Total U.S. Internet ad spending in the fourth quarter of 2007 grew nearly 28% over the same quarter in 2006 to $7.3 billion. For the full year 2007, online ad revenue grew 27% year-over-year to $25.5
billion, according to Framingham, Mass.-based IDC.
IDC research also found that Google's net U.S. market share declined for the first time in two years due to slower growth in
domestic fourth-quarter sales. The market leader's net U.S. Internet advertising market share was down 0.5 percentage points to 23.7% last quarter compared to third quarter 2007. Google's estimated
net U.S. Internet advertising sales (excluding the traffic acquisition costs they pay out to the partners in their networks) grew by a little more than 40% in fourth quarter 2007, but its year-on-year
growth rate in the quarter before had been 50%.
"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," said Karsten Weide, program director for IDC's Digital Marketplace: Media and Entertainment service. "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."
IDC's report, U.S New Media Quarterly Wrap-Up and Market Shares
4Q07, analyzes the net U.S. advertising sales of the most important new media companies. The study is based on a model that is populated with data from companies' quarterly and annual reports,
earnings calls, interviews with company representatives, and news coverage. To calculate the net U.S. Internet advertising sales market shares, the model looks at the quarterly Internet advertising
revenues of the top 15 U.S. new media operations, including AOL, CNET, DoubleClick, Facebook, Fox Interactive Media, Google, IAC, Microsoft OSB unit, and Yahoo.
--Tanya Irwin