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A sour economy proved tougher to overcome than a war for online publishers. A new survey by the Online Publishers Association (OPA) finds that first quarter revenues soared compared to last year despite the onset of the second Iraqi war during March. The OPA talked to 24 members, including Forbes.com, the Washington Post and the New York Times. First quarter ad revenue increased by an average 40.7 percent during first quarter 2003 compared to 2002, the 24 members surveyed said. Overall revenue jumped an average 37.6 percent. New York Times Digital and another publisher surveyed, Knight Ridder Digital, both reported first quarter operating profits. Most reported that although some advertisers yanked ads in the early days of the war, the majority returned in less than a week. Online publishers were able to zap the ads back onto their sites much more quickly than magazines or newspapers.
After leaving, Case says AOL should spin off
During Steve Case’s tenure as chairman of AOL Time Warner, he pooh-poohed suggestions of spinning America Online off into its own company. Now that he’s been ousted, bowing to the pressure of primarily non-AOLers, he’s apparently changed his mind. The New York Times reported yesterday that Case has talked with several AOL senior officials about the idea. After the giddy high of the $100 billion-merger in January 2001, America Online has been in a steep decline. During the past 12 months, the company has battled its first-ever decline in dial-up subscribers and a slow online ad market, compounded by a federal investigation into AOL accounting irregularities. AOL Time Warner shares have dropped by 57 percent since the merger. Case and America Online officials have refused to comment on the speculation.
Cable leads phones in broadband market
Despite price gouging by the phone companies, cable remains the preferred broadband provider for most high-speed subscribers. Roughly 65 percent of the current 17.3 million high-speed subscribers in the U.S. get their service from cable companies, according to UBS Warburg. Telephone companies provide the other 35 percent. During the first quarter, 1.7 million new customers switched to high-speed access, but digital subscriber line (DSL) market share dropped for the third straight quarter. To try to catch up, phone companies have been cutting their DSL rates. Verizon recently slashed prices by 20 percent, and SBC Communications also has reduced prices.
Lufthansa adds broadband service to more flights
Lufthansa is expanding its experimental mile-high broadband service. The German airline will add broadband availability to 80 long-haul planes in addition to its already existing service on Airbus A340 and A330. The access doesn’t come cheap. When Lufthansa became the first airline to boast broadband capabilities in January, it estimated costs at 30 euros, or $35.44, per flight. But now the airline may switch to a flat fee or a program that would allow frequent flyer miles to be swapped for airborne broadband time. The company did not say how much interest there had been in the program since the testing phase with Connexion began.
Not-so-tasty spam, the great American export
No wonder Americans get a bad name in Europe. It seems as if one of the country’s main exports has become spam. Though no formal studies have been done on the volume of unsolicited e-mails in Europe, many believe that the number is growing. The head of Microsoft’s Danish MSN and Hotmail operations recently claimed that 95 percent of European spam comes from the U.S. China is also a serial offender, with German officials estimating that 7 percent of junk mail is sent from there. The majority of spam is sent in English. E-marketers rarely include euro prices in the junk mail, which mostly originates in the U.S. The European Union does have a law against sending spam, but countries cannot cross the Atlantic to enforce them. Punishment is usually a fine.
May 28, 2003© 2003 Media Life
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