The Internet Trumps Newspapers

It is not enough that internet revenue at companies like Gannett (GCI) and The New York Times (NYT) are not growing fast enough to offset drops in print revenue, and that this has helped drive their shares to multi-year lows.

Now a study from investment bank Veronis Suhler Stevenson  predicts that overall internet advertising revenue will pass newspapers in 2011. The study assumes that online ad revenue will grow at 21% per year to hit $62 billion four years from now.

The survey also shows that "in 2007 the amount of time spent reading newspapers is expected for the first time to be overtaken by time spent online."

The forecast is no more than an educated guess, but it tends to put a time-line on how long newspapers can hold out. If the intenet does indeed keep up such a rapid revenue growth rate and newspapers continue their decline, it is possible that local papers will not be viable businesses by the middle of the next decade.

And, that is not very far off.

Disclosure: Mr. McIntyre is a former employee of Veronis Suhler.

Douglas A. McIntyre

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