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Online: Key Questions Facing Digital News

By Kenny Olmstead, Amy Mitchell, and Tom Rosenstiel of the Project for Excellence in Journalism

Four sets of questions seem most pressing now about news in the digital realm.

The first, and perhaps most critical, is how much progress has been made trying to monetize the Web, particularly when it comes to producing news and information about current events? The data continue to show that the absence of revenue online filling in for losses on traditional platforms, not audience loss to alternative news sources, is the greater threat to news organizations.

The second question relates to the shift in digital behavior to mobile devices — to smartphones and now tablets. If the mobile revolution has begun, how big is it, and how large will it become?  And what do the early data suggest about whether tablets will create new revenue potential for news?

The third question involves the pace at which people are turning to digital for their news over other platforms. Is the shift to digital accelerating? If so, it shortens further the time that legacy media firms have to secure new revenue sources there.

Finally, what is occurring in online newsrooms? In the past, much of investment of resources in online-only news focused on aggregation and discussion of the news rather than the shoe-leather newsgathering. There are signs that may be changing. How much progress has been made, and in what ways? And to what extent can we generalize about this diverse and rapidly changing space?

There are certainly other issues involving news online as well. But the landscape is vast and it requires some effort to organize the discussion. In any scenario, one issue seems paramount: Money will to a large degree determine where things are going.

Digital Economics

Financially, the web hit a major milestone in 2010.

Online advertising revenue for all kinds of content surpassed spending on print newspapers advertising for the first time. The emergence of the tablet – the iPad – during the year promises still more potential for revenue.

But look more closely inside the data and the road to economic sustainability for news online remains difficult.

Much of that online ad spending continues to go to places other than news sites, and that is unlikely to change. Indeed, most in the news industry have come to accept a daunting reality: Advertising in online spaces will probably never generate the sums – or at least the profits – that advertising generated in traditional platforms like printed newspapers. To survive financially, the consensus on the business side of news operations is that news sites not only need to make their advertising smarter, but they also need to find some way to charge for content and to invent new revenue streams other than display advertising and subscriptions. And for now these alternative revenue streams remain small in scale. And even shifting to a culture that requires experimentation is for some news companies a challenge.

Digital Ad Spending

Overall, spending on online advertising – on news and non-news sites – grew 14% in 2010, according to data from the research firm eMarketer. That pushed total online ad dollars, which includes all types of web and digital advertising, ahead of those spent on newspaper advertising for the first time. Total dollars, according to eMarketer estimates, will reach $25.8 billion for the year.1

That is over $2 billion more than newspaper print advertising in 2010, according to projections based on Newspaper Association of America figures for the first three quarters of 2010.2

The growth in online ad spending is expected to continue, with eMarketer projecting rates of increase of 10% per year or higher through 2014.3, 4

The problem for journalism is that the growth that has occurred online has not occurred as much in advertising associated with news.

Search, which grew 16% in 2010, continues to draw by far the largest portion of total online ad spending, nearly half (48%).5 And even with developments in other types of ads, search is expected to maintain a strong grip on the online ad dollar for at least the next four years.



News organizations get very little money from search.

Banner, video and other forms of display ads, where news is more of a player, also grew in 2010, but none account for even half the dollars spent on search.


Video advertising saw the largest growth rate in 2010, 39% (after growing 38% in 2009) and eMarketer projects similar rates through 2014.  But just as online ad growth overall saw massive increases in its infancy, much of video’s growth comes from the fact it is still just emerging. Its total dollars in 2010 are estimated at $1.4 billion, about a tenth of search, and just 5% of overall online ad revenue.6

Video ads carry potential as news organizations create more video-based content. But a lot of uncertainty remains. Some of the strongest growth has been in the area of pay-per-view video programs, where part of what users are paying for is the absence of ads.


Banner ads, where most news organizations still get the majority of their online ad revenue, grew at about the same rate as search (16%).7  The problem here is that advertisers have many alternatives for these ads besides news.

