Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Media Ownership Laws And Tech Companies

Posted by Tom Foremski - May 21, 2007

(A short series of short essays on tech and media...)

I've been thinking and writing about some of the recent M&A in the tech/media sector. Three of the West Coast Internet giants, GOOG, YHOO and MSFT have made substantial acquisitions in the advertising sector.

Those have been smart moves even though there are execution challenges ahead.

The emerging trend is for the new media companies of the West Coast, which also includes EBAY and AMZN, to wrest away a greater share of advertising revenues from the East Coast media companies. And so far, they are doing very well, growing while their East Coast competitors are shrinking.

It is interesting that East Coast media companies such as New York Times (NYT), don't consider Google a competitor. It is interesting that GOOG, for example, does not consider itself a media company.  Yet both publish pages of content with advertising around it.

Oldstream Media Versus Techstream Media

It doesn't matter what NYT or GOOG call themselves--both are out to grab a greater share of the same  advertising gold. And that goes for the other "oldstream" media companies too, many of them in New York city, most of them out East.

Yet GOOG and its closest competitors: YHOO, MSFT, EBAY, AMZN (all on the West Coast) are far more efficient in the online advertising space than media companies such as Dow Jones, Conde Nast, Financial Times, Time Warner, News Corp, and the rest.

The way the trend is heading, the West Coast technology-enabled-media companies, the techstream media,  are going to move up the value chain until they have the content producers in a corner. The content producers such as newspapers, magazines, radio, television will be selling their space through GOOG and the others, because of scale and first mover advantage. If this trend continues without disruption...

Do We Need New Media Ownership Laws?

There are US rules about media ownership in various regional markets that limit ownership, which limits influence on society. How will such rules apply if you don't have to own the media companies directly yet you have broad control over the publishing of that media--through search engines.

And you control the revenues earned by the media companies because of inclusion in your many-media advertising networks: in web, paper, radio, TV, video, and within multiple regional markets. That's a lot of indirect control over media.

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Also:

The Rapid Rise of the West Coast Media Industry...

...and the rapid fall of the East Coast Media Advertising agencies have become the prime target of the Internet giants in their most recent M&A activities. It is all part of the roll-up in the industry, as Sramana Mitra describes it...

Posted by Tom Foremski on May 21, 2007 7:34 PM

 

A 1400 mile long corridor of innovation . . .the emerging Silicon Coast

The Disney acquisition of Pixar Animation Studios is interesting from a regional point of view. It strengthens growing ties between Santa Clara and Santa Monica tech/media cultures. Terry Semel came up from So. Cal where he was co-chief of Warner...

Posted by Tom Foremski on January 25, 2006 5:05 AM

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