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Google 'to outstrip' TV in ad revenues

02/11/2006

Internet search engine Google is set to overtake Britain's main commercial television channels in terms of profits from advertising revenue, according to new research.

A study completed by advertising buying companies Mindshare and Initiative has predicted that within 18 months Google's ad revenues are set to outstrip those of Britain's leading commercial TV channel, ITV1, the Financial Times newspaper reports.

Meanwhile, Channel 4 chief executive Andy Duncan warned yesterday that advertising revenues for the US internet search giant would dwarf those of his own station this year.

Mr Duncan said that Google was expected to make £900 million from advertising in the UK in 2006, ahead of the £800 million that Channel 4 is likely to make.

Google has not commented on the advertising revenue forecast, which is based upon a projection extrapolated from the company's first-half results, but the US company, which announced third-quarter profits of $733 million (£390 million) last month, has doubled its advertising revenues in each of the past two years.

As internet advertising takes up an ever-increasing share of total advertising revenues, while traditional broadcasters struggle to maintain their market share, Channel 4 chief Mr Duncan stressed that action was needed to "protect the fantastic legacy of UK broadcasting".

"People need to wake up and realise that this is not just a cyclical issue - there is deep structural change, rather like global warming," said the TV boss.

"If we want to protect the fantastic legacy of UK broadcasting, we need to wake up to this sooner rather than later," he added.

Predictions about Google's future advertising revenue do not include its recent acquisition of the popular video-sharing website YouTube, which could increase its share of the advertising market even further.

© Adfero Ltd