Jan 18, 2011 13:46 GMT  ·  By
Facebook now accounts for five percent of online advertising spending in the US
   Facebook now accounts for five percent of online advertising spending in the US

It's no big secret that Facebook's revenue is growing, though certainly not as much as its valuation. Estimates say that the company made some $2 billion in 2010 and the latest analysis shows that it made about $1.86 billion from advertising alone. Of that, $1.21 billion came from the US alone, enough for Facebook to own five percent of the online advertising market in the country.

Numbers from an Ad Age report, citing data from eMarketer, indicate that Facebook is on its way of grabbing an even bigger slice of the online advertising pie.

What's more, it's doing it by catering to the small and medium size companies via its self-serve offerings, a strategy that helped Google become the giant it is today.

The estimates say that 60 percent of Facebook's ad revenue in 2010, or $1.21 billion, came from small companies, not the big brands. At the rate at which Facebook is growing, future years point at a duopoly in the self-serve market, Google and Facebook.

The report also offered estimates of future earnings for Facebook and the site looks set to take over a significant chunk of the ad spending in the US. It's estimated that Facebook will account for 7.7 percent of spending this year and 8.8 percent in 2012, reaching almost $3 billion in ad revenue in the US.

The big loser in all of this should be Google which is bound to see some market share loss or at least see slower growth in the coming years. That said, since the market as a whole is growing, Google's revenues should be on the rise regardless.

Nonetheless, Facebook is set to become a major force in online advertising and the fact that it's on track to become the largest website in the world and even sooner the one people spend the most time on should only help.