Major Web Brands Struggle to Make Money

By Douglas A. McIntyre Updated Feb 3, 11:57AM EST · Published Dec 21, 6:27AM EST

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Nielsen released its top Web brands for 2012, and Comscore its most visited sites list for November. The two lists overlap, almost completely, when their top 10 are lined up with one another. The most striking aspect of the two lists, when taken together, is the extent to which the companies on them are not terribly good businesses in most cases.

Google Inc. (NASDAQ: GOOG), which tops both lists, does very well financially and has maintained rapid growth and strong earnings. But its place among the largest sites is unique. Search has become the most important utility of the Web, and Google controls two-thirds of the U.S. market.

Facebook Inc. (NASDAQ: FB) is in the second spot on the Nielsen site and fourth on Comscore’s list. Facebook has proven so far that the viability of its business as one that can produce large profits is extremely limited. It has been unable to turn its one billion users into a pool of people on which it can make money, and it continues to struggle to find a path to earnings growth. Its shares have paid the price for its troubles.

Yahoo! Inc. (NASDAQ: YHOO) is in second place on the Comscore list and third on Nielsen’s. The press has had a field day covering Yahoo!’s efforts to turn itself around for years, as it struggles to make money in the online portal business, continues to post flat revenue growth and cuts thousands of people to maintain margins. So far, its plans for earnings improvement have not succeeded. Its share price indicates that Wall St. does not think it can change that.

Microsoft Corp. (NASDAQ: MSFT) properties MSN/Bing/Windows Live are in the fifth spot on the Nielsen list and third place on Comscore’s. Comscore measures Microsoft sites differently than Nielsen does because it rolls up Microsoft’s commercial sites with its portal and search. No matter how the audience is parsed, MSN and Bing have posted losses for Microsoft for years as the software giant tries to effectively compete with Google in the search business and AOL Inc. (NYSE: AOL) and Yahoo! in the portal segment.

AOL sits in sixth place on the Comscore measurement and seventh on Nielsen’s. The old portal has battled to grow and make money, even with the addition of traffic and premium content that come from the Huffington Post.

There are not many industries in which almost all the leaders have struggled and continue to struggle to make money. The Internet, perhaps the greatest invention in the recent history of technology, has not been kind to the largest companies that rely on it for their successes.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.