Evaluating the Effect of the Market Environment on the Business Success of Online Newspapers

In the management literature it has been argued that the market environment conditions should have a substantial effect on business success. However, the present literature regarding online newspapers has more or less neglected this viewpoint and investigated the effects of only some aspects of the market environment like the structure of the online newspaper market and the role of geography. Therefore, in this research our focus was on analyzing empirically how the market environment factors influenced the business success of online newspaper. As the outcome of our statistical analysis based on data from 42 online newspapers, we suggest that a high level of perceived demand turbulence (basically as a result of unstable user needs) was related to difficulties in generating revenue. Also the perceived level of competition seemed to be connected to revenue accumulation. The harder the perceived competition was, the greater the effect of demand turbulence appeared to be. The enhanced success model, including the company’s experience in online publishing, the perceived level of demand turbulence and the intensity of competition as predictors of annual revenue, achieved a considerably high explanatory power. The management implications of these findings are discussed.