Microsoft Set to Overtake Yahoo in Ad Revenues


Yahoo, whose CEO Marissa Mayer has been pressed by investors to define just what business the company is in, will decline in stature as a seller of digital ads. Though Yahoo will rebound from a 2.1% decline in 2013 ad revenue with a 2.7% increase this year, according to eMarketer, its share of the digital ad will decline three tenths of a point and drop it to number 4 behind Microsoft.

Microsoft’s estimated increase to a 2.54% share of desktop, laptop, tablet, and mobile phone ads will place is just slightly ahead of Yahoo at 2.52%. Google, though set to decline by nearly half a point, will continue to lord over the space with 31.45% share, followed by Facebook at 7.79%

In financial reports, Mayer pointed to an “unfavorable” shift in the mix of Yahoo’s display ad placements to the native variety, which aren’t as profitable as premium ads the company sells direct. Yahoo, nonetheless, remains a stalwart player in the business. Its stock price has risen 125% during the two years Mayer has been in charge, though its valuation has more to do with its 23% stake in Alibaba—the Chinese Amazon—than with regular business operations.

Facebook and Twitter will make the most dramatic moves in total digital ad share this year, according to eMarketer forecasts. Facebook looks to increase its share from 5.82% to 7.79%, and Twitter will ratchet up to 0.79% from 0.50 in 2013 after nearly doubling its net ad revenues. Numbers 5 and 6 on the list, IAC and AOL, both will post slight declines, allowing Twitter and Amazon to gain ground.

Amazon remains a marginal player in the mobile-only space, though it will triple its exposure to 0.3%, a position likely to remain on the upswing as its Fire Android phone takes root. Google dominates mobile, as well, with a 50.2% share, but Facebook looks to make a noticeable upward move in this business as well. The social network will finish the year with a 22.3% share, eMarketer estimates, up from 17.8% in 2013.

eMarketer estimates digital ad revenues at major publishers on a net basis, that is, after accounting for traffic acquisition costs and other potential sources of double-counting.

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