Rising Ad Blocker Use Poses Risk to Web Content/Ad Stocks

by: SA Editors

Adblock Plus, a free browser plug-in which blocks website ads, now boasts 2.5 million users, according to its developer Wladimir Palant. Palant estimates that 300,000 to 400,000 new users download the ad blocker each month. Adblock Plus is the second most popular plug-in for Firefox. While ad blockers are also available for Internet Explorer, they aren't necessarily free or as effective. Adblock Plus blocks ads delivered by most commercial ad servers and large advertisers, and poses a threat to the revenue of Internet advertising companies such as Google, and Internet content companies such as Yahoo!, CNET, Microsoft, the New York Times, Time Warner and TheStreet.com. Some small web sites have retaliated by preventing access via the Firefox browser. One advocacy site, whyfirefoxisblocked.com, argues that "Accessing the content [of ad-supported web sites] while blocking the ads... would be no less than stealing." Web publishers haven't commented or responded, but that would likely change if adoption of ad blockers becomes significant. University of Chicago law professor Randal Picker predicts that the first response of web publishers would be technological rather than legal.

Sources: New York Times, whyfirefoxisblocked.com, Adblock Plus blog
Commentary: Firefox good or bad for ad click rates?Key quotes from the Fastclick S-1How big a problem is click-fraud?
Stocks/ETFs to watch: NYT, DJ, TSCM, TWX, MSFT, GOOG, YHOO, CNET
Related: Randal Picker's commentary

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