio wattage in 1938, giving the networks a virtual lock on evening broadcasts. In the 1950s, the two companies each commanded an estimated 40% share of network revenue for that decade's hot new medium, TV.

Domination didn't last. In 1941, NBC, owner of two radio networks dubbed Red and Blue, was ordered by the Federal Communications Commission to sell one. It sold Blue, which took the name ABC.

A cozy oligopoly of CBS, NBC and ABC maintained a lock on national TV through the 1980s, enriching networks and agencies. But the rise of cable, the arrival of News Corp.'s Fox as a fourth broadcast network and the demise of 15% commissions marked the end of that gravy train in the 1990s. Earlier this decade, cable surpassed broadcast in ad revenue and prime-time ratings.

Now Google is sizzling, with third-quarter revenue jumping 70% and net income leaping 92%. For every $1 advertisers fork over, Google keeps 27 cents in net income.

Can Google maintain its dominance? Doubtful, based on the brief history of the net. Microsoft Corp.'s Internet Explorer crushed Netscape, yet Microsoft's MSN remains an also-ran in areas such as search. Yahoo decimated AltaVista, Excite and Infoseek but now is struggling for momentum amid slumping growth and profits; its stock last week fell to its lowest price since 2004.

Yahoo's share of U.S. internet ad revenue peaked in 2005 at...

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