Internet Ads Grow; Google Stumbles A Bit

IDC reports that Internet advertising revenue grew by 27%  in 2007 from the same period the previous year, totaling a whopping  $25.5 billion overall. One interesting tidbit in the report is that Google's net market share in the United States declined  0.5 percentage points, the first decline in two years for teh industry leader. You can parse out the likely market share that the merger of Microsoft and Yahoo would enjoy if the unsolicited buyout offer by Microsoft is accepted. It's big, but still just a respectable number two:

"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% based on our 4Q07 data," says Karsten Weide, program director for IDC's Digital Marketplace: Media and Entertainment service. "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."

Microsoft's offer of about twice the going share price for Yahoo stock makes sense in light of the numbers involved. Then again,so does Yahoo holding out for more.