Search engines, as portals to locate products, services, information and community, continue their march toward destination of user choice. Whether it is a large, broad base, consumer targeted search engine, or a second- or third-tier niche targeted vertical engine, SE’s earn their user crede — and potential advertising revenues — step by step. They’ve focused on building their muscle in data warehousing, getting sticky with personalized feeds based on previous user behaviors, expanding their content distribution networks, and offering multimedia plus localized Universal Search Results … without being asked in the search box.

Content Still Makes Kings

As part of the march to content dominance, Google set up an advertising deal with news site CNN.com back in September. But, more quietly, Google arranged to host news from four international services: Associated Press, Canadian Press, British Press Association and Agence France-Presse. After watching Google’s investment in data centers and then its contracts with major news organizations to host and serve entire news feeds (not simply headlines with links to target news sites), search engine researchers began speculating about Google’s motives. Is Google planning to go head-to-head with the major content-delivery networks, Akamai and Limelight, muscling into a market that Frost and Sullivan predicts will reach $2.5 Billion in revenues by 2013? Or is the Big G posing yet another hurdle for already challenged newspaper advertisers, who depend on traffic sent by search engines to their news content to drive newspaper online ad revenues? Answers from Yankee Group analyst Mike Goodman are basically, Wait and See.

Content distribution heavyweights like Akamai and Limelight have built out at global scale and continually improve their digital media and large-file distribution performance. So an isolated deal to distribute international news content does not make Google a contender. Yet. To soothe the jitters of newspaper advertising managers, Google promises that its News servers will still link to external news sites; and its four new international news content partners will not get better rankings on Google News search results.

Yahoo! Reaches More Newsies

Recent comScore rankings for unique visitors to online news content put Yahoo News way ahead of Google News — 34 million to 9.6 million respectively. If we approach comScore’s ratings as a news content horse race, Google doesn’t win, place or show: Yahoo News came in first; MSNBC.com was second with 24.5 million unique users. And AOL News clocked in right behind it with 23.9 million.

Is the Clock Still Running on Old Media?

From these developments, search engine users may gain access to more and better content and news. Search marketers may find stickier news sites for their organic and paid ad programs. Certainly the contract partners in these content deals — from Google, Yahoo, Microsoft et. al to CNN.com and international news agencies — expect healthy online ad revenues. Win. Win. Win. But, what of local newspapers? And what about traditional broadcast and print media ad venues? Major trend analyzing research from comScore, Nielsen/Net Ratings, Piper Jaffray Investment and others points toward Internet advertising’s displacement of the traditionally largest ad media — newspapers, yellow pages and consumer magazines. Citing ad spending trends through 2006, alternative (online, Internet) advertising channels grew 36%, while traditional ad spending grew only two-and-one-half percent. More interesting, futurists keep pointing to the same time — 2011 — for the takedown. Internet advertising is predicted to replace newspapers as largest ad medium in 2011. Microsoft, in testimony before a Congressional antitrust hearing, fingered year 2011 as the time when online advertising will reach the dollars spent now on TV and Radio advertising, combined. Unique and localized news content may be local newspaper operations’ last stand for ad revenue.