Google Overtakes Yahoo in Display Advertising

Google, which long ago passed Yahoo in search advertising, now has overtaken the company in display ads as well, according to IDC.

Google claimed the number-one spot in U.S. display advertising in the first quarter, with 14.7% of the market ($396 million), up from 13.3% in Q4 2010. Yahoo’s hold on the market declined from 13.6% to 12.3%, or $330 million, in that same period.

Facebook, meanwhile, had 8.8% of the display market, or $238 million. Karsten Weide, IDC vice president and the author of the report, says he expects Facebook‘s share to overtake Yahoo’s in the third or fourth quarter.

Weide says the latest numbers reflect Google’s strength rather than Yahoo’s weakness. “They have a huge search network,” Weide says, “And anything you offer based on that is likely to work well.”

Google got into the display ad arena in earnest in September 2009, after its acquisition of DoubleClick. Since then, the business has grown rapidly and is now estimated to be worth $2.5 billion a year, including YouTube.

Other findings of the IDC report:

• Global online ad spending grew 14.3% to $18.2 billion in the first quarter.
• U.S. spending was up 14.2% to $8.1 billion.
• For the ninth quarter in a row, display is growing faster than search advertising. Display’s share is now at 33.3% vs. 29% two years ago.
• Google’s share of search advertising rose to 59.6% (vs. 59.1% in Q4 2010). Microsoft’s share was 7.9%. Yahoo’s was 7%.

Just like the IAB’s first-quarter online advertising estimates, released on Thursday, IDC’s reports shows quarterly ad revenues at a new record.