I have been arguing for a while that in the aggregate the tech sector is fine, and the state of advertising-based services is a perfect example of what I mean: taken as a basket the six companies in this article (Google, Facebook, Yahoo, Twitter, LinkedIn, and Yelp) are up 19% over the last year, even though the latter four companies are down a collective 53%; the fact that Google and Facebook are up a combined 31% more than makes up for it.
This is a fantastic article on the consolidation of online advertising and it shows why these two properties are earning the majority of the profits and why ad companies get the rest because given 10 million to an advertising agency to push ads to half a million websites immediately is much easier than emailing my favorite blog and offering them $500 a month and doing that a twenty thousand times.
Sales teams are expensive so if you have a top 500 website, you could hire a sales person to find advertisers and treat your readers with respect but that’s hard. It’s far easier to embed javascript in 10 different places on your website and watch the cash just roll in the front door.
Someone linked me to Politico last week and it was a 20 megabyte download to read a paragraph of text that only weighed 600 bytes. That domain is now on my DNS block list at home.