Potentially more promising for news is a type of banner ads called “targeted” display. Essentially these are the higher-tech version of banner ads. Targeted display involves matching the ads to the interests of individual consumers by combining information about their search habits, their demographics, their geographic location and potentially even their past behavior online and then delivering ad content that seems most relevant to their interests. In theory, news organizations can benefit here. They have the potential to know a lot about these consumers – for instance what news topics most interest them, what sports teams they follow, what business subjects they usually click on and what columnists they most avidly read. That knowledge can then be marketed to advertisers. News organizations’ most loyal audiences also may trust them enough to share a fair amount of information about themselves.

Spending on targeted display ads is growing, but not yet as rapidly as other forms of online ads, and targeted display still represents a small portion of the market. Together with more traditional banner ads, targeted and non-targeted display make up 23% of online ad spending, or about $5.9 billion.8

Part of the problem is that up to now, display ads have been less tied to particular kinds of content than search ads. Search ads are programmed to pop up when certain search terms are used. Display ads, on the other hand, work more like traditional newspaper ads where advertisers pay for a certain space on the page. The ad is not then connected to the content that appears.  Past PEJ research indicates that consumers have gotten very good at ignoring these ads. In early 2010, fully 77% reported never or rarely ever clicking on one when on a news site.9

Still, some in the industry see untapped potential in targeted display. Google CEO Eric Schmidt told the New York Times in September 2010 that, while his company was originally built around search advertising, “display is our next big business.”10

This growth in targeted display is already happening in the local ad market. Local targeted display ads, which are sold by companies like Google and Facebook on behalf of local businesses and sometimes on news sites, grew by 22% in 2010. Still, these targeted display ads make up just 8.3% of all local online ad spending. Much more local advertising, 36%, comes from traditional or untargeted display ads, and spending on that sector declined 13%.11

Local is potentially a very important market for news. Roughly 40% of all online ad spending is now local, and that is up from 34% only a year earlier. Moreover, in the local ad market, display ads (the kind that news relies on), is a bigger piece of the pie. Indeed, local display makes up a greater portion of online ad spending than search (44.2% versus 38% for search), according to Borrell Associates.12


And targeted ads are going to become even more important locally. By 2015, Borrell projects targeted display ads will grow to over $11 billion, while untargeted ads will fall to $2.5 billion.13


Even if newer display advertising proves successful, however, the news industry has another challenge:  It will need to secure a greater portion of display ad buys to thrive.  The industry made some headway in 2010. According to market research firm Kantar Media (formerly TNS Media Intelligence), TV Stations, Newspapers and News & Current events sites grew as a percentage of all online ad spending (though these three categories include more than news).  Together, display ad dollars in these categories grew 9% in 2010 to $1.4 billion and now make up 16% of all display spending. 14

But those numbers still lag behind what Kantar media refers to as “multiservice” sites, which include portals (like AOL), search engines (like Google) and ISPs (like Comcast). In other words, part of the problem news organizations have online is that there are so many non-news competitors for ads, and often these are portals or aggregators with far larger audiences. 15

Subscription Model and User Fees

News organizations clearly hope that part of the future of news online is in subscription fees for content; whether that subscription fee is for mobile content, browser-based content, all content bundled together, or some hybrid. Many in the industry believe that mobile devices are better suited to people going to a single destination through an app than browsing the web for the cheapest content. And that difference between apps and the web convinces some news executives that particular trusted news “brands” will see a resurgence in the apps environment that will make subscriptions more possible.

In January 2011, PEJ and the Pew Internet & American Life Project conducted a nationwide survey of the local news consumption habits. This included a series of questions about what kind of local information consumers currently pay for and what they may be willing to pay in the future. (Click here for the full report)

Overall, just 36% of adults said they now pay something for local news. The bulk of those (33% overall) pay for a print newspaper subscription, while 6% reported paying for other local sources besides newspapers, such as local news apps (1%) or other local news content online (5%) (Some pay for more than one item).16

We also asked consumers how they would react if the only way to access content from the local paper was by paying for it.  Half of those in the sample were asked if they would pay a $5 monthly subscription fee and the other half were asked if they would pay a $10 fee.

