01 Worlock Editech 2008

Editech 2008 The European Digital Publishing Marketplace: An Overview David R Worlock Chief Research Fellow Outsell, Inc. [email protected] June 2008

26.1% 25.1% 25.2% 24.8% 21.6% 22.5% 18.3%

9.0%

5.0% 4.3% 3.1% 3.1% 3.2% 3.4%

2004 2005 2006 2007 (P) 2008 (P) 2009 (P) 2010 (P)

Search, Aggregation & Syndication Info Industry w/o SAS

Source: Outsell’s Publishers & Information Providers Database

11% Education & Training

HR Information

Legal, Tax & Regulatory 5% 10% Market Research, Reports & Services IT & Telecom Research, 1% Reports & Services News Providers & Publishers 4% Scientific, Technical & Medical Information Search, Aggregation & 8% Syndication 1% Yellow Pages & Telephone 34% Directories

Source: Outsell’s Publishers & Information Providers Database

2007-2010 Est. Industry Growth 5.5% Search, Aggregation & 22.7% Syndication HR Information 15.4%

9.5% IT & Telecom Research, Reports & Services 8.4% Credit & Financial Information

8.1% Market Research, Reports & Services 6.7% Scientific, Technical & Medical 6.7% Information Legal, Tax & Regulatory 5.8% B2B Trade Publishing & 5.7% Company Information Education & Training 5.2%

-2.9% Yellow Pages & Directories

Source: Outsell's Publishers & Information Providers Database News Providers & Publishers

57% 57% 54% 53% 52% 53%

30% 27% 27%

17% 15% 16%

US Americas EMEA AP

2004 2005 2006 Source: Outsell’s Publishers & Information Providers Database

© 2008 Outsell, Inc. All rights reserved. 8 Mobile Hot Spot for Innovation & Investment • Asia and Europe markets driving innovation • Mobile and search tightly linked • Transformative iPhone raised the bar • Mobile goes social • Media goes mobile • Mobile goes open

In-text Pay-per-click or in-line Ad search engine ads auctions ads Virtual world, video game ads & placement

Contextual ads Behavioral ads Advertising widgets Mobile advertising

Cost-per-action, Cost-per-call

40.1% 5.8% Total 2007 Forecast U.S. Ad Spending Growth

20.4% 19.7% 17.9% 14.6%

5.8% 5.2% 2.7% 2.3%

-3.5%

Print Media Online Media Events TV, Radio & Other Other Marketing Media (including PR)

2007 Allocation Forecast 2007 Growth Forecast Source: Outsell’s Ad Spending Database Base = 1,010 (Q12, A)

17.9% Total 2007 Online Forecast Spending Growth

58%

39% 38%

30% 28%

17% 18% 12% 11% 10% 9% 8% 3% 3% 3% 2% 1% 1%

-2% -4%

Company's E-mail Mktg. Search Trade Web Other Info Webinars Vertical Sponsoring Weblog Mktg. Wireless Own Site Engines Site Site Search Content Mktg.

2007 Allocation Forecast 2007 Growth Forecast

Source: Outsell’s Ad Spending Database Base = 1,010 (Q14, A)

