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Internet Advertising Soars

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Internet advertising continues to gain ground — and share of advertisers budgets. Internet ad revenues hit $7.3 billion in the first quarter — a 23 percent increase from a year ago and the highest first-quarter revenue ever, according to the Interactive Advertising Bureau and Pricewaterhouse Coopers.

Bottom line: people are spending more time online and advertisers are going where the people are.

Last quarter's numbers are even more impressive when considered with the fact that 2010 was a record-breaking year for Internet ad revenue. It's a sure sign that this isn't a blip — Internet advertising is on a path of consistent growth.

Why the growth? Some of it comes from the wealth of new advertising options—like the check-in advertising Google announced today as part of its new 'Google Wallet'. It's also much easier for marketers to narrowly target their audience—by exact demographic and location down to the street corner you're standing on. Another benefit-- more precise measurement of the impact of ads.

And in this ever-growing Internet ad market, Google is king. Another company that tracks advertising spend, IDC, reported that Google overtook Yahoo! as the number one display ad company in the first quarter. Google's share of the display ad market grew to 14.7 percent, up about one and a half percentage points while Yahoo's share declined from 13.6 percent to just 12.3 percent. The growth of Google's Display Network puts pressure on Microsoft and AOL as well. But IDC warns that Facebook is a rising threat to both Google and other traditional publishers. Facebook's business is relatively small, but IDC points to its strong growth rate and the fact that brand advertisers — like Coca Cola are already on board. So Google may be king for now of both search and display ads — but it should be looking over its shoulder at Facebook.

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