Google lost ground in the U.S. Internet advertising market for the first time in two years during 2007 due to slower growth in the fourth quarter, market researcher IDC said Monday.
The Internet search giant saw advertising sales growth slow to 40 percent year-on-year in the fourth quarter, down from 50 percent year-on-year in the third quarter, IDC said. That blip cut Google's advertising market share in the United States to 23.7 percent in the fourth quarter, down 0.5 percent from the third quarter.
The decline comes despite continued strong growth in Internet advertising in the United States, according to IDC.
U.S. Internet advertising grew 27 percent year-over-year in 2007 to $25.5 billion, while total U.S. Internet ad spending in the fourth quarter alone rose 28 percent compared to the same time in 2006, IDC said. Companies continue to shift ad spending to online media from traditional media, according to the market research company.
Google's fourth-quarter decline could spell opportunity for its rivals.
A merger between Microsoft's Internet businesses and Yahoo would give the combined company a market share of 17 percent in the U.S. Internet advertising market based on fourth-quarter data, IDC said in a statement. While the figure would leave Microsoft-Yahoo behind, "it would give them a much better fighting chance than if they went it alone," IDC said.
Google could not immediately be reached for comment on the IDC report.