November 2, 2006

Google threat to TV revenue

Link: Google threat to TV revenue


Channel 4’s Chief Executive, Andy Duncan, has said that online advertising is a threat to TV revenues.

He highlighted this by pointing out that at the current rate, Google’s revenues will outstrip Channel 4’s revenues by the end of the year.

Andy Duncan has already approached Google to discuss syndication of Channel 4 programming online, as well as lobbying Parliament to allow Channel 4 access to digital distribution.

According to Brand Republic, online ad growth has risen by more than 40% in the UK in the first half of the year to £917.2m, and is now just a percentage point behind national newspapers in terms of market share.

Google is a major power behind online advertising spend in the UK, and the recent comments and statistics help enforce that.

However, while Google’s position in online advertising is without contention, the fact that Google is currently valued on the stock markets at over $140 billion suggests that investors are vastly over-estimating its potential.

I mean, seriously - if Google’s revenues are equivalent to Channel 4’s, then would Channel 4 be valued at $140 billion?

While online advertising still has growth left in it, it remains to be seen whether Google’s presence in the increasing online advertising market will actually justify such a market cap.

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