News readership may be up, but as anyone with a media business can tell you, the method of deploying that information is getting more problematic. And one of the businesses that has been receiving obituaries the last few months is the RSS reader.

But rather than an abrupt death, the RSS reader seems to be going the way of search, and ceding marketshare to Google. Which might be even more depressing.

According to ReadWriteWeb, RSS readers are on the wane. But within the market, Google has come to dominate.

The search giant has been steadily gaining marketshare in the RSS reader market over the past five years. When RWW started tracking readers in 2004, Bloglines had over half of the market and Google wasn’t even in the picture. But by 2007, Google had 59% of the market and Bloglines had dropped to 33%.

This year RWW went to its own Feedburner account for data:

Here is the top 10 for Dec 09:

1. Google Feedfetcher 85665 (includes both Google Reader and its start page iGoogle)
2. Bloglines 38797
3. Netvibes 34894
4. FriendFeed 16269
5. NewsGator Online 6753
6. Firefox Live Bookmarks 2999
7. PostRank 2454
8. Windows RSS Platform 1587
9. Mac OS X RSS Reader 1307
10. Zhuaxia 1127 (a Chinese RSS Reader)

While the numbers are far from scientific, the fact that Google dominates with twice the activity of bloglines is troubling for the market. Large companies like Google have the upper hand when it comes to
organizing information. And RSS feeds are just one way of organizing
news.

As TechCrunchIT put it this Spring in a post titled Rest in Peace, RSS:

“RSS changed the way we processed information, by turning search into
push and content into people. Before RSS, I patrolled the Web for news.
Information didn’t exist until I found it. RSS let me identify people
likely to write interesting things, and soon I stopped looking and
switched to receiving. In this world, partial feeds were irritating,
taking me out of my new pristine think tank and back to the hunt and
peck methodology. Once back on the site, the goal was to keep me there,
or link to partner sites…

Twitter, Facebook, FriendFeed – whatever they grew from, they morphed
into a realtime CMS for the emerging media. Twitter, not RSS, became
the early warning system for new content. Facebook, not RSS, became the
social Rolodex for events, casual introductions to RSS’ lifeblood, the
people behind the feeds. FriendFeed, not RSS, captured the
commentsphere. RSS got locked out of its own party.”

But the most worrisome part of the decline in RSS reacership is how it
helps Google. The search giant is in the business of organizing the
world’s content. And as the design of that content changes, Google can
easily shift its focus to deliver it to consumers. For smaller
companies like Blogines or Netvibes, a shift away from RSS is the end
of their existence.

As onilne information moves into new territory, companies like Microsoft and Google are making sure that they are still the entry point for consumers. Both companies have added real-time feeds to their search engines and are adding social features all the time.

But while the upsurge in Twitter usage has caused many people to declare Twitter the new RSS feed, that theory has not really proven itself. Twitter only succeeds as a news feed when people use it to share news.

And it takes a lot for that to happen. This fall there were already numbers showing that Twitter usage dropped two months in a row. Those numbers may not have included mobile app usage, but Twitter needs to continue growing at quite a strong clip to cement itself in the news sharing business among the general populace. 

RSS feeds are still used by news gatherers, and their technology fuels news sharing online. But the way that RSS is declining proves that when it comes to organizing the world’s information, small companies are going to have trouble competing.