PJC Piper Jaffray Companies

PALO ALTO, Calif., Feb. 23 /PRNewswire-FirstCall/ -- Piper Jaffray & Co. Internet Media and Marketing research team today published an in-depth, comprehensive research report titled, "The User Revolution," discussing the new advertising ecosystem and the rise of the Internet as a mass medium. In the report, the team outlines its expectations that global online advertising revenue will reach $81.1 billion by 2011, representing a 21 percent compound-annual-growth-rate (2006-2011). The report defines user revolution as a major trend that is happening primarily with consumers, who are taking control of content consumption and branding. "The historically passive consumer is changing rapidly, not only becoming more informed and confident about purchase decisions, but also increasingly taking control of the consumption of information and content that used to be distributed by networks, studios, publishers and retailers," said Safa Rashtchy, senior research analyst at Piper Jaffray. "We believe this will cause a significant rise in prominence of the Internet as a major content consumption and marketing medium." There are 12 key themes discussed in "The User Revolution" report: 1. Global online advertising revenue to reach $81.1 billion by 2011. 2. Communitainment: Internet has increasingly become a principal medium for community, communication and entertainment -- three areas that have collided and are impacting each other's growth -- generating a new type of activity: communitainment. Communitainment is taking time away from other, traditional, types of content consumption on the Internet. 3. Usites -- The increasing popular category of user generated sites, which we are calling Usites, are driving traffic away from other destinations and pose a challenge to the advertisers and publishers. 4. The Internet is now a mainstream medium: The web is the leading medium at work and the second leading medium at home behind television. 5. Internet usage patterns are changing, favoring Usites, communitainment sites, search, and away from traditional portals. 6. User Generated Brands. The consumers are taking control of content consumption and branding. 7. Media Fragmentation: Advertisers increasingly will need to buy more inventory, from nearly all types of media, especially the Internet, to have the desired impact. 8. The Golden Search: search has become the new portal. 9. Google's dominance is likely to expand, partly fueled by a wide variety of non-search related products that create a virtuous cycle of brand affinity for Google. 10. Video ads will be the driver of the next major growth in brand advertising and getting additional dollars shifted from traditional media to online. 11. Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding and increased site visibility. 12. Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings. The report also lists the most important companies to watch during this revolution, companies that are likely to benefit most, or be highly impacted by these trends. These companies include: Google (and YouTube), Yahoo!, Disney, News Corp., Time Warner, Microsoft, InterActive, Facebook, Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick, 24/7 Media, Netflix, Wikipedia, MobiTV, Digg and Hakia. "Like many major social trends, the changes will not happen overnight and we expect the User Revolution, which has just begun, to last several years before the new regime is fully established and the old statues have all been toppled over," said Rashtchy. About Piper Jaffray Piper Jaffray Companies is a leading, international middle market investment bank and institutional securities firm, serving the needs of middle market corporations, private equity groups, public entities, nonprofit clients and institutional investors. Founded in 1895, Piper Jaffray provides a comprehensive set of products and services, including equity and debt capital markets products; public finance services; mergers and acquisitions advisory services; high-yield and structured products; institutional equity and fixed-income sales and trading; and equity and high-yield research. With headquarters in Minneapolis, Piper Jaffray has 25 offices across the United States and international locations in London and Shanghai. The firm's UK operating subsidiary, Piper Jaffray Ltd., is authorized and regulated by the Financial Services Authority and is a member of the London Stock Exchange. Piper Jaffray & Co. is the firm's principal operating subsidiary. (NYSE:PJC) ( http://www.piperjaffray.com/ ) Since 1895. Member SIPC and NYSE. Disclaimers Piper Jaffray does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decisions. This report should be read in conjunction with important disclosure information at the following site: http://www.piperjaffray.com/researchdisclosures . DATASOURCE: Piper Jaffray & Co. CONTACT: Susan Beatty, Public Relations and Communications of Piper Jaffray, +1-612-303-5680 Web site: http://www.piperjaffray.com/

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