An Internet Life

Q4 ‘08 Revenues Total $6.1 Billion; Growth Continues Despite Difficult Economy

NEW YORK, NY (March 30, 2009) – Internet advertising revenues in the U.S. remain strong, topping $23 billion, according to the 2008 Internet Advertising Revenue Report, released today by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC). Despite a difficult U.S. economy, interactive advertising’s continued growth, albeit at a slower pace, confirms marketers’ increased recognition of the medium’s value in reaching consumers online where they are spending more and more of their time.

• Full-year 2008 revenues totaled a record $23.4 billion, exceeding 2007’s performance, itself the former record of $21.2 billion, by $2.2 billion or 10.6%. By comparison, a variety of sources indicate weakness in overall advertising spending. The Nielsen Company, for example, reported that U.S. advertising for the full year 2008 was down 2.6% compared to the full year 2007.
• Fourth-quarter revenues of $6.1 billion mark the first time the interactive advertising industry achieved, and surpassed, $6 billion in a single quarter. The figures represent a $154 million or 2.6% increase from 2007’s fourth quarter, which had revenues of $5.9 billion.
• This is the fifth consecutive year of record results.

“We are seeing an ongoing secular shift from traditional to online media as marketers recognize that ad dollars invested in interactive media are effective at influencing consumers and delivering measurable results,” said Randall Rothenberg, president and CEO of the IAB. “In this uncertain economy, where marketers know they need to do more with less, interactive advertising provides the tools for them to build deep, engaging relationships with consumers—the experience marketers gain from this will deliver dividends especially after the economy turns around.”

Search remains the main driver of revenue growth according to the report, showing a 19.8% increase over 2007. Digital video, though still a small overall contributor, more than doubled its revenue with an increase to $734 million from $324 million in 2007, demonstrating how both marketers and consumers are embracing this dynamic platform.

As in 2007, retail, financial services, computing and automotive remained the four largest verticals among Internet advertisers in 2008. Consumer packaged goods, an industry vertical historically slow to embrace interactive advertising, notably increased its share of total Internet ad revenues by 60 percent over 2007. The Internet is now the third largest ad-supported medium, marking its increasing significance to marketers and consumers.

“Though some categories in the fourth quarter slowed or even dipped, reflecting the current economic challenges, the overall performance is up, confirming interactive’s ever-growing importance to the successful marketing mix,” said David Silverman, Partner, Assurance, PricewaterhouseCoopers.

The following chart highlights full-year revenue data breakouts; dollar figures are rounded.

	FY 2008 Share of revenue $’s (000)	FY 2007 Share of revenue $’s (000)
Search	45% ($10,546)	42% ($8,805)
Display Related:	33% ($7,640)	33% ($7,072)
-Banner Ads	21% ($4,877)	21% ($4,456)
-Rich Media	7% ($1,642)	8% ($1,656)
-Digital Video	3% ($734)	2% ($324)
-Sponsorship	2% ($387)	3% ($636)
Classifieds	14% ($3,174)	16% ($3,321)
Referrals/Lead Generation	7% ($1,683)	7% ($1,584)
E-mail	2% ($405)	2% ($424)

Conducted by the New Media Group of PricewaterhouseCoopers LLP, the Internet Advertising Revenue Report was launched in 1996 by the IAB, and aggregates data from all companies that report meaningful online advertising revenues. The results are considered the most accurate measurement of interactive advertising revenues with the data compiled directly from information supplied by companies selling advertising on the Internet. The survey includes data concerning online advertising revenues from Web sites, commercial online services, ad networks, free e-mail providers, and all other companies selling online advertising. First and third quarter revenue reports are estimates, with the actual figures being released along with second and fourth quarter data respectively. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information.

A copy of the full report is available at: http://www.iab.net/AdRevenueReport

About PricewaterhouseCoopers:
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 154,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

About the IAB:
The Interactive Advertising Bureau (IAB) is comprised of more than 375 leading media and technology companies who are responsible for selling 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City with a Public Policy office in Washington, D.C. For more information, please visit www.iab.net.

IAB Media Contact:
Marla Aaron
212.380.4714
marla@iab.net

PricewaterhouseCoopers Media Contact:
Steven Silber
646.471.4059
steven.g.silber@us.pwc.com

Or

Linden Alschuler & Kaplan for PricewaterhouseCoopers:
Suzanne Dawson
212.329.1420
sdawson@lakpr.com

Today we’re rolling out two new improvements to Google search. The first offers an expanded list of useful related searches and the second is the addition of longer search result descriptions — both of which help guide users more effectively to the information they need.

