January 30, 2009

Online Media & Search: Major Trends of 2008Outlook for 2009

Study & Methodology

• With 2008 officially in the history books, Compete took a look back at the major trends in Online Media & Search over the past year and made some predictions for 2009

• Based on the daily web usage of more than two million members of the Compete community, Compete calculates and estimates total US-based traffic for nearly every site on the web

• Analyzing US traffic to the leading search engines and online media sites, Compete synthesized the major trends of 2008– The top 5 search engines account for 95% of internet searches– The top 1,000 sites account for a major share of online media

engagement

• Google led the way again in 2008, capturing 68% market share of 116 billion search queries made last year, up 8 ppts versus 2007

Search Query ShareShare of all search queries at the leading 5 engines, January – December 2008

2008

60%

68%

Dec-07 Dec-08

Query Share

68%

21%

7%3% 1%

• In a year when most other search engines lost or slightly grew query volume, Google grew 49% to nearly 8b monthly queries

Search Query VolumeVolume of monthly search queries at the leading 5 engines, December 2007 – 2008

49%

6%

10%

-11%

-24%

Query Volume (Billions) Year-over-Year ∆(December 2007 vs. 2008)

0

1

2

3

4

5

6

7

8

9

Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

0%

10%

20%

30%

40%

50%

60%

70%

80%

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

Yahoo MSN Ask AOL

Searchers Engine Loyalty

Searchers and Engine Loyalty

• Google had the most searchers, and the highest rate of loyalty

Volume of searchers and percentage to use only that engine, January – December 2008

Read as, “26M people searched at Ask in December 2008, of which

12% searched only at Ask”

Number of Searchers and Engine Loyalty

Sear

cher

s

64% 25% 12% 14% 12%Average Loyalty

Queries per Searcher

• Google and Live Search (including MSN but not Club Live) saw strong growth in queries per searcher, a key engagement measure

Average Queries per Searcher at the leading 5 engines, December 2007 – 2008

-

10

20

30

40

50

60

70

Google Yahoo MSN Ask AOL

Queries per Searcher

31% 1% 36% -30% -21%Year-over-Year ∆

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

D J F M A M J J A S O N D D J F M A M J J A S O N D D J F M A M J J A S O N D D J F M A M J J A S O N D

Google Yahoo MSN Ask

Referrals Sponsored Referrals

Referrals and Sponsored Referral Share

• Yahoo had the highest average rate of sponsored referrals

Volume of referrals and percentage that were sponsored (paid), December 2007 – 2008

Read as, “Live made 114M search referrals in December

2008, of which 8% were sponsored referrals”

Referral Volume and Sponsored Share

Refe

rral

s

7% 10% 3% 4%Average Sponsored Rate

Online MediaBroadly speaking, the top 1,000 media sites fall into two categories

Publisher MediaPublisher Media Social MediaSocial Media

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

Media Category Growth and Reach

• The US internet population grew faster than the Top 1k Media sites in 2008

Media category Unique Visitor volume and share of Internet Population, December 2007 – 2008

4% -8 ppts -7 pptsYear-over-Year ∆(December 2007 vs. 2008)

Uni

que

Visi

tors

Reach

Media Category Unique Visitor Growth and Reach

Publisher UVPublisher UV Publisher ReachPublisher ReachSocial UVSocial UV Social ReachSocial Reach

7%

-

1.0

2.0

3.0

4.0

5.0

6.0

-

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

Media Category Visitation

• Visits to Publishers rose 33%, while number of Social sites visited rose 23%

Media category visits and average sites per unique visitor, December 2007 – 2008

33% 19% 23%Year-over-Year ∆(December 2007 vs. 2008)

Visi

tsAverage Sites/U

nique Visitor

Media Category Unique Visitor Growth and Reach

Publisher VisitsPublisher Visits Avg. # of Pub SitesAvg. # of Pub SitesSocial VisitsSocial Visits Avg. # of Social SitesAvg. # of Social Sites

28%

• Social Media took the lion’s share of the 2.1 trillion page views made at the top 1k media sites last year, nearly doubling 2007 PV volume

Page View ShareShare of all page views at the Top 1,000 Media sites, December 2007 – 2008

15%

85%

Publisher MediaPublisher Media

Social MediaSocial Media

Year-over-Year ∆(December 2007 vs. 2008)

2008

64%

94%

Publishers Social Media

• Social Media also took 79% of the 9 billion hours spent at the top 1k media sites last year, however that was down 1% versus 2007

Share of Time SpentShare of all time spent at the Top 1,000 Media sites, December 2007 – 2008

Publisher MediaPublisher Media

Social MediaSocial Media

Year-over-Year ∆(December 2007 vs. 2008)

21%

79%

2008

8%

-1%Publishers Social Media

-

100

200

300

400

500

600

700

800

Dec

-07

Jan-

08

Feb-

08

Mar

-08

Apr

-08

May

-…

Jun-

08

Jul-0

8

Aug

-08

Sep-

08

Oct

-08

Nov

-08

Dec

-08

-

50

100

150

200

250

300

• Social Media grew Pages Views enormously at the expense of Time Spent

Trended Page Views and Time SpentPage Views and Hours per UV at the Top 1,000 Media sites, December 2007 – 2008

57% 33% -7%Year-over-Year ∆(December 2007 vs. 2008) 81%

Page View and Time Spent per Unique Visitor

Page

Vie

ws

Hou

rs

PublishersPublishers Social MediaSocial Media

Outlook for 2009

• Look for Google momentum to continue growth in query volume and market share in 2009– Watch out for Microsoft to as they invest in improving queries per

searcher and searcher loyalty– Possible Yahoo partnership with Microsoft would create a real rival to

Google, with a combined 30% query share and strong base of loyalists

• Look for visitors and reach at Publisher and Social Media sites to level in 2009, but engagement to skyrocket– Expect Social Media to harmonize page views and time spent, striking

a balance between user engagement and display CPM– Publishers should continue to integrate Social Media functionality to

narrow the Social Media edge

Thank you

Media inquiries, please contact:

Alex PatriquinSenior AssociateOnline Media & SearchCompete, a TNS Media Companyp: 617-933-5724e: apatriquin@compete.com