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Facebook will pass Yahoo in ad sales

Bloomberg News / June 21, 2011

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Facebook Inc., the world’s most popular social-networking service, is set to overtake the Web portal Yahoo Inc. this year to seize the biggest share of the US online display-advertising market, a study found.

Facebook will reap $2.19 billion in display-ad sales this year, for a 17.7 percent share of the market, topping Yahoo’s 13.1 percent, according to EMarketer Inc.

Facebook has more than half a billion users. Its display ad revenue more than doubled in each of the past two years and will surge 81 percent in 2011, EMarketer estimated.

“Facebook’s supreme popularity — both in terms of numbers of people and amount of time they spend there — creates a plethora of display ad impressions, mainly for its unique form of banners,’’ David Hallerman, an EMarketer analyst, said in the report. “That popularity is also boosting what advertisers will pay.’’

Google Inc. is projected to increase its US display ad sales 34 percent this year and capture 9.3 percent of that market.

Google’s ad business is more lucrative than Facebook’s because the search engine leader can customize ads based on what users are seeking online, said Benjamin Edelman, an assistant professor at Harvard Business School.

“Google has by far the more valuable advertising franchise. . . . Google knows exactly what you’ve just searched for,’’ he said.