Facebook Now Uses Up 16% of Time Americans are Online, Pasing Google’s 11%

While Groupon and Zynga failed to strike while the iron was hot for their 2011 IPOs, everyone waits on the big one – Facebook (coming to a theater near you in 2012).  While I’m not a user, apparently there were some major changes to the site in the past week, and change always causes a ruckus.  WSJ’s Marketbeat blog has some interesting notes from Citi’s Mark Mahoney on the monster that is Facebook – it now sucks up 16% of all time on the internet by Americans, passing Google’s 11% and Yahoo’s 9%.  More important in that note is potential implications for advertising as Mahoney believes more search will move to the Facebook platform – and hence away from the other two.

As people spend more time on Social Media sites, it would be logical to assume that they would do more Search activity on these sites. Use of portal sites and direct entry (to Websites) appear to have declined as a means to Search for content. Today, most of the Searches done on Facebook are “people” searches, but as Facebook increasingly socializes content and commerce, we would expect people to find rich Search results influenced by social signals from their friends.

Social networks predominantly earn revenue via Online Display advertising and a majority of the ad spend comes from self service (i.e. advertisers posting ads directly themselves). Inventory remains relatively inexpensive; engagement time is high, and therefore inventory levels are significant. This is reflected in the growth in share of Ad impressions in the US over a year from little over 20% at the end of 2009 to 34% at the end of 2010. More specifically, per comScore, Facebook was number 1 based on Ad impressions in 2010, and delivered almost double the number of Ad impressions as the next closest player.

About Mark Hanna 543 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

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