BUSINESS BLOGS
BUSINESS BLOGS
category: business
11 Dec 2006
related tags: Internet & Web | Stat of the Day |

I am getting a kick watching a few people talk about the de-portalization trend online (love the visuals here though).  Why?

Here’s a stat or two to put things into perspective:

- US advertising grew 30% in 2005 to $12.5 billion.  I know, nothing new there.
- In Q1, 2006, it grew by another 36%.  I know, been there, done that.
- The share that went to the Top 10?  A whopping 72% of the overall ad revenue.
- The share that went to the Top 50?  Sit down folks: 95% of total ad revenue.

Listen, as the founder of a media property that produces, publishes and aggregates different types of content (blogs, video, contests, etc) along vertical categories (auto, tech, music, etc), nothing would make me happier than seeing this so-called deportalization take place, but the fact remains that the Pareto principle has applied to every imaginable thing out there and the Web will be no different. 

What is the Pareto principle?  

When the dust settles, the top 20% of websites will get 80% of ad revenues.  It’s that simple.  Portals might change in shape, form or nature, but whatever they represent loosely will still get the bulk of revenues and traffic.

In other words, yes, there will be a trickle down factor of revenues, but that has more to do with there being more revenues online, the bulk of the revenue, however, will always go to the top players.

As per the top players, well, it should be noted that people find 8 out of 10 sites after a search, so the search companies will look more and more like portals.  Hmm… which is what has been happening with Google for some time now.

In other words, the phenomena is not so much de-portalization but a re-assessment of what makes up a portal.  Those who first referred to the phenomena agree that the term is not appropriate, while others say that whatever the term implies, it’s nothing new.

After all, MySpace was referred to as a “lifestyle portal” a month ago by News Corp.  This month, a report comes out saying that social networks like MySpace send out a lot of traffic to e-commerce sites because a lot of people start off their Web surfing from them… again, that is a portal.  For a look at the link between social networks and commerce, click here.

The portals, historically, have been coined as such because they garner a) the bulk of web traffic and b) the bulk of the revenues.

That, my friends, will not change.  Don’t take it from me, take it from Pareto.