KEY POINTS:
American President-elect Barack Obama gets my award for the new media star of 2008, probably the most digitally eventful year of the 21st century. His historic achievement of raising more than US$500m from mainly small donors on the internet for his Presidential campaign has not only dramatically changed the logistics of American politics but has already begun to revolutionise the financing of electoral campaigns around the democratic world.
His utilisation of social networks such as YouTube and Facebook has demonstrated the potential of the internet to successfully build and distribute new political brands. And Obama's promise of providing universal broadband coverage for all US citizens will inevitably compound the ubiquity of the internet in his nation's commercial and cultural life.
If Obama is the undisputed internet star of 2008, then Jerry Yang, the co-founder and former CEO of Yahoo!, is the loser. Just as Obama is using the internet to rebuild the American brand, so Yang spent 2008 destroying his once all-conquering Yahoo! internet business by failing to successfully close January's proposed $44.6 acquisition by Microsoft.
After 11 months of amateurishly negotiated confusion, Yang resigned as Yahoo!'s CEO in November with the company's stock price 15 points lower and his own personal fortune down $900m. After laying off 10 per cent of its global workforce earlier this month, Yahoo! has become the most bandaged of Silicon Valley's walking wounded, a once proud Web 1.0 company searching for a reason to believe in a Web 2.0 wiki-world of social networks and micro-blogs.
Yahoo! was not the only internet company laying people off in the wake of the October financial meltdown. More than 100,000 technology workers lost their jobs in the last quarter of 2008, with significant layoffs at blue chip new media companies such as Real Networks, CNET and the internet divisions of Viacom and NBC.
But in contrast with Wall Street, Detroit or the print newspaper business, 2008 hasn't been an annus horribilis for new media. Indeed, the internet continued its relentless march to replace dying print newspapers as the information medium of choice with America's Pew Research Centre reporting earlier this month that 40 per cent of Americans now get their news from increasingly buoyant information websites like the Huffington Post and Techcrunch as compared to only 35 per cent from print newspapers.
In 2008, it became obvious that news is shifting from print to dynamic micro-blogging services like Twitter. Information is becoming real-time with the tragic November attacks in Mumbai being so heavily reported by correspondents on Twitter that the Indian police became nervous that the terrorists themselves were relying on the Silicon Valley network as an intelligence device.
The increasingly iconic Twitter wins my award for the most influential new media company of 2008, with the revenue-less company turning down an estimated $500m cash acquisition from Facebook and instead announcing a strategic deal earlier this month with Google.
In contrast with Yahoo!, 2008 was not a bad year for Google which continues to monopolise the online query business with more than 60 per cent of Americans relying on the ubiquitous search engine, whose core AdWord business remains enviously robust.
But Google continues to struggle to establish a viable second business to rival search which partially accounts for its stock price dropping from just under $700 per share at the end of 2007 to just over $300 at the end of the year. YouTube remains a massively trafficked but hard to monetise video portal still under the cloud of Viacom's ongoing $1bn lawsuit against pirated content on the site.
Many other 2008 Google strategic initiatives - such as its new Chrome browser, its Android mobile telephone and its knowledge wiki Knol - appear half-baked, especially in terms of realising serious revenue.
If Google has to struggle with an engineering culture that often appears to favour innovation for the sake of innovation, the greatest threat to Apple has nothing to do with technology, lawsuits or even revenue. Their second generation 3G iPhone was one of the few blockbuster hits of 2008, with analysts estimating 14 million global iPhone sales in 2008 and iPhone App sales estimated to be between $50 and $100m.
No, Apple's big problem is all-too-human. Rumours continue to swirl about the health of CEO, Steve Jobs, the father of the iPod and the iPhone and still the most influential figure in Silicon Valley. Many believe that Jobs' pancreatic cancer might have returned, which accounts for the crash in Apple's stock and the increasingly pessimistic view about the long-term prospects of the company from analysts.
But with or without Jobs, the new media industry ended 2008 in relatively decent overall health. The year saw the convergence of TV and the internet, with the NBC and News Corp joint online video venture Hulu catching up with YouTube in revenue. Obama (and Sarah Palin) can take much of the credit for this with online video proving to be five times more popular in 2008 than it was during 2004's election.
Last year also witnessed the beginning of the convergence between the book and the internet, with Amazon's Kindle e-reader proving to be popular with consumers. Just as the internet has killed the CD, is killing the newspaper, the DVD and the TV, so it will eventually kill the book.
- THE INDEPENDENT
