Online advertising sales rise 27% to $10 billion

U.S. online advertising revenue surged to a new high of nearly $10 billion in the first half of the year, rising 27% from a year before, according to data released Thursday.

The figures from the Interactive Advertising Bureau and PricewaterhouseCoopers underscore how quickly spending by marketers is shifting to the Internet, often at the expense of traditional media such as newspapers or radio.

“The torrid growth of interactive advertising revenue persists,” bureau Chief Executive Randall Rothenberg said.

Second-quarter revenue rose 25% from a year earlier, the data showed, to a quarterly record of $5.1 billion.

One outgrowth of the boom is that media and technology companies are building up their online advertising businesses, partly through acquisitions.

Among recent deals, Google Inc. agreed to pay $3.1 billion for ad serving and tracking company DoubleClick and Microsoft Corp. bought online marketer AQuantive Inc. for $6 billion.

Jean-Philippe Courtois, head of Microsoft International, said this week that the online advertising market was growing 15% to 20% a year worldwide while the global advertising market was gaining only 2% to 3%.

At the same time, competition for those advertising dollars is growing, as firms including telephone companies and cable operators try to court marketers in an industry long dominated by television networks, newspapers and radio broadcasters.

For now, the majority of Internet spending is highly concentrated on the most popular sites.

The top 50 sites accounted for more than 90% of the revenue from online advertising spending in the first half of the year, and the top 10 sites accounted for 70%, according to the study.

Search ads, led by Google, remained the most popular form of online marketing and at $4.1 billion were 41% of the money spent in the first half of 2007.