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Tuesday, July 27, 2010
Microsoft and Baidu Gain Share on Google

Recent earning results of major online search companies confirms continued growth of the global online advertising economy.

According to Strategy Analytics research, the global online search ad market hit $6.2 billion in the second quarter of 2010, up 2.7% from the previous quarter. Market leader Google saw its core search revenue grow slightly, benefitting from higher cost per click. However, Google global revenue market share slipped by 1.4 percentage points compared to the previous quarter.

In contrast, the Chinese search market leader Baidu has capitalized on Google's retreat from China and the overall rapid growth of the Chinese search market. Baidu's revenue surged 76% over the second quarter last year and by 49% over Q1 2010. As a result its global search revenue market share grew by 1.4 percentage points in Q2 2010. In terms of revenue, Baidu is now the forth largest search company in the world, with its sight set on Yahoo and Microsoft.

"Google's search revenue growth continues to slow down as the Western search market reaches maturity and Google struggles to gain share in the fastest growing Asian markets," said Martin Olausson, Director of Digital Media Research at Strategy Analytics. "As a company, it will become increasingly more important for Google to find significant new revenue streams in order to offset the decelerating search growth."

"Google's dispute with the Chinese government, and subsequent withdrawal from the Chinese market, has given Baidu the advantage of unrivalled growth in the world's largest Internet market," added Jia Wu, Analyst at Strategy Analytics Digital Consumer Practice. "As a result, Baidu's global revenue market share has grown to 4.6% from 3.3% in a single quarter. This growth is expected to continue for the rest of the year."

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