Wednesday, February 6, 2008

The Internet War Begins...



For the first time in four years, Google Inc. is feeling the heat of potential competition in the proposed combination of Microsoft Corp. and Yahoo! Inc.

Microsoft's $44.6 billion bid for Yahoo may slam another door in Google's so far unsuccessful attempt to expand beyond the four-line text advertisements that run alongside Internet search results. That's because Microsoft and Yahoo would control more than a quarter of the market for animated ads and colorful display banners at the top of Web pages.

Microsoft said it is pursuing Yahoo to challenge Google for online ad sales, a market that may double to $80 billion worldwide by 2011. In the U.S., search ads will account for 40 percent of online promotions, compared with 33 percent for display and media spots. Analysts predict display revenue will become at least as profitable as search ads and say it's growing faster.

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