Rise in Blog Readership Threatens Online Media Stocks

A new report by the Pew Internet and American Life Project claims that both supply and demand for blogs is rocketing. Key stats:

• 8 million Americans say they have created blogs;
• Blog readership rose by 58% in 2004;
• 27% of internet users say they read blogs;
• 5% of internet users use RSS readers or aggregators, like My Yahoo!, Bloglines, or Newsfire;
• 62% of internet users still don't know what a blog is.

The surprise in the Pew numbers is the increase in blog readership and the uptake of RSS readers. The dramatic increase in the number of blogs created is known, as sites like Technorati regularly report on the number of blogs they track.

Stock impact: I've argued that blogs pose a threat to the publicly-traded online media companies, because targeted Web sites can take traffic from broader Web publishers. Key losers? CNET, particularly due to the success of gadget and technology blogs; TheStreet.com, as the number of financial and stock market blogs rise; and Yahoo, as RSS readers displace broad media aggregators.

You can view the entire report in PDF here.

Full disclosure: I'm short CNET and TSCM at the time of writing.