SOURCE: eMarketer

April 19, 2007 09:00 ET

Google Fuels Online Ad Market

eMarketer Releases Search Report as Google Posts Earnings

NEW YORK, NY -- (MARKET WIRE) -- April 19, 2007 -- As Google releases its first-quarter 2007 earnings today, eMarketer offers a new search marketing report. Google, together with Yahoo!, will rake in over 90% of the US paid search ad spending. But Google, ever dominant, will pocket three-quarters of net US paid search revenues this year, according to eMarketer projections. Google's net revenue will reach $6.27 billion in 2007, while Yahoo! will make around $1.35 billion from search advertising.

Two reasons for Google's dominance are traffic and efficiency. More US Internet users search on Google than on any other site. And, Google monetizes user clicks better than most search engines, studies show.

"Paid search is currently the key driver of US online advertising as a whole," says David Hallerman, senior analyst and author of the report, "Search Marketing: Counting Dollars and Clicks." It makes up the largest slice of the US online ad market, as it has since 2003, contributing more than 40% to the total Internet ad spend.

Online display advertising, in which Google takes a huge stake with its acquisition of DoubleClick, will bring in $3.9 billion market in 2007. Growth of display advertising will be 20% this year.

The growth of search marketing overall is slowing, from over 30% in 2004 and 2005, to 18.9% in 2007. Mr. Hallerman puts the slower growth in perspective: "That paid search is barely growing obscures the enormous sums going to this advertising format," he says. "US spending on search advertising will rise by more than $3.2 billion from 2006 to 2008 alone."

For more information, to speak to Mr. Hallerman, or to receive a copy of the report, contact media contacts below.

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