Online Advertising Continue to Consolidate. Google the Big Winner.

Experiences：
Ph.D. in EE, Stanford University
Associate Professor, National Taiwan University of Science & Technology
Founder, allproducts.com

According to the analysis of web marketing firm Allproducts.com, the market size of online advertising has reached 24.5 billion US dollars ended Q2, 2007. Compared to previous year, the annual growth rate is 45%. It is estimated that the total market size will reach 30 billion US dollars in 2007.

In the past year, Google’s advertising revenue reaches 13.3 billion US dollars. The worldwide market share increases to 54.3%. Net income is 3.69 billion USD. Compared to the same period of previous year, the revenue increases 63.7% and the net income increases 78.7%. Since YouTube has not contributed much revenue yet in the above period and GPhone is expected to create a new horizon, Google will continue to be the winner for year to come.

After excluding the fee revenues, Yahoo performed second with revenue of 5.63 billion. The annual growth rate is 22.5%. The market share is 23%. Corporate net income is 0.73 billion, a decline of 42.1% compared to previous year. Overall, the gap with Google is widening.

AOL, after excluding the subscription and other revenues, performed third with revenue of 2.12 billion. The worldwide market share is about 8.6%. Compared to previous year, the revenue increases 36.7%. But the advertising revenue has declined for two consecutive quarters.

MSN follows AOL closely with revenue of 1.84 billion. The worldwise market share is 7.5%. Compared to previous year, the revenue increases 21%. But the operation loss increased. The growth rate also trails behind the leaders.

By means of acquisitions, the online advertising market continues to consolidate. The top four performers grab about 90% of the market. This has not happened in other media.