Google the Biggest Loser as Internet Advertising Grows By 27% in 2007

It would appear that online advertising is getting more popular by the day. Online advertising grew 27% last year to $25.5 billion in 2007 according to analyst group IDC. However it wasn't all great news with Google having a decrease in its share of the US market for the first time in two years, dropping 0.5% to 23.7%.

IDC has said that online advertising is going to get even stronger as it is a sector unlikely to be affected even if the U.S. economy capsizes this year. IDC analyst Karsten Weide, believes businesses affected by the sluggish U.S. economy will cut other advertising budgets before cutting their online campaigns. "We think there will be some effect on ad spending overall, but we think online ad spending will almost be unaffected even if there's a depression," he said.

So just who are the big guns of the online advertising world? According to IDC, Google remained the big dog, snagging 23.7 percent of the market. Yahoo! came in a distant second with 11.4 percent, followed by Microsoft's 5.6 percent, AOL's 5.2 percent, Fox Interactive Media at 3 percent and InterActive Corp. (IAC) with 1.5 percent.

Weide even weighed into the Microsoft/ Yahoo! merger debate, stating that "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%. 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."

So as speculation mounts as to whether the merger between Microsoft and Yahoo! actually will go ahead, it will be interesting to see if Google's market share does continue to fall. Feel free to let us know what you think by leaving a comment.

Posted by Courtney Mills at 12:12 AM GMT