Facebook Ad Revenue To Surpass Google, Yahoo In 2011: REPORT

By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Facebook's U.S. advertising revenue will total roughly $2.2 billion in 2011, displacing Yahoo Inc to collect the biggest slice of online display advertising dollars, according to a new study.

Facebook's U.S. advertising revenue will give it a 17.7 percent share of the market for graphical display ads that appear on websites, according to a report released on Monday by research firm eMarketer.

Last year Facebook had 12.2 percent share of the U.S. market.

The figures underscore the growing clout of Facebook, the world's No.1 Internet social network. It has seen its valuation soar to roughly $80 billion in recent transactions for its shares on the private markets and some investors anticipate it could have an initial public offering next year.

While Facebook has grabbed the top ranking, eMarketer analyst David Hallerman said the overall market for display ads, which include banner ads, video ads and Web page sponsorships, is growing robustly enough that it is benefiting numerous companies.

"It's not a zero sum game," said Hallerman, noting that the display advertising market is experiencing rapid growth as both big international brands and small, local businesses increasingly turn to the Web to reach consumers.

Internet companies such as Yahoo, Google Inc and Microsoft Corp are competing for those advertising budgets, while new players such as online coupon company Groupon are offering marketers alternatives to traditional online display ads.

Web portal Yahoo will grow its online display business in the U.S. by 13.6 percent this year, eMarketer said. But that will lag the overall U.S. display market's growth rate of 24.5 percent.

Google's revenue from U.S. display ads will total $1.15 billion in 2011, up 34.4 percent year-over-year.

eMarketer's report looks at companies' net revenue, which does not include money the companies share with Web publisher partners.

Google, which generates the vast majority of its revenue from small, often text-only ads that appear alongside its search results, is stepping up efforts to grow its display advertising business. Last week the company announced the acquisition of AdMeld, which makes it easier for Web publishers to sell display ads on their sites.

In 2012, eMarketer projected that Yahoo and Google will be neck-and-neck as the No.2 and No.3 players in the U.S. display market, with the companies having 12.5 percent share and 12.3 percent, respectively.

(Reporting by Alexei Oreskovic; Editing by Bernard Orr)

Copyright 2011 Thomson Reuters. Click for Restrictions

Comments

[Gwyneth Llewelyn]

06:19 PM on 07/03/2011

It seems to me that someone forgot to check Google's Ad revenues: http://investor.google.com/financial/tables.html

As @lonbwoy pointed out so clearly, display ads is just a marginal slice of the total ad revenue for Google, which is well into the US$28 billion mark and growing over 20% a year...

[max08]

08:15 PM on 06/20/2011

Since Facebook lost 6 million users in the US in May alone (2% of the total population) and lost 1.5 million Canadians (5% of the total population) in the same month, where are they advertising?

If appears to me that half of Facebook's users are people who run to the Internet cafe to catch up with their friends. Electricity in India is only in the big cities. Ditto Africa. Facebook is a third-world and emerging markets phenom.

[abhi035]

03:41 PM on 06/22/2011

max08... if you have followed "Facebook loosing users" report. it was found that tool was not reliable to know the correct no of Facebook users.

If you look at the below link - number of hits to Facebook are increasing continuously.

http://searchengineland.com/google-not-facebook-is-the-worlds-biggest-site-82740

[am44smith]

08:09 PM on 06/20/2011

Google gets revenue from other things besides ads.........

And besides, in six years Facebook will be the new Myspace

[Nwo2012]

06:48 AM on 06/21/2011

Indeed.

When the fall comes, it comes fast. 80 Billion is way overvaluing it.

[lonbwoy]

07:33 PM on 06/20/2011

I like how the article says display ads but doesn't say that is just a small portion of google revenue but all of facebooks.
Google is not worried at all, it makes over $30billion a yr from ads while fb is still at $2billion, it wont catch google any time soon!!.

[max08]

08:16 PM on 06/20/2011

Yeah, but Zuck is trying to get his numbers up so he can dump it into an IPO. ;-)