ContentNext Media Index Up 10 Percent For Year; 7 Percent Since Launch

imageIn September, we launched the ContentNext Media Index, an index of the top 100 US-traded companies in our purview. Despite a slew of market-rocking stories, particularly in the second half of the year, the index, along with the major averages, turned in solid gains, with the market extending a multi-year bull market. We set the ContentNextDex at 1000 on Sept. 10, so the year’s closing price of 1069.68 marks a 6.9 percent gain since then. Had it been in existence, the index would have closed 2006 at 969.66, for a full-year gain of 10.3 percent. That move narrowly edges out the NASDAQ’s 9.8 percent gain for the year.

You know who some of the big name winners were: Google (NSDQ: GOOG) had a monster year, gaining 50 percent. That was dwarfed, though, by Apple’s (NSDQ: AAPL) 133 percent rise and Amazon’s (NSDQ: AMZN) 134 percent. Although its gains weren’t quite so eye-popping, Microsoft (NSDQ: MSFT) had one of its best years in a long time, as it rose by almost 21 percent — quite impressive considering its size.

With few exceptions, the market was unkind to traditional media: Percentage losers included Time Warner (NYSE: TWX) (-23), News Corp (NYSE: NWS). (-4), Disney (NYSE: DIS) (-4.7), Comcast (NSDQ: CMCSA) (-35), Warner Music Group (NYSE: WMG) (-72) and CBS (NYSE: CBS) (-9.8). As for newspapers, the only ones that did well this year were the ones that got bought (Dow Jones, Tribune). The rest had a very rough year, for reasons that have been discussed ad infinitum. An exception to the punk performance from traditional media was Viacom (NYSE: VIA) (+7), which ended near the highs of the year, after staging a strong rally over the last few months of the year.

The Chinese economy was a big story all year. US companies are eager to capitalize, but investors rewarded the firms that are already on the ground running. Big percentage gainers included Baidu (NSDQ: BIDU) (+245), Sohu.com (NSDQ: SOHU) (+127) and Shanda (NSDQ: SNDA) (+54). Even Yahoo (NSDQ: YHOO), which had a rough year overall, losing 9 percent, got a boost when analysts started talking up the value of its Alibaba holdings.

Other notable percentage movers: Akamai (NSDQ: AKAM) (-35), eBay (NSDQ: EBAY) (+10.3), IACI (NSDQ: IACI) (-28), Sprint (NYSE: S) (-30).

Bottom line: The 10 percent headline gain is only a starting point for understanding what happened this year. Within the top 100 digital media companies, there’s plenty of variety, so the trends we saw play out this year affected different companies quite differently. How the market digested trends in digital media can’t be summed up neatly with a single number.

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