As one might imagine, running a stock exchange is a fairly profitable business. Case in point: the London Stock Exchange (LSE), which earns over $100m a year in profit running one of the world's most recognizable equities markets.

Most of that profit is, of course, derived from the operations of markets and ancillary market services, such as the distribution of stock information. Yet if you go to the LSE website, you might notice that the exchange has no qualms about making a little bit extra on the side through display advertising.

That wouldn't be a problem, and it wouldn't be worth noting, if the ads the LSE served were simply ads. But apparently they're not always ads.

As reported by the BBC, some of the ads displayed on the LSE website recently have carried malicious payloads, one of which apparently infected a security researcher's computer with a trojan despite the fact that it had up-to-date antivirus definitions.

According to the BBC, this security researcher's experience may not be isolated:

Of the 1112 pages that Google scanned on the LSE site over the last 90 days, 363 were found to be hosting malware. The malicious code it found included scripting exploits and trojans.

The LSE says that ads served by a third party are to blame, and that the situation has since been rectified. But the fact that third party ads on such an important website were compromised begs the question: why do entities like the LSE even display advertising on their websites in the first place?

Sure, on paper, there's no such thing as a revenue stream not worth dipping one's toes in, but in reality, it's hard to imagine that banner ads -- particularly those served up by third party ad networks -- are really all that meaningful to the LSE's top line or bottom line.

At the very least, one might suggest that the LSE's advertising should be limited to ads delivered in-house for corporate partners and sponsors with whom the LSE has broader relationships.

This, of course, would have likely prevented the LSE from putting the integrity of its site in the hands of third party ad networks, which have been a target for hackers and scammers for some time now.

From this perspective, the decision of whether or not to run advertising should boil down to one thing: user experience.

A colleague of mine helps run a popular site in a lucrative niche. The site is very popular, and its primary source of revenue is paid content and events. No advertising is displayed.

I once asked, "Why don't you just throw up AdSense? You'll probably make $5,000 a month easy." His response: an extra $5,000 each month wouldn't compensate for the degradation of the user experience the ads cause.

Which highlights the question every company that doesn't rely on advertising should ask before deciding to add advertising to its website: is the revenue from advertising meaningful enough to justify altering the user experience to support them?

In the case of entities like the LSE, chances are that the answer is 'no', regardless of the risk of malicious ads.

Patricio Robles

Published 1 March, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2642 more posts from this author

You might be interested in

Comments (5)


David Joyce

I suspect that the revenue that the LSE web site generates is very significant and highly profitable. The directors of the LSE have an obligation to shareholders to maximise profits and they would be in breach of their obligation if they didn't do so. To say that it boils down to just user experience in naive and simplistic. The LSE provide a lot of free and very useful inofrmation on their site that they could not justify doing without the ad revenue. Keep it up I say.

over 7 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy


You can read the LSE Group's quarterly and annual reports. Revenue from online advertising is not broken out on its own, so I hardly doubt it's material.

Most ads run through third party networks (particularly the kind that frequently serve up malicious ads) do not carry premium CPMs, and I doubt very much they did here.

Finally, fiduciary duties do not require that a company's directors and officers do *everything* theoretically possible to maximize short-term profit. Yahoo, for instance, doesn't have to run, say, 50 ads per page, or ads for adult websites, simply because someone might argue that the company would make more money doing so.

over 7 years ago


William King

If you throw ads on your website in a way which does not disturbs the user while navigating or reading on the site, than I guess it is okay their is nothing wrong with the ads than and also they will not become the reason to divert your user. But, having so much ads on your homepage will surely disturb the user and this is the most worst thing that ads are full of mallwares and trojans. It is really very strange that LSE have posted such dangerous ads on their website. This does not make any sense to me.

over 7 years ago


David Joyce

It is a material revenue stream actually. LSE web site currently has a max of two ads per page - so reference to 50 ads per page nor relevant is it. If ad revenue didn't support the site then paid for content would have to be withdrawn and the value of the site to its users would be diminished.

over 7 years ago


Duncan Victor

I think a fundamental point here is the day of a free ride are well and truly over reference move to paid subscription for online news content as a developing trend.
Corporate websites are not the small cost side activity of past decades and now have significant cost to create and maintain. If you had a car park in central London that you did not need but cost you rent would you lease it to someone to subsides your costs or leave it empty?
In today’s climate if a service like a website does not maximise its opportunities to contribute to its operating cost then costs must be minimised through dramatic loss of functionality. Yes a commercial view but it boils down to if you want the tools then either you pay to use or allow the provider to generate revenue and in this case through advertising.

over 7 years ago

Save or Cancel

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Digital Pulse newsletter. You will receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.