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Year in review: Nothing comes cheap

Shifting winds in the Internet economy sent the online ad market into a tailspin. New formats and flashier ideas tried to bring it back on course. Meanwhile, subscriptions replaced free offerings on countless Web sites.

3 min read

Money talks; freebies flop
Paid services attempt to fill ad void
When companies tightened their belts this year, freebies were among the first services choked off.

Such moves weren't surprising, as the New Economy's collapse left many companies gasping for breath. Financial worries weighed heavily on countless businesses. Others, such as Napster, were effectively flattened by legal pressures. Then a few companies had a bright idea: Make Web users pay.

But would people struggling through a slippery job market and soggy economy part with cash for content, services and entertainment online? Net access providers were among the first to place that bet, shutting free services they could no longer support with advertising. Then record labels moved to lock down copyrighted songs so they couldn't be shared for free. Other companies slapped price tags on streamed video, auction listings and home page services.

Despite hopes that subscriptions and consumers would hit it off, companies continued to woo deep-pocketed advertisers. To keep their businesses afloat, most turned on the charm by giving advertisers just about anything. SUVs drove across Web pages. Ad spots filled an entire computer screen. Static promotions evolved into flashy, TV-inspired commercials. Bigger became better, and nothing seemed to be too bold or brash.

Some analysts and media executives say they expect such efforts to spark a turnaround in the Net ad market by mid-2002. But will getting in consumers' faces persuade people to buy more products or run away?

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 Would you pay cash for Web content
Person on the street
March 29, 2001

Death of the free Web
special coverage The notion of an indefinitely free Web is exposed as a fallacy, pushing companies reliant on advertising revenues to protect themselves with subscription plans and flashy ad formats.
June 6, 2001
AOL hikes subscription rates
The online behemoth raises its monthly Net access price by 9 percent, testing consumers' appetite for the service; competitors follow with their own rate increases.
May 22, 2001
Court gives Napster a break
special coverage The file-swapping company is ordered to stop trading some music, but a federal judge lets it keep the service running and pursue settlements with the music industry.
March 6, 2001
Is Napster a losing bet?
The respite was for naught. Despite a $60 million loan from Bertelsmann, Napster has lost millions of former fans to alternative services, and its planned relaunch is postponed until 2002.
November 6, 2001
Yahoo's ad ache
special coverage Even the Net bellwether suffers from a shortage of online advertising revenue; it warns that yearly earnings will be lower than expected, and CEO Tim Koogle steps aside.
March 8, 2001
Yahoo streams toward fees
The Web portal digs deep for new goldmines, testing subscription plans for everything from streaming video to personal ads and home page hosting.
October 29, 2001
If you post it, will they pay?
As free services from Napster to BlueLight struggle to survive, other companies begin charging for content. But it remains to be seen whether people will open their wallets.
March 29, 2001
DoubleClick doubles down
special coverage Online ad companies are convinced the Net is still a worthy marketing medium, but they're also diversifying their businesses to ensure the money rolls in even if advertisers back out.
June 21, 2001
Sites prey on rivals' stores
Attracting traditional advertisers and their deep pockets could be difficult with the advent of applications such as Gator, which lets marketers place ads on rivals' Web pages.
August 7, 2001
Hopes run high for Net ad market
Although online advertising spent the year reeling from the New Economy's crash, analysts and media executives see the market recovering in the next six months.
December 11, 2001

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• GoTo gains amid Web pains
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• Ad industry's tough sell: itself
• BlueLight illuminates service limits