Amazon to Muscle into Online Search Market

Online advertising spending should total $42.5 billion in the U.S. this year. Of that, $19.49 billion will search1go to search. A new eMarketer report shows that Google remains the dominant player in the industry, but there are signs that competition is growing from some unlikely businesses.

Search is still a growing marketing format in terms of revenue with a projected spending level of $21.43 billion in 2014 and $23 billion in 2015. However, as a percentage of online ad spending, search is shrinking, amounting to only 46% of the pie last year. Meanwhile both mobile and digital video are  growing in terms of market share and dollars spent.

The major beneficiaries of marketer search spending include Google, with 73.8% of the market, Yahoo! (6.5%), IAC –About​.com. (4.8%), and Microsoft (4.6%).  Analysts had been expecting Microsoft to continue its fast growth in the search market but it seems that another business has come along to crowd them out. Amazon had 1.4% of the search market in 2011. By 2015, Amazon is expected to have 3.8% of all search spending. This level represents a 25.3% growth rate, compared to a predicted growth rate for IAC of 10.2% and Microsoft at 9.6%.

Of course, Google’s position is secure for a while, but it will be interesting to see how the competition chips away at the $14.39 billion in search ad revenue they are expected to generate this year.

[Sources: IAB Internet Advertising Revenue Report. Iab​.net. Apr. 2013. Web. 17 Jun. 2013;  Microsoft Takes a Small Share of US Search Ad Revenues. Emarketer​.com. 4 Jun. 2013. Web. 17 Jun. 2013] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.