Digital Media

Nobody's surprised: Internet-advertising revenues fell slightly in the first half of 2009, according to numbers released Monday by the Interactive Advertising Bureau and PricewaterhouseCoopers.

The trade group found that online-ad revenues dropped 5.3 percent to $10.9 billion year over year, representing a total loss of $610 million. That's an understandable loss, given how much the media business has had the wind knocked out of it, thanks to the recession. But the slide in digital advertising isn't nearly as dire, when compared to the overall ad industry, which fell 15.4 percent.

The IAB also brought up numbers from Nielsen indicating that online advertising is essentially flat--and that the only sector of the ad industry that is growing is cable television.

PwC partner David Silverman called online advertising "a vibrant, sustainable industry," and he reiterated that it's an "industry that really didn't exist more than 12 years ago."

There was not much talk about social-media advertising, which has made somewhat of a breakthrough in recent months: after much criticism that it would never be able to make much money, social ads got a boost from Facebook's announcement that it had reached a cash flow-positive status several quarters earlier than expected.

The social network, which now has more than 300 million active users, has been dipping a toe into virtual-commerce revenue streams but is still supported primarily by advertising.

If you find yourself in front of your computer screen looking to understand the recession and find ways to deal with it, you're not alone.

According to a report released Wednesday by the Pew Research Center, some 69 percent of American adults, or 88 percent of U.S. Internet users, have gone online in the past year for reasons related to the recession. The study says they either are trying to get help with personal economic issues or gather information about the origins of national economic problems and solutions to those difficulties.

Americans look to the Internet to cope with the recession.

(Credit: livescience)

The report, called "The Internet and the Recession," is a result of the Pew Research Center's Pew Internet & American Life Project, which explores the Internet's impact on families, communities, education, health care, and civic and political life.

The Pew Internet report comes from a national phone survey of 2,253 adults 18 and older, including 561 cell phone interviews.

The report also revealed that those hard hit by the recession are among the most avid, wide-ranging Internet users. In the past year, according to the report, about 52 percent of American adults have experienced financial hardships varying from a pay cut to losing their jobs to witnessing their investments or house value fall by more than half their value.

Other than looking for information, Internet users have also been contributing content. Thirty-four percent of survey participants said that they have created content and commentary about the recession in places like blogs, and social-network sites such as Twitter. This content includes ideas, rants, and expert commentary.

According to Lee Rainie, director of the Pew Internet & American Life Project and co-author of the new report, Internet users are on a dual quest in this recession: they use the Internet to understand it better and also to rant and share experiences in fighting it.

Apart from the numbers reported above, other recession-related online activities in the past year include price comparisons (67 percent), job hunting (41 percent), and seeking online coupons for savings (40 percent). Other than that, "help on spending less" and "how to earn more money and second jobs" got the same 27 percent.

The report has only one silver lining, if at all, and that is that only 3 percent of survey participants have gone online in the past year to find information about filing for bankruptcy.

Google is eliminating about 200 sales and marketing jobs, the company said in a blog post Thursday, blaming the move on overlapping areas and overhiring during a more optimistic time.

"Today we have informed Googlers that we plan to reduce the number of roles within our sales and marketing organizations by just under 200 globally," said Omid Kordestani, senior vice president of global sales and business development, in the blog post. "We did look at a number of different options but ultimately concluded that we had to restructure our organizations in order to improve our effectiveness and efficiency as a business."

Those losing their jobs will get severance and a crack at other openings at the Mountain View, Calif.-based company, which had 20,222 employees at the end of December.

"Google has grown very quickly in a very short period of time. When companies grow that quickly it's almost impossible to get everything right--and we certainly didn't. In some areas we've created overlapping organizations which not only duplicate effort but also complicate the decision-making process. That makes our teams less effective and efficient than they should be. In addition, we over-invested in some areas in preparation for the growth trends we were experiencing at the time," Kordestani said.

Google has shaken up even Silicon Valley with its fast growth in revenue, size, and ambition, but it's not immune to the global economic woes, and it's been trying to improve its profitability by cutting underperforming projects such as a print advertising initiative. Last year, Google started paring back its contractor workforce, and this year, Google cut 100 recruiters and 40 in a canceled radio ad effort.

LaidOffCamp, held during daylight hours this week at the Temple night club in downtown San Francisco, brought together more than 600 unemployed and self-employed people seeking to share ideas about finding work amid the recession.

Volunteers, speakers, and sponsors came together to plug networking, information exchange, social media, and interconnected community as ways to find support and, hopefully, an income. Among the crowd, there were also entrepreneurs, venture capitalists, and recruiters.

