Google's U.S. ad share drops for first time in two years

Google lost ground in the U.S. Internet advertising market for the first time in two years during 2007 due to slower growth in the fourth quarter, market researcher IDC said Monday.

The Internet search giant saw advertising sales growth slow to 40% year-on-year in the fourth quarter, down from 50% year-on-year in the third quarter, IDC said. That blip cut Google's advertising market share in the U.S. to 23.7% in the fourth quarter, down 0.5 percentage points from the third quarter.

The decline comes despite continued strong growth in Internet advertising in the U.S., according to IDC.

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Google lost ground in the U.S. Internet advertising market for the first time in two years during 2007 due to slower growth in the fourth quarter, market researcher IDC said Monday.

The Internet search giant saw advertising sales growth slow to 40% year-on-year in the fourth quarter, down from 50% year-on-year in the third quarter, IDC said. That blip cut Google's advertising market share in the U.S. to 23.7% in the fourth quarter, down 0.5 percentage points from the third quarter.

The decline comes despite continued strong growth in Internet advertising in the U.S., according to IDC.

U.S. Internet advertising few 27% year-over-year in 2007 to $25.5 billion, while total U.S. Internet ad spending in the fourth quarter alone rose 28% compared to the same time in 2006, IDC said. Companies continue to shift ad spending to online media from traditional media, according to the market research company.

Google's fourth quarter decline could spell opportunity for its rivals.

A merger between Microsoft's Internet businesses and Yahoo would give the combined company a market share of 17% in the U.S. Internet advertising market based on fourth quarter data, IDC said in a statement. While the figure would leave Microsoft-Yahoo behind, "it would give them a much better fighting chance than if they went it alone," IDC said.

Google could not immediately be reached for comment on the IDC report.

The IDG News Service is a Network World affiliate.