Google is Clear Winner As More Advertising Moves Online

Henry Blodget at Silcon Alley Insider writes that Google’s share of all U.S. advertising jumped from 10% to 14% in the past year. Total online advertising in the third quarter (Google, Yahoo, AOL and Microsoft) accounted for 28% of the total advertising dollars, up from 23% in the prior quarter. According to Blodget:

Online’s Big 4 grew U.S. advertising revenue by $1 billion in Q3, with Google itself accounting for $700 million of that. The rest of traditional media, meanwhile–TV, print, radio, outdoor–grew revenue by…$93 million, less than 1/10th as much.

Earlier this week, Credit Suisse analyst Heath Terry upped his target price for Google to $900 based upon long-term opportunities in emerging advertising markets. According to Terry:

As all advertising goes digital, including television, radio and outdoor, and Google becomes the de facto operating system for advertisers, providing them with the dashboard to monitor and optimize their advertising, tremendous value will be created for Google shareholders.

Not everyone is ready to concede the entire online advertising space to Google, however. Last week, Microsoft platform and services division President Kevin Johnson laid out the growth strategy for advertising, a plan called the “10, 20, 30, 40” plan. The first two numbers aim for growth in page views and time spent on Microsoft pages; the 30 represents Microsoft’s goal of raising its share of online searches to 30% while the 40 represents their goal to capture 40% of all online advertising dollars.

Those last two are fairly lofty goals, as Microsoft currently holds about 10% of the search market and only 6% of online ad dollars. This spurred another round of the periodic “Microsoft to buy Yahoo” rumors, as that would be the sole obvious path to the 30% figure.

Technorati Tags: (GOOG), advertising, Google, Microsoft, MSFT, online-advertising

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