Chances Are, You've Only Surfed A Few Sites Today

For more than a year now, consumer advocates and promoters of media diversity have warned about cyberhogs: giant companies that draw most of the traffic on the Internet. The fears swelled in the wake of AOL's January acquisition of Time Warner. Now, critics of media concentration have fresh ammunition: A study released Monday by market researcher Jupiter Media Maxtrix finds that just four companies-AOL Time Warner, Microsoft, Yahoo! and Napster-control roughly half of the time Internet users spend online. That's down from 11 companies two years ago. Moreover, 60 percent of online time is controlled by only 14 companies, a breathtaking plunge from 110 companies in 1999. That's "an incontrovertible trend toward online media consolidation," the authors of the report wrote.

Jupiter says the numbers should be viewed as a cautionary sign-particularly by Washington regulators. The message: don't believe the hype from proponents of media deregulation. "Regulators should think twice about granting carte blanche to top-tier media corporations in their efforts to expand beyond their existing markets," the report warns.

As a rationale for loosening the rules that restrict the scope and reach of ownership of radio, television and newspaper properties, advocates have argued that the Internet prevents the dangerous concentration of information in too few hands. The argument appears to have had an impact. Recent rule changes allow broadcasters to own two television stations and radio outlets in the same market. Viacom owns two networks, CBS and UPN, as a result of a ruling this year by the Federal Communications Commission. And many observers expect the FCC to lift a ban on co-ownership of newspapers and broadcast outlets in the same market.

"The traffic pattern on the Internet is much closer to that of network television in 1960s (the era of the Big Three networks) than to that of the Internet of the early 1990s when diversity and competition still prevailed," says Jeff Chester, former head of the Center for Media Education. He launched a new advocacy group two weeks ago, The Center for Digital Democracy, which he says is dedicated to open access and diversity online. He says his group will be lobbying Sen. Ernest Hollings, the Democrat now in line to become chairman of the Senate Commerce Committee, to hold hearings on the impact of consolidation in cyberspace.

Jupiter says there are several reasons for the consolidation of Internet traffic. For one thing, there's the dealmaking between big Web players. AOL as a stand-alone company in 1999 ranked No.1 in traffic. With its acquisition of Time Warner, which ranked No. 11 in 1999, AOL now controls 32 percent of all time spent on the Net. That translates into something like 107 billion monthly minutes, says Jupiter. A spokeswoman for AOL Time Warner declined comment, saying that the company has yet to see the report.

Giant media also has the marketing muscle to draw a disproportionate number of users, Jupiter says. Plus, the quality of their sites is better than smaller Internet companies can offer. The giants are also able to drive traffic to their sites by cross-promoting them on cable and broadcast networks and in print. (NEWSWEEK, for instance, is part of a partnership between The Washington Post, NBC, MSNBC and MSNBC.com. The various properties all actively promote material produced by the other participants in the partnership.) Plus, the dotcom collapse of the past year also accounts for some of the consolidation of traffic.

"Does everyone have a microphone? Yes," says Mark Mooradian, a Jupiter vice president and senior analyst. "But are some microphones louder than others? Absolutely."