In all, 23% of respondents said they would be willing to pay a $5 fee. But when the stakes are raised to $10, just 18% said they would pay. Even among those who see an inherent monetary value in the news product, then, the limit of that value seems to come pretty quickly.  Overall, in both versions of the question, roughly three-quarters of adults said they would not pay anything.17


Who are these potential paying online customers? What stood out most is that these individuals are more likely than others to be avid news consumers: They are more likely than others to say they “enjoy keeping up with the news” and use several sources or platforms to stay on top of local news. They also tended to be more highly educated, with at least a college degree.

The Mobile Landscape Evolves – From Cell, to Smart, to Tablet

If the economics of the web look difficult, many publishers hope mobile offers a second chance for news producers — both to charge for content and to find a more pleasing format for advertising. It is difficult, however, to judge whether those hopes are justified.  News consumption in the mobile arena is just getting started. The new survey by PEJ-Pew Internet finds that as of January 2011, some 7% of American adults reported owning a tablet device. This figure nearly doubled in four months (4%).18 Some 84% own a mobile phone of some sort and about four in ten of them access the internet on their phone.19  For news organizations the encouraging news is that revenue in the mobile space is growing quickly.

Total mobile advertising spending (which includes ads on cellphones, smart phones like the BlackBerry and tablet devices like the iPad) in 2010, according to projections from eMarketer, will reach $743 million, a 79% increase over 2009.20 The dollars here are still small relative to other online advertising – browser-based search alone is around $12 billion. Mobile search (as a component of all mobile spending) is only $185 million. Still, the growth here is dramatic and eMarketer projects that by 2014 total mobile ad spending will reach $2.6 billion.21

Mobile ads can take several different forms — from display, to video, to text messaging. But the mix of ad revenues in the mobile arena is different from the mix in the web domain. The oldest form of mobile advertising, text message ads, dominates, totaling $327 million in 2010, a 43% increase over 2009.22 And with good reason, a Pew Internet & American Life Project survey in May 2010 found that 72% of Americans use their cellphones to send text messages, up from 65% in April 2009.23

But most analysts expect that by 2012 display will overtake text messaging as the primary form of mobile advertising. It is already the second biggest category in mobile, ahead of search. There was $202 million spent on mobile display ads in 2010, up 122% from a year before. (Search followed closely behind at $185 million, also up more than 120%).24


Video ad spending comes in last in mobile, at $28.3 million, and market researchers expect it will continue to be a relatively small percentage of total mobile spending through 2014. One reason is that while wireless networks and devices are getting faster, streaming video still taxes both the device and the mobile network.25

As mobile expands, all of these ad types represent potential areas of revenue growth for news.

The first area is in advertising revenue. In these early stages at least, the evidence suggests that users are more open to mobile ads than PC-based, especially on tablet devices. In a Luth Research survey for the Mobile Marketing Associates in August 2010, some 43% of users “noticed” one mobile ad in the last month, and 39% said they interacted with the ad.26  A separate survey in August 2010 by comScore and InMobi found 25% of respondents said they were getting accustomed to viewing mobile ads. That was twice the number, 12%, who said the ads were intrusive.27

Many of these mobile ads are coming through application-based content which offer a richer visual experience. In a Nielsen survey specifically of iPad users, 39% said ads on the iPad were “new and interesting,” compared with 19% of all device owners (such as those who own other devices like Android phones or another brand of tablet).  And 35% of those surveyed said they “enjoyed” viewing the ads, double that of all device owners.28

Some of the more positive response to mobile ads, Noah Elkin of eMarketer told PEJ, may be because of less clutter on the page than on the desktop, more of a novelty factor and more targeted nature of these ads.  Advertisers may be more drawn to this platform for similar reasons. The ads can be more targeted (and therefore more likely to lead to user response of some kind) and can be more visually appealing.

Applications also offer the content producers a second revenue stream – charging for access to the application itself.

Many news organizations in 2010 eagerly welcomed this new prospect, launching their own branded news apps.   On mobile phones, most of these apps either remained free or carried a minimal one-time download price of $1 to $3. On tablets though, more and more news organizations are developing applications that come with a monthly subscription fee. The Washington Post, for example, offered its iPad app free with a complimentary subscription through February 2011.  Now those who subscribe to the print product will be charged 99 cents per month and those who do not subscribe to the print edition will pay $3.99 per month. And early 2011 saw the launch of the first-ever iPad-only daily news publication. Produced by News Corp. in conjunction with Apple, the publication, called The Daily, is an iPad-only interactive news product, with a subscription fee of $40 per year or 99 cents per week.

