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For News Organizations, Tech Giants Loom Large For News Organizations, Tech Giants Loom Large

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TECHNOLOGY

For News Organizations, Tech Giants Loom Large

Study finds media market often defined by technology companies

As many news organizations continue to struggle to make money online, a new study by the Pew Research Center concludes that the industry may be at the mercy of tech giants like Google and Facebook.

The appetite for news has only grown as social networking and mobile devices have become everyday tools, according to Pew’s annual "State of the News Media" report. For example, 27 percent of people surveyed said they get their news on mobile devices, and evidence shows that mobile devices increased traffic on major news sites by 9 percent.

 

But it’s not clear that news organizations have figured out how to fully harness technology they have little control over.

“If the first 15 years of the Web proved difficult, the next five look only more so,” the report said. “News organizations now find themselves both partnering with and competing against large technology-based organizations that are far better financed and boast greater engineering knowledge.”

According to the study, 68 percent of digital advertising revenue in 2011 went to five major tech companies: Microsoft, Google, Facebook, AOL, and Yahoo. And now those companies are seeking to expand their reach.

 

“Google, Amazon, Facebook, Apple and a few others are maneuvering to make the hardware people use, the operating systems that run those devices, the browsers on which people navigate, the e-mail services on which they communicate, the social networks on which they share and the Web platforms on which they shop and play,” the Pew team wrote. “And all of this will provide these companies with detailed personal data about each consumer.”

For years, the news industry distributed information. News companies owned the printing presses and broadcast stations. Now, however, media organizations increasingly rely on tech companies to distribute their content.

Are news organizations, the rport asks, destined to become another service offered by behemoth tech companies?

YouTube (owned by Google) is funding news shows from Reuters; Yahoo has partnered with ABC; AOL bought The Huffington Post; and Facebook’s Social Reader has led to partnerships with The Wall Street Journal and The Washington Post, among others.

 

In their own quests for new revenue, more news organizations will establish pay walls “as a matter of survival,” the report predicted.

News reports have hammered many of the major tech companies over privacy issues related to targeting advertisements, but news companies are turning to the often controversial ads as a way to keep up, Pew’s researchers found.

CNN, The New York Times, and Yahoo! News all use heavily targeted ads, and many news organizations are trying to catch up.

“Newspapers have traditionally gathered extensive information about their readers,” the report said. “[But] only in last couple of years have many papers created the consolidated databases and mining abilities that allow the information to be better used.”

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