Cost of good More analytics an issue options Budgets fixed and slowing

Print-to-digital accelerating

More accountability Better methods to measure effectiveness

© 2008 Outsell, Inc. All rights reserved. 15 24eyes 24x7 News 43 Things 4INFO About.com ADDICTINGGAMES.CO AdGabber Advogato Aggregato Alesti Feed Reader AllBusiness Alta Vista Babel Fish AmazonMechanical Turk Amobee AnswerBag Answers.com Applied Marketing Science, Inc. aSmallWorld Assignment Zero Attensa Onlineadvertising BeanRocket aggregators Bebo Big Idea Group ajax annotation BioMedNet attention BlackPlanet.com b Blinkxehavioral Blip.tv BlogL blogsines Blue Dot Break BrightCove Broadcaster.com BullPoo Business.com Buzznet Cambrian House CarDomain Care2 CareerBuilder City-data.com Classmates.com Clip Syndicate Community of Science Consumating Covestor Crackle craigslist blogosphereCrowdfunding.com books Cyworld boomers DailyMotion business Dandelife models Daum citize Del.ciou.usn Delljournalism DemandUsability Media Dictionary.comclick Digg Dodgeball.com DontStayIn Doostang Douban Ducati EA Online ecademy eConozco Editaste eFunda eHow EI Village eMindsource Encarta Enchanted Learning EngageMedia Entopia EntreMate ePALS Classroom fraudExchange Inccommons eSPIN Expert Witness Network ExpertVillconsumerage Facebook cool Faceparty cooperation Faculty of 1000 copying Faniq copyright FeedBucket FeedFeeds FeedLoungeCommunity FeedReader.net FeedShow.com FeedZilla Fidg't Findarticles.com Flickr Flirtomatic Flock Flurl Fotki Fotolog Free Translation FREEONLINEGAMES.COM Friends Reunited Friendster Frühstückstreff Gaia Online Gather Generate Geni.com GlobalSpec GodTube GoFish Goldcorp ChallengeGoogle Google Reader Google ScholarParticipation Google Video Grabline.comculture Graduates.com cyberlaw Grono.net design GuildCafe digital cocooning Guru.com Haystack digital n hi5atives Hoover’s Hyves Ideastorm iFilm imeem IndiaNews InfoPlease.com Inkling Markets Inmobile InnoCentive Intota IRC- Galleria iStockphoto ITToolbox iWiW Jaiku Web Jambo Jobste2.0r Joga Bonito Kaneva Kinja Kiva.org KnowledgeStormdistraction Last.fm DRM LegoSharing LibraryThinge-books LinkedIn enterprise LiveJournal 2.0 LiveLeakenvironment LookSmart.com LunarStorm epaper Manta flat Marketocracy MEETin Meetup.com MetaCafe metaRSS MiGente.com MINICLIP.COM Mixi mnemomap Mochila MOG Monster Moreover Technologies Mososo Mozilla MSN Games MSN Soapbox Multiply Multiverse Network My Opera Community My Yahoo! MyChances.net MyChurch My-Currency MyNewsbot MySpace myYearbook Nature Publishing Group NBXfolksonomy Net Promoter free NetInformer fun games Netlog NetscapeConversation Netvibes Neuronagaming NewAssignment.Net global internet NewsAlloy ipod NewsBurst NewsGator NewsIsFree NewsNow NewsOnFeeds Newsvine Nexopia NineSigma Ning NowPublic Nuance OhMyNews OkCupid One World TV Open Directory Project orkut Our Media OUTeverywhere Oxford Analyticalibrary2.0 Pajamas local Media location-aware Passado Pearson Education long PtaileekVid maps Pickheadsmarketing Pickspal millennials Piczo Innovation Playahead Plazes Pluck Pownce Pressrank Primary Insight ProfileHeaven Protopage PutFile QubeTV RateItAll RealArcade Reddit Reunion.com Revver Rezzibo Rocket Rojo Round Table Group RssPress.it Rummble Ryze Salesforce.com MMOGScience Navigationmobility Group Scintillamusic Sconex net neutrality Searchles networkingSecondLife news Sermo online sevenload open access sexi Shared Insights, Inc. Sharkle Shelfari Shockwave.com slashgeo SmartPlanet.com So You Wanna Sofomo Soundpedia Sportsvite Stage6 Steve Jackson Games StudioDell Studivz Stumbleupon Sunday Strategy Swarm of Angels Swicki Beta Swivel Tabber TagWorld TakingITGlobal Techquila Shots TechTarget The Student Center The Well Third Screen Media ThomasNet Forums Threadless Todou TopCoder Topix TravBuddy.com Travellerspoint Tribe.net Twango Twitter Umbria UpToDate uVu Veoh Vimeo Visible Path Vistage International Vizu Vmix Vox Voxant Vuze Wagerline WAYN We Are Smarter than Me WebBiographies WebEx Wikipedia WildTangent Network Windows Live Spaces Woophy Work.com Xanga XING XpertUniverse Yahoo Buzz Game Yahoo HotJobs Yahoo Video Yahoo! Yahoo! 360° Yahoo! Answers Yahoo! Games Yahoo! © 2008 Outsell, Inc. All rights reserved. 16 MyWeb Yahoo_mash Yelp Yet2 YodPod Yoqoo You Are TV Your Encore YouTube YRUHRN Zaads Zillow.com Zoints ZoomInfo Zooomr Zopa Zylom The DNA of Web 2.0 Enterprises

• Quick, agile, global • “Open”-minded about content and software • “Unchain my chart”: content without containers • Play well with others • Service-oriented • Conversationalist

Consumer Social Networks

Collegiate Social Networks

Professional Social Networks

Enterprise Networks

Sharing

Networking Problem Solving Crowdsourcing

Tribal marketing & product development

Reinventing R&D

Licensing Bundling

Subscription Syndication

Advertising Pay per view

MercuryMD

…Access …Education …Mobile …WiFi …Source …Standards …Innovation

Source: http://www.youtube.com/watch?v=aFuNFRie8wA

1. Slower but Steady 6. Users Move to Gated Growth in 2008 Communities, Search 2. Asia and EMEA Growth Recedes to Outpace Americas 7. Business Model 3. B2B Online Ad Revenue Experiments Step Up Growth Poised to Pass 8. Software and Content Print Revenue Merge, Spawning New 4. Content + Software + Competitors Community = Business 9. Everything Wants to Be Process Reinvention Open 5. Asia and Europe Drive 10. Next Evolution of Internet Growth in Mobile Content Experience: Web 3D

• Insist on agile mindset, organization, processes • Be clear on value proposition • Adopt new channels • Experiment with new revenue models • Look for cost reduction through reinvention • Assess readiness • Drive speedier time to market • Watch valuations and drive cash flow

Americas EMEA 2006 Asia Pacific 2006 Market Market Size 2006 Market Company Size ($B) ($B) Size ($B) Google, Inc. 6.7 2.9 1.1 Reed Elsevier 6.1 3.3 .6 Thomson Corporation 5.7 .9 .3 Gannett Co., Inc. 5.9 .1 - Pearson plc 3.5 1.4 .3 Yahoo! Inc. 4.7 .9 .6 McGraw-Hill Companies, Inc. 2.7 .3 .1 Reuters Group PLC 1.2 2.4 .8 Bloomberg L.P. 2.4 1.7 .5 Wolters Kluwer nv 1.5 2.9 .2 Others 152.0 92.2 55.7 Total 192.6 109.3 60.2

Source: Outsell’s Publishers & Information Providers Database

Outsell, Inc.

330 Primrose Road, Suite 510 Burlingame, CA 94010 Tel. 650.342.6060 Fax 650.342.7135

25 Floral Street Suite 1.02 London, WC2E 9DS Tel. +44 (0)20 8090 6590

http://www.outsellinc.com

© 2008 Outsell, Inc. All rights reserved. 37 Outsell is a research and advisory firm focused on the publishing, information, and education industries. Our international team provides independent, fact-based analysis and actionable advice about competitors, markets, operational benchmarks, and best practices, so our clients thrive and grow in today's fast-changing digital and global environment.

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