Everyday, more and more individuals are making the switch from traditional news sources (newspapers, magazines, etc.) to the Internet. Unlike periodicals, which come out daily or weekly, the web updates continuously, offering faster access to breaking news stories, regardless of the time of day. In response to the population's shift to the Internet, most news corporations, such as The New York Times (NYT) and Time Warner (TWX), have bolstered their web-based operations and continue to seek new strategies that will attract additional readers.
Typically, Internet traffic increases when a big story hits the streets and individuals flock to the web in search of information. For instance, Michael Jackson unexpectedly passed away recently and millions of people flooded the Internet in search of the story. Unfortunately, the sudden spike in traffic caused People Magazine's site (People.com) to have problems delivering content to all those who sought it.
The problems at People Magazine's Web site likely resulted in lost revenue for its parent company, Time Warner. For sites, such as People.com that provide much of their content for free, downtime of any kind clearly hampers the ability to display advertising. Not being able to take advantage of unique news events because of technological limitations just compounds that problem. Moreover, if current site visitors and other potential visitors have to seek information from another source, sites that have ongoing problems meeting heightened demand may find themselves marginalized in the future as the Internet audience can be very fickle. This is clearly an issue about which publishers trying to shift to the online world need to be aware. In fact, they should be more than just aware, they should be prepared.
These types of problems also have hampered Ticketmaster Entertainment (TKTM), which sells tickets to live sports and entertainment performances that are often event driven. For example when rock band Phish, a very popular group in some circles, reunited after many years, demand for tickets to its upcoming tour was so intense that it caused Ticketmaster's website to buckle under the strain.
It is obvious that, at present, neither the preparedness nor the technology is up to the task of handling extreme load situations. The blame cannot be placed on just one facet of the Internet's infrastructure. Service providers (such as Comcast (CMCSK) and Verizon (VZ)), hardware suppliers (such as IBM (IBM) and Cisco (CSCO)), and software designers (such as Microsoft (MSFT) and Akamai Technologies (AKAM)) are all part of the problem. They also hold the keys to the eventual solution.