• Silicon Alley Insider, Thursday, August 16, 2007 11 AM

In the second quarter, the Web's big four, Google, Yahoo, AOL and MSN-eMarketer expects to make up more than two-thirds of online advertising in 2007, which saw a collective ad revenue increase of $1.3 billion or 42 percent in the second quarter of this year. Meanwhile, ad revenue at the 15 biggest traditional media companies shrank 3 percent over the same time period, a loss of $280 million.

The result: among the 19 companies, online's share of the total pie grew from $3 billion to $4.2 billion, or from 23 to 30 percent, while the traditional companies saw a drop from $9.9 to $9.6 billion, or from 77 to 70 percent. Online gained 7 percentage points of market share in a single year.

Among the traditional company set, outdoor advertising was the only sector to report a gain, up 13 percent. TV fell one percent, print fell five percent, and radio fell a hefty 7 percent. To appease shareholders, traditional companies will blame the current economic climate for the losses--but the same factors (i.e. the real estate downtown) affect Google and MSN. Unfortunately for traditional media, this trend's here to stay. Witness the towering collective market capitalization of the Web media firms, compared to their traditional cousins; advertising's future really is online.

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