I feel I’ve been overly negative for too long (about the decimation about to hit Silicon Valley’s start-ups, about the coming slump in tech demand, about the fundamental bankruptcy of the Web 2.0 economy.) Really, it’s high time for a positive thought.
AMD.
Right, that’s it, back to the bad news. Today brought a disturbing update on online advertising in the US, which still dominates the global internet business (though the Interactive Advertising Agency, which releases figures, always manages to find a positive spin to put on them.)
The headline figures are bad enough: on the internet ad spending growth fell to 12.8 per cent in the second quarter, barely half the rate of growth seen at the end of last year. And remember, this is before the financial crisis - and speak of an economic bust - really gathered steam. The on the web media might be holding up superior than most, but the growth rate looks like it’s heading down into single digits, which is scant comfort for companies that assumed it would stay above 20 per cent for years to come.
Not contained in the official release is an even more disturbing piece of data: the growth rate of on the web display advertising had already slumped to 8 per cent in the second quarter, from 24 per cent in the preceding three months. No wonder the valuations of internet stocks have been deflating so fast. Yahoo is down to less than half what Microsoft offered to pay for it. I wonder how Jerry Yang’s shareholders are feeling now.
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