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Never Argue With The Data

By: David Utter

The Search, Aggregation and Syndication sector covered by firm Outsell Inc include Google, Yahoo, and Microsoft; Outsell predicts they will be part of the total information industry's growth to $458 billion annually by 2009.

Never Argue With The DataInformation is power, the saying goes, and in the 21st Century it is also money in the bank. Lots of money. Billions of dollars, all associated with data and the companies centered on information " who has it, who controls access to it, and who wants to use it.

The monthly wrapup sent out by The Jordan, Edmiston Group of M&A; activity in the media market included Outsell's assessment of the Search sector. Outsell sees a compound annual growth rate (CAGR) of 17.3 percent for 2006-2009, reaching $68 billion in revenues.

That money comes from where you would expect, according to Outsell:

The phenomenal growth of online advertising continues to drive the Search segment, as well as GYMs (Google, Yahoo! and Microsoft) diversion of dollars and audiences from "established" advertising players, such as newspapers.

In 2005, the sector drew $36.2 billion in revenue, with a CAGR of 12.7 percent from 2001-2005. That period saw much less broadband adoption and far fewer uses of rich media advertising than we have today.

The period saw the hints of the decline of the news publishing industry's fortunes, and 2006-2009 don't look much better to Outsell, either. Their forecasted CAGR for news publishers is only a single percentage point.

Advertisers have been driving change as much as Internet users. Outsell said its annual Advertising Tracking Study shows the online channel is used by 80 percent of advertisers. By 2008, that rate should be over 90 percent.

With that ad money will come greater demand for accountability from paid search providers. "Outsell predicts that 2007 will be the year that (Google, Yahoo! and Microsoft), publishers, advertisers, and auditors establish standardized third-party audit and certification processes to validate clicks and overcome click fraud.

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