Online classified ads take $3.1Billion from newspapers

Don Dodge on The Next Big Thing: http://dondodge.typepad.com/the_next_big_thing/2007/09/online-classifi.html

"The Washington Post has an interesting story today about the online classified advertising market which recorded $3.1 Billion in sales in 2006, while newspaper classifieds have dropped by about $3B in the last five years.

"... The chart on the left, courtesy of The Washington Post, shows just how dramatic the shift has been, and will continue to be...

"Billions of dollars from small advertisers -Consider that Google generated over $10 Billion in online ad revenues last year, while Yahoo, Microsoft, and others raked in another $10B or more. The vast majority of this revenue came from small advertisers, not the Fortune 500.

"... Most of Google's billions in revenue comes from small advertisers paying 50 cents to $5 per click for a text ad.

"The Next Big Thing - Online classified ads, local search, and mobile search are huge markets, with no dominant leader, and lots of opportunity for innovation. New business models will emerge and a new set of leaders will reap billions in profits...pennies at a time."

My Take

The stats cited by Mr. Dodge tell the recent history. His observation that there is no dominant leader in the huge market for local search (into which I lump mobile search and classified ads) points toward the next revolution in advertising.

Sunday September 2, 2007 - 10:02am (EDT)