Friday, October 26, 2007

Information Industry to Top $448B by 2010; Search to Soar, News to Nosedive

Revenues for the worldwide information industry will reach $448 billion by 2010 - with search in the top position in growth and the news-companies segment in the last position - according to Outsell, Inc.’s “Outlook 2008″ annual analysis of market size, share leaders, forecast and trends.

Outsell forecasts that the information industry will grow at a steady and moderate combined annual growth rate (CAGR) of 5.5% from 2007-2010, but companies such as Google, Yahoo, AOL and MSN will leave their industry peers “in the dust.”

According to Outsell’s “Outlook 2008“:

The Search, Aggregation & Syndication (SAS) segment of the information industry is projected to surge far ahead of other segments, achieving a 22.7% CAGR during the same period and hitting $75 billion in revenue by 2010.

Online advertising is the engine behind this fast pace of growth, since it’s shifting ad dollars from other marketing media, and diverting audiences that used to belong to publishers, Outsell said.
The only other segment projected to achieve a double-digit CAGR (15.4%) during the forecast period is HR Information.

At the other end of the growth spectrum, the News Providers & Publishers segment - the largest - is projected to begin a period of negative growth: Outsell predicts 2007 will be the first year of negative growth in News, with a 2.5% decline in revenues - and a predicted CAGR of -2.9% from 2007 through 2010.

The News segment is in the most uncomfortable place in its history, suffering from too-slow movement of revenues from print to digital, declining circulation revenues, and lack of momentum in exploiting new channels and web-based opportunities, Outsell said.
The overriding issue for information-industry execs in the coming year is agility, according to Outsell Chief Analyst Leigh Watson Healy.

“The growth of the SAS segment alone is a powerful demonstration of the fundamental shifts in product creation, distribution, and business models being driven by nimble competitors with ‘e-DNA,’” she said.

“The challenge for traditional publishers and media companies is to maximize productivity while investing in the people and processes that will deliver growth from a shift to the digital world.”
Among other findings of the Outsell study:

The information industry had aggregate revenues of $362 billion in 2006, and grew 6% over 2005.

Growth of the overall information industry slowed in 2006 from its earlier pace, resulting in a CAGR of 6.2% for the period 2002 through 2006, compared with a CAGR of 8% for 2001 through 2005.

In 2006, industry growth was driven by Search, Aggregation & Syndication (SAS), on the strength of online ad revenues, and grew 26% from 2005, compared with the industry’s 6%.
The HR Information segment grew 15.5% over 2005 - the only other segment to achieve double-digit growth.

The highest-growing segments from 2002 to 2006 were SAS, HR Market Research, and Reports & Services, achieving CAGRs of 18.9%, 15.3%, and 11.9%, respectively.

About the report: Outsell’s “Outlook 2008″ analyzes 11 industry segments, including HR Information; Credit & Financial Information; IT & Telecom Research, Reports & Services; Non-IT Market Research, Reports & Services; Scientific, Technical & Medical; Legal, Tax & Regulatory; B2B Trade Publishing & Company; Education & Training; and Yellow Pages & Directories. Outsell, Inc., based in Burlingame, CA and in London, is the sole worldwide market research and consulting company for the information industry.