Google Inc Tops Media Advertising Revenue In First Half

Google

Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) continues to be the dominant player in online advertising, raking in the most revenues among the 44 biggest publicly-listed companies in the first half of this year. In fact, the internet giant garnered more than one-third of the total value of online revenue generated by all 44 firms.

Google retains top spot

A report on online media revenues from Strategy Analytics published data on the 44 biggest publicly-listed company’s performance in the first-half of this year. Strategy Analytics’ prepared the Digital Media Index by gathering revenue data on companies dealing in advertising, video, music, games, social media and content delivery networks.

All the companies together brought in $85.9 billion in digital media revenues in the first half of 2014, which is an increase of 17% compared to the same period last year.

The search engine giant retained the topmost position, accounting for $31.4 billion in sales in the period, largely driven by its ad business. Amazon, the e-commerce retailer, took the second spot with $10.3 billion. Google was able to achieve 12% growth over last year compared to 9% for Amazon; however, the internet giant lags other firms in real numbers. Facebook’s $5.4 billion in online revenue for the first half of the year was up a whopping 66% from a year ago.

Chinese firms a threat to the U.S. dominance

Google is fighting strong competitive headwinds from Chinese internet companies, who are increasing their market presence.

Michael Goodman, Director, Digital Media for Strategy Analytics, said “A red-hot Chinese Internet market is challenging the historical dominance of US companies.” Qihoo, a Chinese internet security firm, saw its half-year revenue escalate by 123% to $582 million, slightly ahead of Twitter’s 122% growth and Facebook’s 66% growth. Other Chinese firms such as Baidu, Tencent and the online media company Sina have also increased their sales by 56%, 43% and 36% respectively.

Goodman noted that there are 2.5 times more Chinese than Americans online, which is one of the main factors helping Chinese companies attain such spectacular growth numbers. However, it remains to be seen if these companies are able to replicate the same story outside China. If they do, it will be a major threat to the U.S. companies including Google.

Yahoo could not maintain its online ad sales numbers and experienced a drop, making it the only company among the World’s 10 highest earners to see a decrease. Revenue for Yahoo dropped 3% to $2.2 billion for the half-year period.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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