Growing Google Gap in Net Revs

©IDG Communications, Inc. Photo contributed by Matthew Mikaelian.

Digiday, 11/18/10

For future ease of reference, let’s call it the “Google gap.” Even with half of all online ad revenues in its coffers, Google still gained a substantial share of online ad dollars in the third quarter. That’s the conclusion of Internet financial analyst Stifel Nicolaus in reaction to third quarter online revenues reported by the Internet Advertising Bureau yesterday. Analyst Jordan Rohan concluded, “The net is that Google receives over $0.50 of every $1.00 spent on advertising online in the U.S., based on IAB total market estimates.”

Google U.S. ad revenue increased by around $700 million from the 2009 quarter to the one reported yesterday, also accounting for three-fourths of the gain in overall IAB revenue. So, while the news sounded good for the industry as a whole – year-over-year growth in online ad revenues accelerating to 17 percent in the quarter, up from 14% in the second quarter of this year, and revenues reached a record $6.4 billion, it’s a mixed bag, Stifel concluded, because of Google’s share.

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