DAILY CHALLENGE WEDNESDAY, JUNE 22, 2011
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Facebook to take top spot in U.S. display ad market By ALEXEI ORESKOVIC SAN FRANCISCO — Facebook’s U.S. advertising revenue will total roughly $2.2 billion in 2011, displacing Yahoo Inc. to collect the biggest slice of online display advertising dollars, according to a new study. Facebook’s U.S. advertising revenue will give it a 17.7 percent share of the market for graphical display ads that appear on websites, according to a report released on Monday by research firm eMarketer. Last year Facebook had 12.2 percent share of the U.S. market. The figures underscore the growing clout of Facebook, the world’s No.1 Internet social network. It has seen its valuation soar to
roughly $80 billion in recent transactions for its shares on the private markets and some investors anticipate it could have an initial public offering next year. While Facebook has grabbed the top ranking, eMarketer analyst David Hallerman said the overall market for display ads, which include banner ads, video ads and Web page sponsorships, is growing robustly enough that it is benefiting numerous companies. “It’s not a zero sum game,” said Hallerman, noting that the display advertising market is experiencing rapid growth as both big international brands and small, local businesses increasingly turn to the Web to reach consumers. Internet companies such as Yahoo, Google Inc and Microsoft Corp
are competing for those advertising budgets, while new players such as online coupon company Groupon are offering marketers alternatives to traditional online display ads. Web portal Yahoo will grow its online display business in the U.S. by 13.6 percent this year, eMarketer said. But that will lag the overall U.S. display market’s growth rate of 24.5 percent. Google’s revenue from U.S. display ads will total $1.15 billion in 2011, up 34.4 percent year-over-year. eMarketer’s report looks at companies’ net revenue, which does not include money the companies share with Web publisher partners. Google, which generates the vast majority of its revenue from small, often text-only ads that
appear alongside its search results, is stepping up efforts to grow its display advertising business. Last week the company announced the acquisition of
AdMeld, which makes it easier for Web publishers to sell display ads on their sites. In 2012, eMarketer projected that Yahoo and Google will be
Home sales hit 6-month low, prices decline By LUCIA MUTIKANI WASHINGTON — Sales of previously owned U.S. homes fell to a six-month low in May and prices dropped 4.6 percent from a year ago, pointing to a housing market still struggling to regain its footing. The National Association of Realtors said yesterday sales slipped 3.8 percent month over month to an annual rate of 4.81 million units, the lowest since November. It was the second straight month of
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declines in home resales, but less than the 5.9 percent drop to a 4.80 million-unit pace that economists had expected. While the fall in sales last month — which was telegraphed by a steep fall in pending home sales contracts in April — was partly due to bad weather in some parts of the country, including tornadoes, it underscored the fundamental weakness in the sector. The report was also the latest set of data to confirm a sustained weakness in the economy through the second quarter, which has been marked by a sharp slowdown in regional factory activity, soft retail sales and anemic employment growth. “This one report does not change our long-term view in that we still believe the housing market will remain a drag on overall economic activity in 2011 and likely into 2012,” said Tom Porcelli, chief economist at RBC Capital Markets in New York.
But the smallerthan-expected decline in sales was yet another indication that the economy was set to regain momentum in the second half of the year. U.S. stock indexes extended gains on the data, while government debt prices eased. The dollar was little changed. The report came as policymakers at the Federal Reserve started a two-day meeting. Officials are expected to acknowledge the recent slowdown in economic activity, but they are likely to stick to their view that the
soft patch is transitory. The U.S. central bank is expected to confirm its $600 billion government bondbuying program will finish at the end of the month, as scheduled. The Fed, which has been criticized for risking inflation, has set the bar very high for any more monetary stimulus. In the 12 months to May, home resales were down 15.3 percent. The general weak housing market tone was underscored by the median home price, which at $166,500 was 4.6 percent lower than
a year earlier. The housing market is being squeezed by an overhang of unsold homes and a tide of foreclosures, which are depressing prices. NAR chief economist Lawrence Yun said he believed sales had bottomed and expected pending contracts for May to rise by at least 15 percent. The pending homes sales report is due next week. Foreclosures and short sales — which typically occur at about 20 percent below market value — accounted for 31 percent of transactions
Best Buy ups dividend, sets $5 billion share buyback By DHANYA SKARIACHAN Best Buy Co.’s board raised its quarterly dividend by 7 percent to 16 cents a share and approved a plan to buy
back $5 billion of common stock, sending its shares up about 4 percent. The increase in the dividend takes effect with the October 25 payout to shareholders of record October 4, the
world’s largest consumer electronics chain said in a statement yesterday. Sales at Best Buy stores open at least 14 months have fallen consistently in the past four quarters, but some
neck-and-neck as the No.2 and No.3 players in the U.S. display market, with the companies having 12.5 percent share and 12.3 percent, respectively. last month, down from 37 percent in April. Cash purchases made up 30 percent of sales in May, while investors accounted for 19 percent of transactions. Sales last month fell across the board, with multifamily dwellings declining 8.1 percent and single-family home units slipping 3.2 percent. At May’s weak sales pace, the supply of previously owned homes on the market rose to 9.3 months’ worth from 9.0 months in April. A supply of between six and seven months is generally considered ideal, with higher readings pointing to lower house prices. investors still prefer the company for its steady cashflow and its ability to stay profitable and pay dividends. Best Buy’s new $5 billion share repurchase program replaces the retailer’s prior $5.5 billion buyback plan, which had about $800 million of remaining authorization as of the first quarter ended May 28, the company said ahead of a meeting with shareholders.