Though it is early in the evolution of tablets, surveys suggest offering both free and paid options may produce the most advantages. A 2010 comScore survey found 54% said they would accept advertisements in exchange for a free app.29  A separate Nielsen survey of iPhone users in September 2010, however, suggests other consumers feel differently. It found that 43% of iPhone users had already upgraded from a free version of an app of any kind to a paid one.30

To probe into these questions further, PEJ and the Pew Internet Project in partnership with the Knight Foundation conducted a survey in January 2011 of the use of mobile devices for local news consumption.

The survey found substantial reliance on mobile devices for local news. As of January 2011, nearly half of all Americans, 47%, get some kind of local news and information through their mobile devices.  This compares to only 26% of adults, one year earlier, who got news of any kind (local or national) on their cellphones, according to a separate Pew Internet national survey. Weather and information about local businesses such as restaurants are the most popular kinds of mobile local information, followed by general local news, local sports and traffic.31

What is less clear is how much potential growth there could be. Of all cellphone and/or tablet owners, just 13% have used an app for local news or information, which equates to 1% of the American public. However, among 18-to-29-year-olds, 20% of mobile device owners have used an app for local news or information, so there is some promise for the future of this platform. Only a small fraction of adults (10%) who currently use mobile apps to connect to local news and information pay for those apps.32

As tablet devices become more commonplace and smartphones become more powerful, the potential for mobile revenue — at least as an added stream if not one that makes up for losses in the old — could grow rapidly.  If the worry in the last decade was that free content on the web would kill news, news organizations are now pinning hopes on mobile and tablets to bring user fees, along with new advertising, back into the equation.

Still, more questions than answers remain, including how the news organizations tackle the audience fragmentation and added complexities in the tablet and smart phone real.

The New Landscape of Partners

One often-overlooked factor in the landscape of mobile applications is that it introduces a new set of partners and formats that make assessing the financial future much more complicated than many first imagined.

There are the content producers (like the local newspaper, CNN or the Daily Beast); there are the device and software companies (like Apple, Google, Samsung, Windows); there are advertisers (Volvo, Nike, Amazon); there are ad networks (AdMob, Google, ValueClick); and there is the consumer with limited time and tolerance.

Device Makers/Software Providers: Apple, Google and any other companies selling their own tablet- or app-based devices have much of the control over two main components of the space here: the content and the ads. They do not control the ad environment absolutely, but they do set the rules for third-party ad providers. The tablets are designed in a way that the content that appears there needs to be built specifically for each mobile platform, Android for Google, iOS for Apple or one of the other less prevalent platforms like Windows 7 mobile. Companies that want to advertise in this realm also face rules that encourage multiple, separate buys. It is possible to buy ads through a third-party network such as Millennial Media, which can place ads across platforms (on an iPhone, Android device, or other mobile platform).  Apple and Google limit the number of ads that can be bought through third party providers, however, effectively pushing advertisers to go through the Google or the iAd network instead. Each company offers its own deal to advertisers and content producers. Google’s is friendlier to partner with than Apple’s, but Google still makes the rules.

The Advertiser: As with distributing content, placing ads inside apps is much more complicated than in the browser-based web space. If Google was the company to simplify browser-based advertising, no equivalent has yet emerged in the mobile space. The most straightforward option (and the one encouraged by device makers) is for advertisers like Volvo or Travelocity to purchase separate ads to exist in each device: one buy for an ad they want to have appear in the New York Times Apple app, a separate buy for an ad to appear in the Times’ Google Android app, and yet another for the Times’ web-based or print ads. But this approach is also often the most costly – and it requires much interoffice coordination.  Another option is to buy through a mobile ad network that sells for the New York Times, but this adds yet another layer of complexity to the process and is discouraged in the rules set out by the device makers. Each mobile ad network serves a different mix of platforms and outlets. Millennial Media, for example, offers a different set of content provider apps across a different set of platforms than JumpTap (another third-party ad network). Advertisers see potential here as these audiences are expected to be more targeted than even main website audiences and thereby more potentially lucrative. But it remains to be seen if the additional dollars emerge in a way that offsets the added complexity.

