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Google’s Share of Search Ad Revenues Rises, Unaffected by Bing

Microsoft’s Search Revenues Expected to Pass Yahoo! This Year

NEW YORK, NY (June 20, 2011)—Google is expected to extend its lead over Microsoft and Yahoo! this year, seemingly unaffected by the rapid growth of Bing, according to a new forecast by eMarketer.

eMarketer estimates net US search advertising revenue at Google will grow 38.9% to $10.92 billion in 2011. That will help push Google’s share of overall US search revenues to 75.9% this year, up from a 73.6% share in 2010 and a 69.8% share in 2009.

Microsoft’s share of overall US search ad revenues is expected to grow to 8% this year, when the company will bring in an estimated $1.15 billion in net US search ad revenues, up 38.9% from $828 million and a 6.9% share of the total market in 2010.

“The rise of social networks, notably Facebook, is not taking money away from search advertising,” said eMarketer principal analyst David Hallerman. “Marketers—especially those focused on direct response and high measurability—still see tremendous value in the search market. Brand marketers, too, increasingly understand how search can support other elements of their campaigns, even offline.”

Search is a heavily consolidated market, and progressively more so, with just four companies accounting for 93.6% of the ad revenues this year, and over 95% next year, eMarketer estimates.

“Search has become a duopoly dominated by Google, with Microsoft’s Bing and Bing-powered engines (Yahoo!) in a strong but distant second position,” said Hallerman.

For the first time, Microsoft’s search ad revenues will surpass those of Yahoo!, eMarketer estimates. Net US search ad revenues at Yahoo! are expected to dip to $1.14 billion—or a 7.9% share of the overall US search advertising market—in 2011, down from $1.28 million and a 10.7% share in 2010.

“Microsoft’s deal with Yahoo! has not yet helped the latter company,” said Hallerman. “In contrast, Google has benefited from the delayed fruition of the Yahoo!-Microsoft search alliance, steadily gaining market share as the alliance’s combined share has remained relatively flat.”

Search at Microsoft is growing faster than at Google, however, which Hallerman attributes to “the overall efficiency of the Bing search engine in delivering relevant results to searchers, and the company’s marketing of Bing to encourage more usage.”

However, Google’s lesser growth represents more than $2 billion in new search ad revenues this year, compared to only an estimated $322 million increase for Microsoft.

AOL’s share of overall US search ad revenues, meanwhile, is expected to decrease to 1.7% this year, down from 2.4% in 2010.

eMarketer forms its forecast though a meta-analysis of reported revenues from major ad-selling companies, results from its benchmark source—the IAB/PwC—and research estimates and methodologies from dozens of firms that track ad spending.

About eMarketer
eMarketer is the authority on digital marketing, media and commerce, offering insights essential to navigating the changing, competitive and complex digital environment. By weighing and analyzing information from different sources, eMarketer provides businesspeople, marketers and advertisers with the most complete view of digital marketing available.

Media Contact:
Clark Fredricksen
Vice President, Communications, eMarketer
Tel. 212-763-6056

Posted on June 20, 2011.