Google Stock: Barron's doesn't Get It

It's taken over twelve years since the inception of the web, but the Internet is now tied with TV as the the main source of entertainment for most people. The average online user is now surfing 14 hours a week online. Compare this to one hour a week reading magazines, two hours a week looking at newspapers, and five hours a week tuning into radio. For all people who use the internet at least once a month, their time online is now tied to TV watching, which also averages 14 hours a week.

These are the results of a recent Jupiter Research Study which interviewed 3,000 people who go online at least once a month from home, work or school.

And yet, advertisers are still not online in a big way. Internet advertising has only recently tied yellow page advertising volumes which total about five percent of total advertiser spending. It's nowhere near what advertisers are still spending on newspapers, magazines and TV. The huge multi-million dollar advertisers are still allocating only relatively tiny portions of their ad budgets to the web. The same goes for the millions of small businesses, which may on average spend a few thousand dollars a year for marketing but are still in the habit of handing over these dollars to local newspapers, magazines, radio and yellow pages.

Basically there is a lot of catching up to do for advertisers to switch over to that new venue where their customers are actually hanging out these days. And we are talking hundreds of billions of dollars annually.

Internet advertising (especially contextual advertising via the search engines and participating websites) is the future of where the bulk of advertising dollars will go. Many of these dollars will find the new sweet spot sometime in the next couple of years. Any analyst who doesn't understand this just doesn't get it.