Yahoo filed its final quarterly report this week. And just like that, the once-mighty tech firm is exiting public trading.
The company has been unraveling—slowly and spectacularly—for more than a decade now. But this particular moment is a good one for reflecting on how Yahoo’s troubles are likely to be replicated in a wave across the web, and soon, among businesses like news organizations that rely heavily on advertising revenue for their survival.
Print newspapers will continue to fold, but Yahoo’s demise is a signal that web-native companies are next. If you run a business that relies on digital-advertising revenue for an outsized portion of your funding, you need to find new streams of revenue. Now. It may already be too late.
Unless you’re Facebook or Google, that is. Facebook and Google are practically drowning in ad revenue—together they command a huge portion of global digital-ad dollars—and that’s the root of the problem for every other business trying to clamor for a piece of it. The precise estimates vary. One often-repeated stat, based on last year’s financials, is that Facebook and Google account for 85-percent of every new dollar spent on digital advertising.
But the numbers may be even more stark than that. Jason Kint, the CEO of Digital Content Next, estimates that Facebook and Google accounted for about 99 percent of all advertising growth in the third quarter of 2016—54 percent of the pie for Google, 45 percent of it for Facebook, 1 percent for everybody else. (That’s based on numbers from the each company’s public financial records and data from the Interactive Advertising Bureau, a trade group for advertisers.)