More and better search refinements

Starting today, we’re deploying a new technology that can better understand associations and concepts related to your search, and one of its first applications lets us offer you even more useful related searches (the terms found at the bottom, and sometimes at the top, of the search results page).

For example, if you search for [principles of physics], our algorithms understand that “angular momentum,” “special relativity,” “big bang” and “quantum mechanic” are related terms that could help you find what you need. Here’s an example (click on the images in the post to view them larger):

Let’s look at a couple of examples in other languages. In Russian, for the query [гадание на картах] (fortune-telling with cards), the algorithms find the related terms “таро” (tarot), “ленорман” (lenormand) and “тибетское гадание мо” (tibetan divination mo). In Italian, if you search for [surf alle canarie] (surf at the canary islands), we now offer suggestions based on the three most famous Canary Islands: “lanzarote,” “gran canaria,” and “fuerteventura”:

We are now able to target more queries, more languages, and make our suggestions more relevant to what you actually need to know. Additionally, we’re now offering refinements for longer queries — something that’s usually a challenging task. You’ll be able to see our new related searches starting today in 37 languages all around the world.

And speaking of long queries, that leads us to our next improvement…

Longer snippets

When you do a search on Google, each result we give you starts with a dark blue title and is followed by a few lines of text (what we call a “snippet”), which together give you an idea of what each page is about. To give more context, the snippet shows how the words of your query appear on the page by highlighting them in bold.

When you enter a longer query, with more than three words, regular-length snippets may not give you enough information and context. In these situations, we now increase the number of lines in the snippet to provide more information and show more of the words you typed in the context of the page. Below are a couple of examples.

Suppose you were looking for information about Earth’s rotation around the sun, and specifically wanted to know about its tilt and distance from the sun. So you type all of that into Google: [earth's rotation axis tilt and distance from sun]. A normal-length snippet wouldn’t be able to show you the context for all of those words, but with longer snippets you can be sure that the first result covers all those topics. In addition, the extra line of snippets for the third result shows the word “sun” in context, suggesting that the page doesn’t talk about Earth’s distance from the sun:

Similarly, if you’re looking for a restaurant review that covers all the parts of the meal, longer snippets can help:

But don’t just take our word for it — try it out yourself with your favorite long, detailed query.

These are just two recent examples of improvements we’ve made. We are constantly looking for ways to get you to the web page you want as quickly as possible. Even if you don’t notice all of our changes, rest assured we’re hard at work making sure you have the highest quality search experience possible.

Posted by Ori Allon, Technical Lead, Search Quality Team, and Ken Wilder, Snippets Team Engineer

One of the things that we love best about Reader is the ability to easily share interesting items with your friends. In fact, we like it so much that we’ve been adding bunches of new sharing features over the last year including choosing friends to share with, sharing with note and the sharing bookmarklet. But we quickly realized that one of the most important pieces of the sharing cycle was missing: the ability to have conversations with friends about all those shared items.

With our new conversation feature, you can have private discussions on shared items with your friends. Now, instead of obsessively asking everyone in your office if they have seen that awesome lego cake article you shared last night, they can tell you how awesome you are, right within Google Reader!

What’s new with this feature:

• You can comment on any items that you share or that have been shared by your friends.
  
• In order to keep track of conversations, you can check out the new “Comment view” which is optimized for tracking conversations and commenting. Comment view is a little different from your normal reading mode because it sorts the list of items by most recent comment. When there are new comments, the “Comment view” link will appear as bold. You can even read the full text of the items in this view by clicking the “Expand this item” (which will mark it as read).
  
• If you see a comment icon on top of a friend’s profile picture in list or expanded view, it means there are comments on that item (this helps you decide what to read first.)
• When more than one of your friends share the same item, you’ll see a separate conversation under each person who shared it, together in the same view.
• And don’t forget, you can always read and add comments on your iPhone.

Some things to keep in mind:

• Comments can only be seen by friends of the person who originally shared the item.
• Comments are not yet available in the “All items” view.
• We have much more planned for this feature, but we would love to hear what you think, too.
• Currently, you cannot comment on items in a shared items subscription or on a shared tag; comments can only be made on items shared by friends.
• This release is English-only for now.

We are super excited to bring you this feature, and have plans to keep improving it in the near future. So, find some friends that use Reader, find some cool stuff to share, and join the conversation. Happy commenting!