Content Sites Bracing For 50% Revenue Slowdown
Monday, December 29, 2008; 10:42 PM
The U.S. economy has likely been in recession for a year, and tech companies have been bracing for a big slowdown in growth. But the fact is that revenues for most Internet-based companies haven't dropped yet. Amazon, in fact, was able to issue its annual "best year ever" press release the day after Christmas.
That's all about to change, at least for content sites, starting this week. Display advertising revenue is going to fall of a cliff in January according to a number of content sites I've spoken with who rely on advertising for revenue. "Sales through December were mostly strong as advertisers used up their marketing budgets," said one sales exec. But, he added, "there are few buyers for this next fiscal quarter, and those few that are buying are looking for steep discounts."
Just how bad will it be? I've heard estimates of 30%-80% revenue drops over the next three months from companies that serve a variety of content (games sites, tech news, celebrity news, political news, etc.). The median pessimism point is around 50%. The people I've spoken with work at large public companies and small one-person blog shops. Absolutely no one I spoke with said they expect an up quarter.
Some of the companies that survive the next few months will be leaner and stronger when this ends. That's the upside. But everyone is cutting the fat, and your boss just may think you're expendable.
Anyhow, on a more upbeat note, guess the movie the image is from, first comment to get it right gets a TechCrunch tshirt.