For Immediate Release

News Release

 

PALO ALTO, Calif., Feb. 23 /PRNewswire-FirstCall/ -- Piper Jaffray & Co. Internet Media and Marketing research team today published an in-depth, comprehensive research report titled, "The User Revolution," discussing the new advertising ecosystem and the rise of the Internet as a mass medium. In the report, the team outlines its expectations that global online advertising revenue will reach $81.1 billion by 2011, representing a 21 percent compound-annual-growth-rate (2006-2011).

The report defines user revolution as a major trend that is happening primarily with consumers, who are taking control of content consumption and branding. "The historically passive consumer is changing rapidly, not only becoming more informed and confident about purchase decisions, but also increasingly taking control of the consumption of information and content that used to be distributed by networks, studios, publishers and retailers," said Safa Rashtchy, senior research analyst at Piper Jaffray. "We believe this will cause a significant rise in prominence of the Internet as a major content consumption and marketing medium."

    There are 12 key themes discussed in "The User Revolution" report:
     1.  Global online advertising revenue to reach $81.1 billion by 2011.
     2.  Communitainment: Internet has increasingly become a principal medium
         for community, communication and entertainment -- three areas that
         have collided and are impacting each other's growth -- generating a
         new type of activity: communitainment. Communitainment is taking time
         away from other, traditional, types of content consumption on the
         Internet.
     3.  Usites -- The increasing popular category of user generated sites,
         which we are calling Usites, are driving traffic away from other
         destinations and pose a challenge to the advertisers and publishers.
     4.  The Internet is now a mainstream medium: The web is the leading
         medium at work and the second leading medium at home behind
         television.
     5.  Internet usage patterns are changing, favoring Usites,
         communitainment sites, search, and away from traditional portals.
     6.  User Generated Brands. The consumers are taking control of content
         consumption and branding.
     7.  Media Fragmentation: Advertisers increasingly will need to buy more
         inventory, from nearly all types of media, especially the Internet,
         to have the desired impact.
     8.  The Golden Search: search has become the new portal.
     9.  Google's dominance is likely to expand, partly fueled by a wide
         variety of non-search related products that create a virtuous cycle
         of brand affinity for Google.
     10. Video ads will be the driver of the next major growth in brand
         advertising and getting additional dollars shifted from traditional
         media to online.
     11. Ad networks are experiencing increased demand due to increasing
         Internet fragmentation, desire for more targeted inventory,
         increasing usage of networks for branding and increased site
         visibility.
     12. Agencies are rapidly evolving into more sophisticated,
         technology-savvy entities that combine best of breed offerings.

The report also lists the most important companies to watch during this revolution, companies that are likely to benefit most, or be highly impacted by these trends. These companies include: Google (and YouTube), Yahoo!, Disney, News Corp., Time Warner, Microsoft, InterActive, Facebook, Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick, 24/7 Media, Netflix, Wikipedia, MobiTV, Digg and Hakia.

"Like many major social trends, the changes will not happen overnight and we expect the User Revolution, which has just begun, to last several years before the new regime is fully established and the old statues have all been toppled over," said Rashtchy.

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Disclaimers

Piper Jaffray does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decisions. This report should be read in conjunction with important disclosure information at the following site: http://www.piperjaffray.com/researchdisclosures .

SOURCE Piper Jaffray & Co.

CONTACT: Susan Beatty, Public Relations and Communications of Piper Jaffray, +1-612-303-5680