Heading for a Recession?

Fed Chairman Bernanke says not exactly; Henry Blodget says probably.

The central difference between today and 2000-2001, however, is that consumers are now online and depend on the Internet in ways they did not the first time around. Plus, advertisers are convinced that they’re not getting the same value they once did from traditional media.

So what will happen?

There may be more online spending with the top sites (Google, Yahoo, MSFT, MySpace, etc.) and less everywhere else. Advertisers cannot afford to ignore the Internet because that’s where large numbers of people are spending lots of time. And in an environment of fear and retrenchment, they won’t want to pay the comparatively high ad rates in newspapers, mags, TV, print YP, etc.

In such an environment Google, Yahoo and a few ad networks may prosper, relatively speaking, because they’ve got scale and are safe, while others suffer and many of the marginal “Web 2.0” companies tank and fold.

Time to sell everyone . . .


The other thing we might see is more consolidation: an investment in Yahoo or a sale of AOL, etc. Blodget has a pretty detailed rationale why he thinks AOL should be sold to Yahoo.


4 Responses to “Heading for a Recession?”

  1. Ben Saren Says:

    Is this an official call to arms!? I like it! We’ll be battle station ready in 24 hours.

  2. AhmedF Says:

    Oof. Living on borrowed money is living on borrowed time. Still I do think the internet will come out much better than last time.

  3. Local SEO Guide Says:

    Per Shotland’s Second Law of Socially Networked Economics the more the media continue to write linkbait articles about whether or not we are heading into a recession the more likely it is to happen. We need a new baby panda or something to distract these journalists and bloggers who have nothing better to write about. QED.

  4. Ben Saren Says:

    How about a baby panda sneezing? I can hook you up with one of those:


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