The Information Producer: Those creating content, such as the local newspaper or CNN, must create separate versions for each mobile device, in addition to their main website display. The Chicago Tribune for example creates one app through Apple’s software that appears only on Apple products, then a second through Google’s software for the Android system, and so on for each new phone or tablet maker using a different platform. The hope for new fees and more reliable audiences to market to advertisers has lured organizations down this road. But it is a road that requires added up-front investment with every step.  Many small to midsize news organizations say they may not be able to afford these multiple creations. In some cases, they say they cannot even borrow the money to make such innovations.

The Consumer: In addition to deciding on a brand of computer, a type of smartphone or tablet and a phone company, consumers now have to navigate among a growing number of tablet device brands. They then start the process of creating their own universe of apps — separately selecting, downloading, and in some cases paying for — each application with its own agreement rules, passwords and payment levels to navigate.  As of February 2011 there were over 350,000 apps in the Apple app store, with over 3 billion total downloads, and around 90,000 in the Android app store and well over 1 billion downloads.33

Applications offer the promise of access to better quality content and the ability to slide through articles, pop up visuals, enlarge graphics and sort material. But at least some business experts believe that the universe of apps and devices will quickly become too complex for the mass market to tolerate. In the early history of file-sharing technology for music and video, for instance, the first generation of users was willing to navigate an array of complicated pirate sites that even involved some legal risk. Later, the mass market gravitated to simpler approaches, such as iTunes or instant viewing on Netflix, even if consumers had to pay for it.

In that case, then, the most avid and high-tech consumers are likely to want content across all devices, to download multiple versions and to navigate complex app stores and menus. But only 7% of Americans have tablets now. How much complexity will the average consumer be willing to accept down the road?

In addition, consumers may quickly reach the number of apps — especially news apps – that they choose to keep on their tablet.  News apps compete to lie alongside the mix of shopping, gaming, personal tool and other apps all on the 7-by-10-inch screen.

The appeals of tablet devices are real and we may well soon see businesses develop new products to alleviate certain inefficiencies. But assessing the long-term future remains complicated.


While the economics remain uncertain, the audience for news in the digital sphere is already well established and in 2010 continued to grow. For legacy news producers this poses a problem. More web audience generally means smaller audience for the legacy platforms that deliver more of their revenue. And that, in turn, shortens the time left while their brand still resonates, to secure sufficient revenue in the digital realm.

Meanwhile, for the online-only ventures with which legacy firms compete, the audience migration from print to online is a benefit with no downside.

In broad terms, the rise of the internet continues.  The online news audience is getting bigger and the amount of time it spends there is growing.

Indeed, the internet is now ahead of newspapers and closing the gap with television, and among younger consumers, the internet has already taken the lead.  However, much of the traffic to the top news destinations on the web goes to sites that are owned by traditional media companies.

According to the Pew Research Center’s People & the Press’s Biannual News Consumption Survey, 34% of Americans said they got news online “yesterday,” up from 29% in 2008.34

This means that more Americans now get news online each day than read newspapers. Print usage “yesterday” fell to 31%, down from 34% in 2008.

The web now trails only television (which includes both broadcast and cable) in popularity as a news source. The number of people who watched television news in some form “yesterday” was actually up slightly in 2010 to 58%.35


Surveys of time spent with various media reveal a similar rising trend, the internet outpacing newspapers and behind television. Americans reported spending 13 minutes with online news “yesterday,” according to the Pew Research data. That is three minutes more than time spent with newspapers (10 minutes), but 19 minutes shy of television and two minutes behind radio.

When the question is asked about a certain kind of news—(“Where do you get most of your news about national and international issues?”) the appeal of the internet to bring distant information home becomes even clearer.36


The generational differences are striking and point to the extent to which the web is likely to grow as a news source. Among 18-to-29-year-olds, the internet became the No. 1 platform of choice for news for the first time in 2010. Nearly two-thirds of that age group, 65%, said they got most of their news from the internet, 52% turned to television and 21% to newspapers. (Respondents are allowed to name two sources).37

Among those aged 30 –to 49, the web is a clear No. 2, as 48% named it as a main source for news, twice the percentage that rely on newspapers (22%). Among this age cohort, television is still first (63%).38

The growth in digital news consumption has not changed the list of most popular news sites much.   The top sources online for news are dominated by the traditional ones, mostly newspapers.

