September 15, 2005

According to a survey released by researchers at Outsell Inc., the B2B news and supply chain markets could be facing lower sales.

Traditional segment leaders such as newspapers and specialized business trade publishers face turbulence from online direct competitors such as Google, Yahoo and MSN.

These events appear to be triggering a new trend in the B2B segment.

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

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Revenue for the news and trade market reached $89.5 billion in 2004, up 8.7 percent 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 B2B 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 N&T 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.

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

Source: Yahoo News