Another 16 such events are preliminarily scheduled across the nation, with the next one set for Friday in Dallas. But, not surprisingly, San Francisco was the first to play host to this unemployment un-conference.

Jobs, taxes, and travel captured the interest of U.S. Internet surfers in January, marking double-digit to triple-digit gains over the previous month, according to a ComScore report released Thursday.

The number of unique visitors heading to tax sites climbed 176 percent to 24,703 in January, as users geared up for the upcoming tax season, according to ComScore.

Travel sites, meanwhile, posted a 46 percent increase to 13,028 visitors last month, as users took advantage of falling fuel prices and a desire to plan ahead for their vacations, while job search sites climbed 42 percent to 26,702 visitors, in January.

(Credit: ComScore)

With unemployment running at 7.6 percent nationwide in January and Americans across all industries concerned about their job security, it's not surprising job-related sites are gaining an increase.

According to a January ComScore survey, U.S. residents earning less than $50,000 have had the highest unemployment rate, while those earning $50,000 up to $100,000 are extremely concerned with losing their jobs.

(Credit: ComScore)

That type of concern may not bode well for giving a kick-start to e-commerce spending, noted Gian Fulgoni, ComScore's executive chairman, during a press conference Thursday to discuss the January e-commerce results.

The middle-class, for example, accounts for 46 percent of online retail spending, while the upper-class represents 34 percent, he noted.

And although these two groups posted a 2 percent and 8 percent increase in January year-over-year retail e-commerce spending, respectively, this type of concern over job security could lead to belt-tightening down the line, he noted.

During January, U.S. retail e-commerce spending rose 2 percent over the previous year, according to ComScore.

E-commerce spending on sports and fitness rose 42 percent in January over the previous year, while books and magazines captured a 37 percent increase and home, garden, and furniture climbed 14 percent, the report noted.

Holiday spending on electronics for family members remains high on the to-do list, according to a survey by IDC and the National Research Network (NRN).

According to results from a survey of more than 3,000 consumers, 62 percent indicated they planned to spend the same amount or more on electronics for family members this holiday.

Those surprising results come as big-box electronics retailers face a challenging time. Best Buy announced a 77 percent drop in earnings and call for employee buyouts earlier this month and Circuit City filed for Chapter 11 bankruptcy last month.

Nonetheless, consumers are maintaining their holiday spending level for family members. Portable media players and digital cameras performed well over the holiday weekend that wraps in Thanksgiving, and high-definition TVs were expected to be the top electronic sale items between now and the end of the year, according to the survey.

"Consumers are shifting to staying, or nesting, at home more," Randy Giusto, IDC general manager of client and consumer markets.

The survey also found that while 25 percent of those surveyed shopped for electronics over the Thanksgiving holiday, 50 percent plan to buy electronics before the year's end.

Consumers plan to account for these recessionary times by reducing the frequency of eating out, and 38 percent of survey respondents noted they expect to spend less on gifts for co-workers.

Facebook employees hoping to cash out some stock options received an unpleasant early Christmas present this week, courtesy of the economic downturn.

In August, Facebook began considering ways to let current employees unload a portion of their shares that had vested by this fall.

Facebook CEO Mark Zuckerberg

But on Thursday, Facebook Chief Executive Mark Zuckerberg notified employees that the plan was on hold. "I'm writing this note to let you know some bad news," he wrote, according to an excerpt posted on Valleywag.com. "Despite a lot of work, we have not been able to finalize a plan for the employee stock sale we announced in August."

That indefinite postponement comes during a punishing downturn for publicly-traded technology companies and increasing layoffs in Silicon Valley. Google has fallen in value from its 2007 high by roughly 62 percent, closing at $274.32 on Thursday. Apple has dropped by around 55 percent, closing at $91.41, and eBay's fall is about 67 percent.

And, unlike Facebook, those tech companies are actually profitable.

It's not uncommon for pre-IPO employees to gripe about not being able to cash out, but it is unusual for employers to arrange a partial payday in the way that Zuckerberg envisioned.

It must have seemed like a good idea this summer, especially when memories of a $15 billion valuation still seemed plausible. And the horrible market for IPOs--there were just six in the first three quarters of 2008, the lowest volume since 1977, according to Thomson Reuters and the National Venture Capital Association--must have discouraged that exit path.

But now that the company's valuation has collapsed at least as quickly as the NASDAQ, Facebook has been left with little choice but to close the shutters, hope for the best, and attempt to ride out the storm.