Facebook’s Advertising Revenue Totaled $2.2 Billion

Facebook (US) has yet again outflanked its rivals, Google and Yahoo, in terms of advertising and its revenue is expected to hit US$2.2 billion this year. It has displaced Yahoo in the battle for online display advertising dollars according to a research conducted by eMarketer, a research marketing firm.

The advertising revenue will give Facebook a 17.7% market share for online display ads that appear on websites.

This increase in share shows Facebook‘s clout in the market considering that it captured the spot of world’s No.1 social networking site. Its valuation has grown to almost US$80 billion in terms of recent transactions for its shares on the private markets. Some investors are anticipating it could have an initial public offering next year.

Facebook’s overall market performance also indicates that the online display advertising market is experiencing robust growth. More and more companies are benefiting from online display marketing in which both big international brands as well as small and local businesses are increasingly turning to the Internet to reach consumers. Some of the online display advertisements include banner ads, video ads and Web page sponsorships.

Last year Facebook had 12.2% share of the US market.

Facebook’s competitors, Yahoo, Google and Microsoft, are competing for those advertising budgets, while Groupon, a new online player offers marketers alternatives to traditional online display ads.

eMarketer’s study also said that Yahoo’s Web portal will grow its online display business in the US by 13.6% this year.

Google’s revenue from US display ads, according to the report, will total $1.15 billion in 2011, up 34.4%.

eMarketer’s report looks at companies’ net revenue, which does not include money the companies share with Web publisher partners.

The report also said that Google is stepping up efforts to grow its display advertising business. Last week the company acquired AdMeld, which makes it easier for Web publishers to sell display ads on their sites. Google generates the vast majority of its revenue from small, often text-only ads that appear alongside its search results,

eMarketer’s report also projected that Yahoo and Google will be neck-and-neck as the No.2 and No.3 players in the U.S. display market in 2012, with the companies having 12.5 percent share and 12.3 percent, respectively.