To get the fullest picture possible, PEJ analyzes data from the three online measurement companies, Nielsen, comScore and Hitwise. While their traffic numbers vary substantially due to different methods of counting, the ranking of biggest sites shifts little.39

The rest of the list is made up of up of mostly traditional sources for news– newspapers, cable news channels and network news.  Of the top 25 news sites for 2010 measured by Nielsen, only seven sites are online-only operations (meaning they do not have any traditional media as part of their organizations). The remaining 18 are all tied to traditional media properties. Of those seven online-only sites, five generate the majority of their traffic by aggregating traditional media.40 ComScore data are only for December 2010 and thus do not constitute a yearly average. But even here, 20 of the top 25 sites are tied to legacy platforms.

News Investment

Getting a sense of investment in digital news information is a more than a challenge.

An abundance of outlets with different levels of financial backing come together online — from large companies like AOL to established single entities like local newspapers to local startups to nonprofit funded networks. We talked in last year’s report about how these different news operations serve a variety of roles, from content creator to aggregator to organizer to curator of user content, each a different but integral element of the news process online. For the most part, organizations tended to be rooted in one of these roles — Yahoo News, for example, rooted in aggregation, newspapers in text story creation, television in video story telling — and focused their resources there.

In 2010, as the economy improved, we saw further shifting toward the middle. News creators are moving more fully into also serving as curators for other outside information; aggregators are creating more of their own original content or purchasing entities to do that for them; blogs and social media are becoming a part of everyone’s tool kit. The mainstream media and the new media are at least in some ways moving closer together.

At the same time, we also are seeing one from of specialization that had yet to reach the web in a significant way begin to materialize in 2010:  Broadcast-based news outlets began building more of their top stories as video, in part because they see an incentive in video advertising in doing so.

Several legacy outlets also formalized a trend we noted before — partnerships with small hyperlocal blogs or news startups, or what some have dubbed the “pro-am” approach. And there are early signs of strategic financial planning at least among some of the local news startups.

Part of this movement toward the middle may have to do with continued losses in core business. Yahoo, originally created as a search outlet, long ago lost its dominance there to Google. In the last few years the financial implications of that loss became more acute. AOL began as dial-up internet service provider and a disseminator or curator of news, but has been losing subscribers and revenue rapidly.

Both companies over the last five years have moved toward content production, and in 2010 made major investments there.

AOL’s movement took several forms: added journalistic staff to its main website,, development of Patch and the purchase of the Huffington Post. By one count, even before acquiring HuffPo (with has an editorial staff of 70 to 80, of which an estimated 18 produce content and the rest aggregate and curate), AOL hired 900 employees over the summer 2010, according to AOL CEO Tim Armstrong in a speech during a companywide meeting. About half of the new hires went to Patch.41

On AOLNews, which focuses mainly on national and international news, the growth in original content was striking. PEJ, as a part of its weekly News Coverage Index, analyzes the top news stories on AOLNews throughout the year. For all of 2010, more than one in four top stories, 42%, was written by AOL staff. That is six times the amount of original content it offered in 2009 (7%).

Separately, AOL produced more local news content by ramping up its investment in, a loosely connected network of local news producers around the country.

AOL acquired the company in 2009, shortly after Armstrong, one of the creators of Patch, was appointed CEO.

As of early 2011, Patch was up and running in 800 towns across the U.S. and is expected to be in over 1,000 by the end of the year.42

According to the New York Times, AOL’s move into local news has not come cheap. The company spent $50 million on Patch in 2009 alone. While it is not clear how much revenue AOL makes from Patch, the audience at least so far appears to be growing. According to comScore, Patch had three million unique visitors in December 2010, about 80 times its audience a year earlier.43 Three million unique visitors is still fairly small for a news site.  The most-trafficked news site, Yahoo News, had, according to comScore, over 94 million visitors in December 2010, 30 times that of Patch.  Topix, a site that aggregates local news content produced by others, had 7 million unique visitors in December, according to the same ratings agency.

