Web buying spree for big media

The Detroit News ran a story yesterday highlighting the value large media companies are placing on Internet sites. The reason – advertisers see the potential for reaching a targeted audience.

About.com is among the many Web properties that traditional media companies have snapped up this year as they scramble to cash in on the second big Internet advertising boom. While Internet ads claim a small slice of the overall ad pie — generating not quite $10 billion in the United States last year, less than 5 percent of all ad revenue — the online dollars grew more than 30 percent, much faster than off-line. In response, traditional media companies have been making some startling moves.

The New York Times Co. in March paid $410 million for About.com, a seemingly disjointed collection of articles covering thousands of topics. Perhaps more surprising was the $580 million cash purchase that News Corp. announced in July of MySpace.com, another hodgepodge with more traffic than name recognition.

Three newspaper chains jointly paid $64 million for a stake in online news aggregator Topix.net, while Dow Jones & Co. bought financial site MarketWatch.com for more than $520 million and The Washington Post Co. picked up online magazine Slate for an undisclosed sum.

I get the same feeling today as I did when I started my dotcom company, Prairielaw.com, in 1997. Businesses placing great value on Internet space. I do not see the bust this time around though. We have substantially more people and businesses using the Internet and the values being placed on Internet properties are based on revenues and profits, not something as nebulous as page views.

For law firms, this means get going on some effective Internet marketing. The net is here to stay as an effective way to reach your target audience.