Top 50 US digital media companies
PaidContent.org ranks the best performers based on online sales. Google tops the list, and Facebook is 10th. With video.
By Joseph Tartakoff, paidContent.org
There's no doubt that people are spending more time with digital media, on the Web and with mobile devices, and less time with traditional media, such as newspapers, magazines and radio. What's less clear is this: Which media companies are doing the best job of exploiting that shift?
Welcome to the paidContent 50, our inaugural list of the 50 most successful digital media companies in the U.S.
Our list is a ranking based on digital sales, which, in our minds, is a fair indicator of digital success. Where digital-sales figures were publicly available, we used them; in cases where they weren't, we estimated them using a variety of sources, including comments executives have made to the press, research reports and conversations with industry analysts. We also reached out directly to dozens of companies that don't report digital sales, although most -- including major media conglomerates that only a few years ago were trumpeting their digital revenue figures -- declined to provide that information to us. Our top 10 list is below:
- Google (GOOG): Google executives have long said that their company is not a media company and has no aspirations to produce content. There's no doubt, though, that Google has created a massive business off of others that do create content online. Its search engine culls billions of Web pages to return results, which it then sells ads against. AdSense is the largest ad network in the world and funds the operations of thousands of sites. And YouTube hosts videos that are played more than 2 billion times a day. U.S. digital revenue: $14.1 billion.
- Yahoo (YHOO): Yahoo's sites get a staggering 630 million unique visitors a month, according to comScore -- but that number flat-lined in 2010 as Facebook took off. Over the years, Yahoo has struggled to build a social-networking presence of its own and recently has moved to integrate Twitter and Facebook across its properties instead. U.S. 2010 digital revenue: $4.4 billion.
- Apple (AAPL): By closely tying iTunes to all of its devices, Apple has had an enormous influence on the sale of digital content. It has about 70%of the (legal) digital music market. And its iOS apps have completely revolutionized how content is distributed to wireless devices, spawning the creation of me-too storefronts on platforms like Android, Symbian and even the Web itself, with, for example, the Chrome Web Store.U.S. 2010 digital revenue: $4.1 billion.
- Microsoft (MSFT): Under President Qi Lu, Microsoft's online services unit has made increasing traffic to the Bing search engine its top priority. A steady release of new features, an onslaught of advertising and distribution deals increased Bing's share of the search market to 12% at the end of the year, up from 8.4 percent in 2009, according to comScore. That's not counting Yahoo's 16% of the search market, which is now also powered by Microsoft's search engine. However, the company still has a very long way to go to catch up to Google, which controls 66.6% of the market. U.S. 2010 digital revenue: $3.1 billion.
- Netflix (NFLX): Netflix went on a shopping spree last year by lining up an impressive range of deals for movie and TV content, including agreements with Disney and Relativity Media. That growth has kicked up combative words from the likes of Time Warner CEO Jeff Bewkes, but Netflix founder Reed Hastings has bigger ambitions on the road ahead: Canada is the first stop on an international expansion, and there will be plenty of new personalization features, like Facebook integration, to serve the existing and rabid fan base. U.S. 2010 digital revenue: $1.5 billion-plus.
- IAC (IACI): IAC says its network of sites, including Ask.com and Vimeo, reach nearly 250 million unique visitors a month. The business performed remarkably well in 2010, posting a 21% increase in overall sales after a down year in 2009. All of IAC's major units reported double-digit growth in revenue. U.S. 2010 digital revenue: $1.36 billion.
- AOL (AOL): AOL CEO Tim Armstrong has been refining his company's content and ad sales strategy for more than a year, in part through a very aggressive series of acquisitions, but AOL to date has not been able to capitalize on the improving online ad market. Armstrong has told investors that he expects the company's display-ad revenue to grow in line with the overall market by mid-2011. U.S. 2010 digital revenue: $1.28 billion.
- News Corp. (NWS): News Corp.'s digital presence, like its overall media footprint, is vast. Even at a time of fragmentation and waning influence for most mass-media moguls, Rupert Murdoch's empire remains a multimedia powerhouse. That's not to say that there aren't dogs in the portfolio: News Corp.'s 2005 purchase of MySpace has become a symbol of the media's inability to successfully buy into social networking, and, earlier this year, the company put the struggling business up for sale. U.S. 2010 digital revenue: $1.2 billion-plus.
- AT&T (ATT): AT&T is trying hard to leverage its 5,000-person-strong local sales force to duplicate online the success of its now deteriorating print directory business. Its flagship site is YP.com (as in Yellow Pages), which gets more than 23 million unique visitors a month. Much of its strategy has been "me too." AT&T launched a Yelp copycat site in 2010 and earlier this month said it will soon offer daily deals in local markets. U.S. 2010 digital revenue: $1.09 billion.
- Facebook: Facebook started off 2010 in disastrous fashion, with users raising very loud objections to a series of updates that limited the information they could keep private on the site. CEO Mark Zuckerberg eventually apologized and unveiled simpler privacy controls. That apparently was enough for users, who quickly forgot the uproar and kept on signing on. The number of Facebook users doubled in 2010, to nearly 600 million, while the company's valuation jumped to $75 billion from $14 billion. U.S. 2010 digital revenue: $1.07 billion-plus
See the rest of the companies on paidContent's list.Post continues after video:
We're the first to admit that the list contains a fair amount of guesswork -- informed guesswork but guesswork nonetheless. It is meant to help kick off a deeper conversation about digital success.
Some high-level takeaways from our ranking: Businesses that generate digital revenue by selling ads dominate our list; companies that make most of their money selling online content or subscriptions took only 13 of the 50 spots. And while many traditional media companies may be struggling to grow their overall sales, they are generating significant revenue online. Twenty-one companies on our list have a substantial presence in non-online media, such as newspapers, phone books or TV. Finally, Google is, by far, the most successful digital media company in the U.S. Its revenue is more than three times that of the No. 2 company on the paidContent 50.
For the purposes of this list, we defined a digital media company as a business that is making money directly from the sale of online content or online advertising. So we didn't include companies like content-delivery networks, domain-name registration businesses or advertising agencies. Even with companies like Apple or Amazon -- both of which are on our list -- we didn't include revenue from the sales of devices like the iPad or Kindle. And in creating the paidContent 50, we decided to focus on consumer-facing companies, so you won't find any business-to-business content companies here.