AOL is betting that it brings a unique mix to local news — economies of scale, money to invest, programming skills, an online ad sales network and a national brand — all qualities that local newspapers or other local players might lack. Declines in newspaper resources are also opening a void Patch can fill. But others have tried and failed here.  Backfence, a site similar to Patch that aimed to create local content through the use of citizen journalist, was launched in 2004 but it closed its doors just three years later in 2007. And local news has one unavoidable reality: It is expensive to produce and the audience for any one piece of content is limited.

AOL’s more recent purchase also pushes the company more toward its own news brand. In February 2011, AOL announced that it would buy the HuffingtonPost for $315 million.44

Unlike Patch, however, the pieces Huffington brings are not new. AOL already has national journalists — many more than Huffington. It also has an established destination. AOL is the No. 3 or 4 most-visited site online, depending on the ratings company. Huffington Post is No. 8. The reporting muscle at Huffington Post, indeed, is minimal. According to a Harvard Business School study, the site’s staff of 60 in 2009 included just four reporters.45 According to insiders, that number may have grown to closer to 18 in 2010. Still, most of Huffington’s staff are curators and editors, not content creators. Huffington Post’s revenue is also relatively small, around $31 million.46 (entirely from advertising) in 2010 versus AOL’s $2.4 billion in 2010.47 Huffington Post also brings with it an ideological orientation that AOL did not.

What Huffington Post does have is an upward growth trajectory for its website. With reports that a good deal of AOL’s traffic comes from people who keep AOL because they don’t realize they no longer need it, or to maintain an e-mail address, AOL may have felt its news website was unusually vulnerable. It also means that for consumers, it means two of the top ten sources of online news will be part of the same company.

A March 10 memo from AOL CEO Tim Armstrong announced hundreds of new job cuts at the company, including about 200 layoffs in the AOL Media and tech groups in the U.S.

Yahoo Moves Into Content Creation

As the most-visited news site in the country, Yahoo’s long-term interest in news is clear. Its stock and trade has generally been in aggregating and categorizing news rather than producing its own.  It has variously tried and pulled back from producing its own original journalism. But In 2010 Yahoo took larger steps toward making content creation a key part of its brand.

The company hired close to a dozen journalists in early 2010 and opened a Washington bureau.  Among those hired were Michael Calderone, a former writer at Politico; Jane Sasseen a former BusinessWeek bureau chief, and Anna Robertson, a former producer at ABC’s “Good Morning America.”48

The evidence of these efforts has already begun to appear. For all of 2010, according to PEJ’s analysis of top news stories on Yahoo News, 96% of the top stories came through aggregation either from a wire service or another news outlet and 4% came from Yahoo staff.  While 4% is a small number, it is an increase of more than 300% from 2009 when just 1% came from Yahoo staff (and 99% was aggregated material).

Traditional Sites Learn Their Strengths

Part of the conundrum of moving online for traditional media companies was that in some sense they lost what made them unique.  A cable channel, a newspaper, a network TV broadcast all look the same online.  But at least two of these, in 2010, began pushing more resources into producing digital content in their legacy form – video.

In 2009, CNN rolled out a major redesign of its homepage, emphasizing video. In the front page, as a choice next to main tab options, video is now the second option, adjacent to the home tab.  In 2010, CNN also began to include more video content in its top stories. Over 16% of the top stories in 2010 were primarily video stories, up from just 2% in 2009.

MSNBC.com49 a took a similar path, redesigning its website in 2010 to emphasize video. also included more video in its stories as well: 10% of the top stories contained video, up from 4% in 2009.

Fox News bucked this trend with almost no video on its site and no change from 2009.50

In new media, two special reports on local innovation for this year’s State of the News Media provide a sense of progress mixed with uncertainty. Michelle McLellan, a journalist and consultant who works on projects that help foster a healthy local news ecosystem, looks at the economic structure of small community based startups where much of the innovation begins. With great enthusiasm for informing fellow citizens but often little money to fund them, these creations tended to come and go quickly or produce minimal levels of original reporting.  Now though there seem to be some signs of economic stability that may help secure their place in the news ecosystem.

