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Google’s advertising revenue is predicted to rise dramatically this year in the US, outstripping its nearest rival Yahoo by some distance. Google is expected to account for a quarter of US online ad revenue for the first time this year.

The search engine behemoth is projected to take home $4 billion of the expected $16 billion US online advertising market, according to predictions from eMarketer, an online marketing research company.

The figures show how Google is outstripping its closest rival Yahoo in the advertising market, despite Yahoo’s greater advertising diversity.

Last year, the two firms posted similar ad revenue figures, both around $2.4 billion, but this year Google’s revenue will be $4 billion, with Yahoo lagging behind on a mere $2.9 billion.

Yahoo’s growth rate of 17.5% would be more than respectable for most companies, but it is eclipsed somewhat by the staggering 65% achieved by Google in 2006.

eMarketer senior analyst David Hallerman gave some reasons for the success of Google’s ad service:

“Google’s markedly better than Yahoo and other rivals at squeezing more revenue for itself from the advertising it serves up. Also, Google’s reputation as the online ad leader makes it more of a first choice for businesses trying out online advertising for the first time.”

That $1.6 billion increase in advertising revenue is the same amount Google is paying for YouTube, although it is paying for the video sharing site in shares.

Graham Charlton

Published 18 October, 2006 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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