Half-way through last year we’d spent nearly $10B on advertising, according to a study published by the Interactive Advertising Bureau, “Internet advertising revenues (“revenues”) in the United States totaled nearly $10 billion for the first six months of 2007.” This was a 26.4 percent jump from the same period the year before. The IAB report also projected that revenues would hit $20B for the full year.

A recent count shows that they went well past that. In a report released Monday, IDC indicated that spending totalled $25.5B, with a 28 percent jump in the fourth quarter alone.

Along with the increase in ads is a switch from pay-per-view to pay-per-results. According to Morgan Stanley, paid clicks were up 52% year-over-year in the start of 2007. Most of the US growth over the last few years has come from search engine advertising.

These new search engines have very high competition. But it’s good to have diversity and change. New things can sometimes be good.

~Katie

First, the $20B a year stat is an estimate from the Interactive Advertising Bureau, which is currently tracking a $5B a quarter spend. Details and some useful stats are available at http://www.iab.net/insights_research/iab_research.

Second, Gabe, I tend to agree with your assessment — my point wasn’t to celebrate the flurry of new entrants, or suggest they were ready to challenge Google, but rather to ask why they might be appearing. Many of them are betas that only change one part of the search equation.

And as iPhone man suggested above, the fight may already be over based on Google’s 60-plus data centers, homebrew networking switches, and massive distributed computing expertise. This alone may relegate the new search sites to simply being “visualizers” of Google — and others’ — data, which is a far easier thing to copy.

But if the new firms’ only lasting effect on the market is to nip at the heels of the giants, then at least they’re spurring innovation.

Vertical search sits nicely next to Google, you wouldn’t take a JCB digger to your local supermarket for your weekly food shop, so why use Google when you need to find something targeted and local? It’s a case of using the best tools for the job.

Research by Convera last year supports this thought by telling the story that most people struggle with general search engines:
• Only 11% always find what they are looking for on the first attempt.
• Only 43% always find what they are looking for after several attempts.
• 86% said VSEs (vertical search engines) would locate content more quickly.
• 85% believe VSEs would offer access to content not indexed by popular search engines.

The last point might not be true but that’s peoples perception for you. Vertical search isn’t the solution for everything but at least it’s helping people see the light between the trees.

Wouldn’t it actually just make sense to wait until Google gets better (which it does every day) than to wait for one of these completely far-fetched startups to get off the ground and start delivering anything close to the results I need or expect?

This is really insulting– I’ve tried all of these (the ones I could, that are out of beta testing) and talked to friends that have tried beta versions of the ones I couldn’t try out for myself– and they were all inaccurate at best and complete spam-city at worst. Are there really no better sites to promote? And if not, was there really no other topic to explore this week other than the beyond played-out “alternative search engines?”

Come on Alastair– you could have at least done 10 minutes of homework on these sites before practically endorsing them on GigaOm. I’ll give you the benefit of the doubt for one off night here, but really- we (your readers) deserve better.

There are unserved, under-served and undiscovered segments of the search market out there, to be sure.

Here is a recent blog on the people search, people pages, online persona aggregation space, for what it’s worth: http://thenetworkgarden.com/weblog/2007/12/spock-social-ne.html

Cheers,

Mark