Peter Kafka

Recent Posts by Peter Kafka

Barry Diller: IAC’s Web Ads Really, Really Cratering

Since basically everyone’s ad business is vanishing before our eyes, you need to come up with a pretty eye-popping number to make anyone pay attention. But Barry Diller managed to do it today during IAC’s earnings call: Diller said his company’s Internet display ads may be down 50 percent this month.

That stat, courtesy of PaidContent’s David Kaplan, is staggering even by today’s end-times standards. We won’t be shocked, for instance, if Time Warner (TWX) tells us that AOL’s ad business has dropped 18 percent when it reports its earnings tomorrow. And IAC (IACI) had already reported a 19 percent drop in its fourth-quarter media and advertising revenue earlier this morning.

But 50 percent? That’s not supposed to happen to Web advertising at this point. Local TV ads? Sure. But not Internet ad dollars, which were supposed to be here to stay–and, according to some bulls, were set to thrive during a recession.

And that’s still happening in some pockets of the Web: Google (GOOG) reported decent results last month, for instance. And some niche players say they’re doing fine, too: I just got off the phone with Vibrant Media CEO Doug Stevenson, who tells me his business is up nearly 100 percent over the last year.

Vibrant sells those “in-text” links–basically highlighted text in a Web story that leads to an ad–which were controversial at the beginning of this decade but are now ho-hum. So that’s promising, I guess. But we content creators are going to need a whole lot more than paid search and in-text ads to keep ourselves afloat. Hope someone figures that part out, quickly.


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