Facebook Widens Its Lead in Display Ads

(Wall Street Journal) - MENLO PARK, Calif. -- Facebook Inc. is widening its lead in the online display advertising market ahead of an expected filing for an initial public offering.

The social network's share of the display ad market -- or banner advertisements on the internet -- grew to 27.9 percent for 2011, compared with 21 percent a year earlier, according to new data released Monday by research firm comScore Inc.

That puts Facebook far ahead of its closest competitor, Yahoo Inc., which had 11 percent of the display ad market, up only slightly from 10.9 percent in 2010. Trailing far behind are Microsoft Corp. and Google Inc., which both have less than five percent, according to comScore. Facebook first surpassed Yahoo in its share of display ads in 2009.

A Facebook spokesman declined to comment.

Facebook could file papers with the Securities and Exchange Commission for an IPO as early as Wednesday, people familiar with the matter have said. The company is looking to raise as much as $10 billion at a valuation of $75 billion to $100 billion, people familiar with the matter have said.

Facebook's revenue is fueled by its online advertising business so its share of the internet ad market is closely watched. Facebook Chief Operating Officer Sheryl Sandberg, who joined the social network in 2008, has spent her time building a business model for Facebook that includes convincing advertisers to develop social media strategies.

Brands can connect to consumers for free on Facebook through fan pages. Facebook needs to convince marketers that spending money to amplify their messages -- either through display ads or other ad products -- is necessary. Facebook marketing executives argue that the social network's ads are more effective than other online advertisements because they often come from a friend.

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