Report: Four Web Sites Control Half of Surfing Time

Offering further evidence that media companies and online portals will control the bulk of e-commerce traffic, four Web properties — America Online (NYSE: AOL), Yahoo! (Nasdaq: YHOO), Microsoft (Nasdaq: MSFT) and Napster — now account for more than half of all the time spent online by U.S. surfers, Jupiter Media Metrix (Nasdaq: JMXI) said Monday.

Jupiter’s report found that the number of Web sites controling 50 percent of surfing time shrunk to four from 11 two years ago.

Moreover, 14 companies control 60 percent of online time, down from 110 Web sites in March 1999.

Jupiter said the data helps dispel the long-held myth that market dominance on the Web would be difficult to achieve.

Myth Shattered?

“The data show an irrefutable trend towards online media consolidation and indicate that the playing field is anything but even,” said Jupiter senior analyst Aram Sinnreich.

According to Sinnreich, a major share of the market is being absorbed by a handful of companies, and those same companies are continuing to direct traffic across their own networks of sites.

What has changed, Jupiter said, is that marketing and advertising power has replaced infrastructure investment as the main barrier to entry and success on the Web. In other words, bigger is better.

Merger Mania

Jupiter said a spate of mergers, most notably the AOL-Time Warner marriage, has created more powerful companies, which have in turn been helped by the death of many smaller companies that did not have the funding power to survive the shakeout.

The top pure e-commerce site on the list was eBay (Nasdaq: EBAY), which controlled just under 2 percent of all surfing time.

However, Jupiter noted that all of the media and portal companies use their dominance in attracting Web traffic to generate e-commerce income.

Power Brokers

In fact, a study released in April by Forrester Research argued that portals are slowly morphing into e-commerce brokers.

Forrester analyst Carrie Johnson said at the time that the winners in that race will be the dominant sites in terms of Web traffic.

“Comparison-shopping engines, product-review sites and portal wannabes don’t have what it takes, but affiliate programs and major portals like AOL, MSN and Yahoo! do,” Johnson said.

Amazon the Portal?

Meanwhile, the Yankee Group said earlier this year that portals such as AOL and Yahoo! saw sales grow faster than traditional e-tail sites did during the 2000 holiday season.

In fact, some e-tail companies have begun to act more like portals and media sites. For instance, Amazon.com (Nasdaq: AMZN) last month unveiled its first non-retail offering when it launched a movie-listings site that will be supported solely by advertising revenue.

11 Comments

  • I AM curious as to what constitutes “time spent online”? AOL, Microsoft, and Yahoo all provide instant messaging service. In Juniper’s stats do they count having your instant messenger running as spending time with a particular company, even if you are not actually browsing their site?

    And what about Napster: does running the Napster program count as being online with Napster even though you may not actually be browsing the site?

    I wonder what the results of this report would be if they did not count companies that have programs that run on your computer in the background?

    This article leaves more questions than it answers.

    • How much of the Microsoft “surfing” time is really people playing on a Microsoft game site, such as Asheron’s Call. I AM not sure that I would count this as surfing time.

      How old is the basic data? I have heard that Napster traffic is way down.

      It would be nice to see percentages for each of the top ten. (I guess we should go get the report, but like many internet surfers, I want everything now and I want it free.)

      • But e-commerce traffic? Only in the same way you can argue that the yellow pages is the biggest advertising agency in the world.

        Ummm. probably half the medium sized shops on the web are powered by Yahoo’s shop.yahoo.com system.

        • Who gets paid for doing this crap? What a horrible report. And a stupid article about it.

          Oh and btw Yahoo has been doing e-commerce longer than AOL (to whoever it was that said Yahoo was “unique”…Like the other three aren’t unique)?

          Anyway, all the comments made here before my posting apply. My daughter and most of her friends search the radio dial for a station that plays Britney Spears. And she doesn’t have a credit card yet Mr. Case.

          So let’s all just go home because the big companies are going to rule the world anyway! Uggh. I’m counting on the fact that my daughter’s musical tastes will broaden by the time she’s got a credit card. Ok?

          Yes, this *has* to be the most useless bit of drivel I’ve seen on the net in a long time…

          Oh yeah…one more thing: If Microsoft sends me junk mail does that get counted as well? hahaha

          • Totally agree.

            How the hell did they measure this? If it’s through some larger

            pool of sites that have all agreed to be monitored in

            a particular way (like doubleclick), then it just might reflect that

            more traffic is going to the real small guys that no one

            is counting at all.

  • This article doesn’t say how the study data was collected, which in my mind has a huge potential for error, nor does it state for what geographical region (US?) the results are supposed to be valid.

    Without knowing this information, it would be foolish to make any decision based on these results.

  • AOL eh? With the world’s homes, offices and streets awash with AOL startup CDs it’s no wonder that AOL is up there in the top 4. I wonder what the stats would look like if startup CDs like AOL did not quietly invade users’ browsers to virtually ‘hard-code’ the corporate site as the users’ default home page.

  • I wonder if they consider time spent transferring files IN THE BACKGROUND using the Napster application as being “online”? Much if not most of the time spent transferring files is spent doing other things online or on their desktops. Is that really time spent “at Napster”? It’s a bit different than spending time on a website….

    Gary

  • I also would like to have read more about Napster’s position in the top four — to me, it says a lot about what people really want online. It’s more interesting than the other three combined, yet there was no mention of it other than the initial list of the four leaders.

  • Just because you really want this to be the story doesn’t mean it is.

    1) AOL and Microsoft have dial-up customers as their primary source of traffic, although Microsoft also has a massive software support site serving, well, 90 percent of computer owners. That means that of course people will spend time there — that’s like saying “people drive on their driveways more often than on any other type of road!”

    2) Yahoo is unique. It’s a stand-alone portal, unsupported by paying members, that happens to be able to support itself with advertising. If there were four sites like Yahoo on your list then you would have a case … but there’s only one. But e-commerce traffic? Only in the same way you can argue that the yellow pages is the biggest advertising agency in the world.

    3) You never address the Napster phenomenon. Supposedly it’s in the top four, but what does that tell us? Nothing to support your broad opening statement. E-commerce and Napster aren’t two things most people would immediately associate.

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