Facebook's Dominance Of US Online Market Grows

Most of the comScore commentary about its November review of the largest US websites and their traffic was devoted to the increase in activity at the large e-commerce destinations due to the start of holiday sales. Visits to the Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) sites was up over 20% for the month. Groupon did even better.

The real news from the data, however, was that Facebook is on its way to becoming the No.1 site in the US based on unique visitors. The top spot is now held by Yahoo! (NASDAQ: YHOO). It had 181 million unique visitors for the period. That was followed by Google (NASDAQ: GOOG) at 179 million, and Microsoft (NASDAQ: MSFT) sites which had 176 million.

Facebook’s number, which put it in the No.4 spot, was 152 million unique visitors. That figure has grown at a rate of more than 25% for the last two years. That would bring it into the top spot sometime in the middle of next year.

Raw numbers do not mean much in the rankings. Google gets most money from its pageviews from search. Yahoo! gets a great deal of its money from display ads.

The growth in Facebook’s popularity has begun to give it a great deal more power, however. It currently services over 25% of all the online display ads in the US. Facebook charges less for these ads than its major competitors, which has driven down rates at sites like Yahoo! at a time when they can least afford it.

Online advertisers are tapping in to the power of social networks. The millions of people on Facebook can recommend products and services to their friends.  That means Facebooks’s influence in the e-commerce market will grow even stronger.

Facebook becoming the top website may do more to being down the revenue of other large Internet media companies than years of competition among themselves and the recession ever did.

Douglas A. McIntyre