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Facebook's Latest Conquest is Quite a Display

Posted on 6.20.2011

Yahoo, of course, is used to this kind of thing by now. For Google, it’s simply time to reload and fight harder.

Facebook is now projected to pass both companies in 2011 U.S. online display advertising revenues with an estimated $2.19 billion. Previous leader Yahoo is forecast to bring in $1.62 billion, followed by Google.

Which of the two is feeling more threatened by the news is a matter of debate, as display has been Yahoo’s bread and butter while it continues an attempted reorganization. Display has been a relatively recent priority for longtime search giant Google, but the projected $1.15 billion earnings in 2011 represent a 10-percent decline from earlier estimates.

Plus, the Facebook Surpasses Google thing is getting really old over at the Googleplex.

Because online display advertising is growing faster than search, Google has made significant moves there to help secure its position of overall Web dominance – a title that Facebook has made no bones about wanting to claim as its own. Yahoo, meanwhile, appears headed in the opposite direction, but if the estimates are correct it will lose its hold on display.

Then there is AOL, another once-dominant force that recently made its mark on the display industry with the successful introduction of much larger ad units under the name Project Devil.

Google has increased its display portfolio by offering numerous new options through YouTube and recently purchased ad startup Admeld for $390 million. Neither of the three companies now looking up at Facebook are averse to big-ticket purchases such as that one, but Google has the most cash on hand and is the most likely to start one of its prolific buying sprees if it thinks it will help.

Perhaps most frightening about Facebook for any company trying to compete in display revenues is that the social network’s advertising platform is just beginning to hit its stride. More than 20 third-party companies such as Blinq, Kenshoo and Adparlor sell Facebook advertising to agencies and Web marketers, and with nearly 700 million users the appeal for big brands is clear.

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