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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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February 11, 2008 1:45 PM

All the fuss is about this: U.S. online ad revenue up 27 percent to $25.5 billion

Posted by Benjamin J. Romano

Analysis firm IDC just reported that U.S. online ad revenue last year grew to $25.5 billion, up 27 percent from 2006.

That pot of money covers search, display and other forms of online ads, and it's projected to continue growing as advertisers follow people from old media to the Interne. That's why Microsoft is trying to buy Yahoo.

Their common rival Google has been the dominant player in this market, but, interestingly, Google's net U.S. market share "declined for the first time in two years due to slower growth in domestic fourth quarter sales," IDC found. It's a slight decline -- 0.5 percentage points -- to 23.7 percent in the fourth quarter. It still has more than twice the share of its two closest rivals individually.

IDC conveniently put the figures in context with the news of the day. Karsten Weide, program director for IDC's Digital Marketplace: Media and Entertainment service, said, in a statement:

"If a merger between Microsoft's new media business and Yahoo! would come to pass, the combined entity would have a net U.S. advertising market share of about 17% based on our 4Q07 data. It would not quite bring Microsoft-Yahoo! to where Google is in online advertising in the U. S., but it would give them a much better fighting chance than if they went it alone."

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