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Yahoo Slips Behind Google, Facebook and Even Microsoft In Online Ad Share

Google Continues to Corner the Market With 40% Share

By Published on . 1

Yahoo's stocking may feel a bit light this Christmas, particularly compared to Google, Facebook and even Microsoft.

Having long been the country's second-largest ad seller, Yahoo will cede share of net U.S. digital ad revenues to Facebook and Microsoft this year and fall to fourth, according to the latest estimates from eMarketer.

Yahoo will take home 5.8% of the $42.6 billion to be spent on U.S. digital advertising this year, the research firm forecasted on Thursday. By comparison Facebook and Microsoft will bank 7.4% and 5.9%, respectively. Google retains the lion's share of net U.S. digital ad revenues at 39.9% of the pie.

Yahoo has been negatively impacted by "the rapid growth of Facebook which is coming at the expense of competitors" and is fueled by the social network's rocketing mobile ad business, said eMarketer VP-communications Clark Fredricksen.

In August eMarketer had projected Yahoo would close the year with a 7.7% share of net U.S. digital ad revenues and secure the number-two spot behind Google. Mr. Fredricksen said the eMarketer revised its forecast for Yahoo because the portal has yet to show significant growth despite investments in its display ad business and consumer products.

"Largely the change for Yahoo comes from a bigger overall pie and faster growing competitors combined with the lukewarm results issued in the past two quarters," he said.

Yahoo's share has seesawed not only with competitors like Google and Facebook but also partner Microsoft. EMarketer has adjusted how it appraises Microsoft in light of new data related to their share of net revenue from the search alliance with Yahoo as well as traffic acquisition costs, Mr. Fredricksen said. Interestingly Microsoft felt the need last week to publicly recommit to its digital advertising business.

Yahoo recently admitted that the search agreement with Microsoft contributed 30 percent of Yahoo's overall revenue through the first nine months of 2013.

Yahoo's 2013 worldwide digital ad revenue prospects are a bit rosier. The company's 2.87% share will still trail Google's 31.9% take and Facebook's 5.64% split, but is poised to edge out Microsoft's 2.87% cut.

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