Online advertising revenues among the four largest Web advertising companies (Google, Yahoo, Microsoft, and AOL) ramped up 10.2 percent in the fourth quarter to $9 billion. This marks the second quarter of positive growth following last year’s advertising recession, and growth accelerated from 1.2 percent in the third quarter.
Unlike in the third quarter, Google didn’t account for all the growth. All four companies showed decent sequential increases, indicating that display advertising is beginning to regain its health, and not just search advertising. But search is still driving the gains. Google had another blowout quarter, for instance. And Microsoft showed some strength compared to the previous quarter, perhaps due to Bing search advertising revenues starting to kick in. On a sequential basis, Microsoft’s advertising revenues grew the fastest at 18.6 percent. But the other three weren’t exactly slouching, with growth rates between 11.5 percent and 13.7 percent each
I keep track of these numbers every quarter for these four companies, which turns out to be a good proxy for overall online advertising revenues since they represent a majority of the industry’s revenues. The numbers represent global advertising revenues, and include network revenues paid to affiliates through AdSense and Yahoo’s ad network. Google’s licensing revenues for Google Enterprise Apps have been stripped out. For Microsoft and AOL, I include only the advertising portions of their online revenues as reported in their quarterly earnings statements.
Below is a table with all the numbers:
Online Advertising Revenues (in millions)
| 4Q08 | 1Q09 | 2Q09 | 3Q09 | 4Q09 | |
| $5,504 | $5,331 | $5,336 | $5,757 | $6,465 | |
| Yahoo | $1,594 | $1,383 | $1,378 | $1,377 | $1,535 |
| Microsoft | $610 | $520 | $540 | $490 | $581 |
| AOL | $507 | $443 | $419 | $415 | $472 |
| Total | $8,215 | $7,677 | $7,673 | $8,039 | 9,053 |
| Sequential Growth Q/Q | 3.44% | -6.55% | -0.05% | 4.77% | 12.60% |
| Annual Growth Y/Y | 4.94% | -4.63% | -5.76% | 1.22% | 10.20% |
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps and YouTube. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing them with a rich source of information....
Microsoft, founded in 1975 by Bill Gates and Paul Allen, is a veteran software company, best known for its Microsoft Windows operating system and the Microsoft Office suite of productivity software. Starting in 1980 Microsoft formed a partnership with IBM allowing Microsoft to sell its software package with the computers IBM manufactured. Microsoft is widely used by professionals worldwide and largely dominates the American corporate market. Additionally, the company has ventured into hardware with consumer products such as the Zune and...
Yahoo was founded in 1994 by Stanford Ph.D. students David Filo and Jerry Yang. It has since evolved into a major internet brand with search, content verticals, and other web services. Yahoo! Inc. (Yahoo!), incorporated in 1995, is a global Internet brand. To users, the Company provides owned and operated online properties and services (Yahoo! Properties, Offerings, or Owned and Operated sites). Yahoo! also extends its marketing platform and access to Internet users beyond Yahoo! Properties through its distribution network...
AOL is a global advertising-supported Web company, with display advertising network in the U.S., a substantial worldwide audience, and a suite of popular Web brands and products. The company’s strategy focuses on increasing the scale and sophistication of its advertising platform and growing the size and engagement of its global online audience through leading products and programming. On March 13, 2008, AOL Internet division announced their plans to buy social network Bebo for $850 million in cash. History of Aol: AOL was...
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