BIIA :: Business Information Industry Association

Information Industry Market Size and Top 20 Market Share Leaders

Information Industry Growth Slowed Significantly to 2.3%

Information industry growth continued to slow in 2008. Industry revenues grew 2.3% to just under $400 billion, compared to 6.6% growth in 2007 and 7.4% growth in 2006. The segments showed mixed financial results, with News Providers & Publishers (News) experiencing a 7.5% decline, an even greater decrease than we had predicted earlier in the year, and Search, Aggregation & Syndication continuing to prosper, with growth estimated at 16.1%. Table 1 shows revenues and growth rates in the 12 information industry segments Outsell defines and tracks.

Table 1. Preliminary Worldwide Information Revenue by Segment, 2008

Source: Outsell's Publishers & Information Providers Database
© 2009 Outsell, Inc. Reproduction strictly prohibited.

Key highlights include:

Google maintained its No. 1 position in the information industry for a third year in a row, despite an almost 50% fall in growth rate from 56.5% in 2007 to an estimated 31.0% in 2008. Its chief rival, Yahoo!, fared even worse in 2008, with growth falling from a relatively meager 8.5% in 2007 to a desultory 4.0% in 2008 (see Table 2).
Unlike in the past several years, Google was not the fastest growing company in the top 20 list. In 2008, that honor went to News Corporation with its estimated 2008 growth of 35.5% (moving it up from 11th in the list to seventh). This growth was largely due to the completion of its acquisition of Dow Jones. Thomson was hard on its heels with estimated growth of 30.0% owing to its acquisition of Reuters during the year. News Corp. excluded, newspaper companies generally fell in the top 20 listing for the second year in a row, with Gannett moving from seventh to eighth, The Tribune Company from 15th to 18th, and New York Times Company from 19th to 20th. The UK's Daily Mail and General Trust group moved up a position on the list to 12th place, owing in part to the strong performance of its DMG Information business-to-business portfolio.
Only five companies in 2008's top 20 reported double-digit growth, down from seven companies in 2007. There were also several cases of companies in the top 20 reporting revenue declines: in 2007, four companies reported falling revenues, and in 2008 this number increased to six. Nonetheless, as in previous years, the average performance of the top 20 companies exceeded that of the information industry as a whole, with an average growth rate for the top 20 of 8.5% compared to 2.3% for the whole market.

Table 2. Top 20 Information Industry Companies, Preliminary Worldwide Revenue Estimates, 2008

Source: Outsell's Publishers & Information Providers Database
© 2009 Outsell, Inc. Reproduction strictly prohibited.

Growth Continues, But at a Slower Pace

The growth of the information industry has slowed gradually over the last few years: starting with 6.3% in 2005, 7.4% in 2006, 6.6% in 2007, then slowing even more to 2.3% in 2008. Only one segment, Education & Training, has bucked this trend: all other segments, even those whose growth rates increased between 2005 and 2007, found that growth slowed in 2008 (see Figure 1). Falling growth rates in most segments (notably News, which has now displayed negative growth for two consecutive years) have contributed to slowing growth for the information industry as a whole over this period.

Outsell's 2008 Information Industry Market Size, Share & Forecast Report predicts, however, that growth will have reached its low point in 2008, and will rise thereafter, reaching annual growth of 5.3% by 2011. Changes in the wider economy clearly have a strong impact on this prediction, which Outsell revisits regularly to take changing market sentiment into account.

Figure 1. Declining Growth in the Information Industry, 2006 - 2008

Source: Outsell's Publishers & Information Providers Database
© 2009 Outsell, Inc. Reproduction strictly prohibited.

The Impact of Currency Conversion

Currency exchange rates between the US dollar and euros, pounds sterling, and the yen moved in different directions in 2008 (see Table 3). The yen added a major foreign exchange (FX) effect of 13.2% to information industry growth rates expressed in US dollars in 2008. The exchange rate for the euro added 7.7% to growth rates but the pound exchange rate subtracted 6.3% from growth rates. By contrast, growth rates from 2006 to 2007 originally reported in pounds, euros, and yen were increased by 8.6% (pounds and yen) to 9.1% (euros) by converting these results into dollars.

The US dollar weakened very modestly versus the pound during the first seven months of 2008, but then strengthened at a historically unprecedented rate for the last five months. In contrast, although the US dollar weakened significantly versus the euro for seven months in 2008, then reversed and strengthened during the rest of the year, it did not strengthen as much as it did against the pound, so the net currency impact for the euro is positive. Versus the yen, the dollar continued to weaken the last five months of the year.

Table 3. Currency Effects of Conversion from Pounds, Euros, and Yen into Dollars

This 2008 FX effect means that the 2008 revenue of an information company with 100% of its revenue reported in pounds that had zero local growth expressed in pounds, will nevertheless show 6.3% decline in revenue when those same flat local results are expressed in dollars. For a company with 50% of its revenue reported in pounds, the FX effect on the results expressed in dollars, in addition to any other changes in the company's results, is 50% of the whole effect, or an apparent additional rate of decline of 3.15% for dollar denominated results in addition to any changes in 2008 revenue compared to 2007 expressed in pounds, the local currency.

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