Home > Market Research > Broadband & Fixed > Internet Giants 2.0 - From innovation to monetisation

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Market Study
Published: September 2007
Pages: 130
Tables: For full details, please email keithw@cmsinfo.com
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Research from: iDate
Sector: Broadband & Fixed

Spurred in large part by the growing ubiquity of broadband, innovation on the internet has never been healthier. The online giants (Google, Yahoo!, Microsoft, eBay?) naturally top the ranks for the most popular flagship services, and are developing aggregation strategies for new high-potential services (blogging, VoIP, video, mobile, etc.). Technological innovation (new products and services) is at the very heart of the internet giants’ strategies – all locked in a battle for audience , which has led to the launch of a host of new services, to increasingly broad (sometimes too broad!) diversification and to a very active partnership and acquisitions policy.

"Centred around community-centric applications, Web 2.0 has a major hand in shaping the development of new services, which are generally dominated by the internet giants. In less than two years, advancing in leaps and bounds Web 2.0 has become an unavoidable reality, enabling the rise of new major players (MySpace, YouTube, Wikipedia, Facebook?), while its guiding principles are gradually shaping all other services and shaking up internet industry balances (new audience measurement policies, new forms of web browsing, etc.), as well as the comfortable positions of a few of the dominant players. The internet giants are also having to contend more and more with serious rivals come from the media and telecom industries.

Monetising internet services is achieved chiefly through advertising . This model naturally favours the dominant players, and justifies their unending race to secure audience. The online advertising market is thriving, benefiting from users’ shift from other media (via display) and its capacity to generate transactions around performance marketing (notably via search engines). As it stands, however, advertising cannot finance everything, which makes some players’ business model very questionable. A host of innovations (formats, platforms, segmentation tools) will nevertheless improve the monetisation capabilities of certain services, while the internet giants are now focused more on advertising innovations than on innovative services. The battle between them is being waged over total audience and advertising monies (rather than over each service) – a battleground which is now extending beyond the web as they begin to build multi-platform strategies.
Internet Giants 2.0 in brief

- The battle for audience
- Main innovative developments on the web
- New Web 2.0 applications
- Impact of Web 2.0 on the internet industry
- Online revival of media players and telcos
- Role of advertising on the web
- Limitations of the advertising gold rush and of the Long Tail model
- Advertising innovations
- The shift to multi-platform multi-format strategies
Players

- Amazon
- AOL
- eBay
- Google
- Microsoft
- MySpace
- Yahoo!
- ?
Key questions

- Who are the web’s truly innovative players?
- What is the internet giant’s innovation policy?
- How are they optimising audience building?

- What are the top Web 2.0 services?
- How are the internet giants positioning themselves in the Web 2.0 environment?
- To what extent is Web 2.0 shaking up the internet industry?

- How is the online advertising market evolving?
- Is the ad-based business model viable for all services?
- What role for the internet in multi-platform strategies?
Who should read this report?

Internet companies
- Identifying the overriding innovative trends in Web 1.0 and Web 2.0 services
- Assessing the development of rival services
- Understanding media companies’ online initiatives

Telecom operators (fixed and mobile)
- Understanding internet companies’ overall innovation strategy (services and advertising)
- Analysing the opportunities for online monetisation through advertising

Media companies
- Anticipating the internet giants’ migration to multi-platform strategies
- Identifying the major trends in content and service consumption
- Assessing online development opportunities

Equipment suppliers (consumer devices)
- Understanding the challenges of online distribution
- Tracking changes in the service market

Investors and analysts
- Assessing the overall state of competition between the internet giants
- Understanding the true potential and the limitations of the Long Tail model
- Analysing the development of Web 2.0 and its monetisation potential"

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Table of Contents

1 - The race for audience and the innovative edge

1.1 Consolidation around flagship services
- Flagship service usage (search, e-mail, IM, news, e-commerce)
- Internet giants’ chief innovations

1.2 Innovation through aggregation of new services
- The rise of blogs
- Development of fixed and mobile VoIP
- Development of online video
- Development of mobile services

1.3 Audience-building strategies
- Multimedia hub and aggregation
- Controlled viral open model
- Co-branded service strategies

1.4 Battle of the internet giants over services
- M&A and in-house development policies
- Selective diversification
- Internet giants’ failures

2 - Web 2.0: another approach to innovation on the Web

2.1 Definitions
- Different approaches
- Technological aspects
- Consumption growth

2.2 Innovation fuelled by Web 2.0
- Analysis by broad category of service (usage, case studies)
- Innovation spurred by start-ups
- Internet giants’ positioning on each type of Web 2.0 service

2.3 Are the top dogs being threatened?
- New forms of web browsing
- New performance measurements
- New players
- New threats from media conglomerates and a handful of telcos

3 - Audience monetisation and advertising

3.1 Internet and advertising
- Development of online advertising
- Development of free internet
- Forms of online advertising: display vs. search
- Performance and ad marketing

3.2 Limits of advertising
- Efficient model for the biggest players
- Model not suited to all Long Tail models
- Viable financing for only a few types of service

3.3 Advertising innovations
- New formats
- New platforms
- New tools

3.4 Internet giants’ battle for ad monies
- Financial state of internet companies
- Acquisition of online ad specialists and advertising tools
- Rise of multi-platform ad strategies

For full details, please email keithw@cmsinfo.com

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