McLellan writes that local sites are beginning to focus as much of their energy on financial sustainability and revenues as on news creation. They are also learning, much as traditional news organizations are, that they will probably need multiple revenue streams, not one or two, in order to survive. It might be considered a second phases in their evolution. Nonprofit foundations are still critical in getting many of these off the ground, but once established, new media are now making progress supplementing and even replacing those funds with a mix of alternative revenue streams.

For these sites, not dependent on legacy revenue, the shifting audience is less of a sign of time running out than opportunity moving their way. Still, they have a long way to go. Some of the smaller sites generate less than $100,000 a year in revenue.

Even in Seattle, one of the most vibrant places for new media, its long-term future is uncertain. Michael R. Fancher, former executive editor of the Seattle Times and co-convener of Journalism That Matters Pacific Northwest, takes a focused look elsewhere is this report at Seattle’s news ecosystem. In it he quotes a report by the New America Foundation that concludes about Seattle, “Despite the relative vibrancy of the media scene, and even with all its demographic and other advantages, it is unclear how much of this innovation is sustainable.” Others he talked with cited concern about what is still getting lost, even with all the creative innovation. “Some vitally important stories are less likely to be covered,” said Diane Douglas, who runs a local civic group and considers the decentralization of media voices a healthy change. “It’s very frightening to think of those gaps and all the more insidious because you don’t know what you don’t know.”

Nevertheless, Fancher sees reason for hope. “The more diffuse news and information ecosystem is more complex and more difficult to imagine,” he said. “It is also still vulnerable. But its potential seems richer than the once more stable system that it was replacing.”


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  4. Over the last several years, the volume of advertising online has grown even faster than the dollar volume, but the price of many kinds of online ads kept dropping because of a growing supply of marketable web space. In 2010 the pure volume of online ads grew enough to counter to lower ad rates and to push total spending online ahead of newspapers, aided by the continuing decline in print ad dollars.
  5. Another market research firm, Veronis Suhler Stevenson projects a slightly smaller increase of 9% for 2010, but bases on that on just the first two quarters of 2010 rather than the first three used by eMarketer.
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  17. Pew Research Center’s Project for Excellence in Journalism and Internet & American Life Project, January 12-25, 2011 Local Information Survey.  N=2,251 adults age 18 and older. Conducted in English and Spanish and included 750 cellphone interviews.
  18. Pew Research Center’s Project for Excellence in Journalism and Internet & American Life Project, January 12-25, 2011 Local Information Survey.  N=2,251 adults age 18 and older. Conducted in English and Spanish and included 750 cellphone interviews.
  19. Pew Research Center’s Project for Excellence in Journalism and Internet & American Life Project, January 12-25, 2011 Local Information Survey.  N=2,251 adults age 18 and older. Conducted in English and Spanish and included 750 cellphone interviews.
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  29. ComScore and InMobi survey, August 2010.
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  31. Pew Research Center’s Project for Excellence in Journalism and Internet & American Life Project, January 12-25, 2011 Local Information Survey.  N=2,251 adults age 18 and older. Conducted in English and Spanish and included 750 cellphone interviews.
  32. Pew Research Center’s Project for Excellence in Journalism and Internet & American Life Project, January 12-25, 2011 Local Information Survey.  N=2,251 adults age 18 and older. Conducted in English and Spanish and included 750 cellphone interviews.
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  39. The names on the list are slightly different as well due to sites being grouped differently. ComScore for example includes McClatchy papers as one grouping while Nielsen splits out each individual paper. Across all three, Yahoo News led in monthly unique audience in 2010.
  40. The Nielsen Company and comScore.
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  48. Helft, Miguel. “With Hirings, Yahoo Steps Up Its News Coverage.” The New York Times. March 30, 2010.
  49. and MSNBC are different entities.  The two companies have a separate board and editorial staff.  MSNBC is owned by NBC Universal (Comcast is now the majority shareholder in NBC Universal) and based in New York City, while is a joint venture between Microsoft and NBC Universal and is based in Redmond, Washington.
  50. Based on PEJ’s News Coverage Index