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Kate Kaye at Clickz has done some in-depth analysis of the online ad spending of Democrat Presidential Candidate Barack Obama. The Illinois Senator has spent $3.47 million this year in online advertising.

Of that, $2.8 million went to Google while Yahoo received $180,000. Smaller amounts also went to Facebook, CNN.com, Gothamist, and Politico.

Google, of course, dominates the online advertising market, so it’s a smart play by anyone to spend with them. But Google just happens to be number 13 on OpenSecrets.org list of top donors. The list compiles monies donated by corporate political action committees and individuals (who must report who they work for when contributing).

Related Reading:
Presidential Candidates Need Some Help with their Reputations
Clinton, McCain, Obama: Drilling Down on Local in Campaign ‘08

On yesterday’s earnings call, Chris Liddell, Senior VP and CFO, affirmed recent statements by Steve Ballmer to focus on the online advertising market. He said that the strategy was based on three pillars:

• To drive innovation and search
• To increase value to advertisers and publishers
• To grow user engagement across MSN and Windows Live properties

Liddell said that Yahoo would accelerate that strategy. But later, he made this statement:

We’ve yet to see tangible evidence that our bid substantially undervalues the company. In fact we see the opposite.

Yahoo continues to lose search share and profitability continues to decline year-on-year. The results that they announced on Tuesday were in line with the guidance that they gave on their last earnings call on January 29, after which their stock price closes at $19.05 and Wall Street analysts’ consensus on value was significantly decreased.

Just how is Microsoft expected to accomplish their three pillars if Yahoo is as awful as they say?

Perhaps Liddell and Ballmer are beginning to ponder that exact question. Earlier this week, Ballmer suggested that Microsoft would go forward without a merger. During yesterday’s call, Liddell suggested that an alternative to Yahoo’s “no” is to withdraw the proposal.

Meanwhile, Yahoo remained consistent in what they’ve been saying all along – that they’re worth more than Microsoft’s original offer. Speaking on Yahoo’s earnings call on Tuesday, CEO Jerry Yang reinforced his confidence in the overall value of his company:

Yahoo! has a unique and valuable combination of assets that include our global brand, our large worldwide audience, our leadership in online advertising, our strategic positions in Asia, our mobile and emerging market franchises, and our scales, tools, and technology.

Yang stated that Yahoo’s Q1 revenues were particularly remarkable in the light of uncertainty caused by Microsoft’s unsolicited offer. He also said that Yahoo remains open to its options, including a deal with Microsoft.

Then Yang zeroed in on what he felt was his most important statement on the matter:

If you take only one thing away from this brief discussion, I hope it will be that our board and management are committed to choosing a path to maximize stockholder value and will not enter into any transaction that does not recognize the full value of this company.

Tomorrow, the ultimatum comes. Decisions will be made and actions will be taken. But the rhetoric still has just begun.

The biggest acquisition news yesterday wasn’t Microsoft-Yahoo but Arby’s-Wendy’s. In both cases, search marketers are asking, “Where’s the beef?”

Better yet, analysts on the Microsoft conference call should have asked, “Where’s the search?”

Microsoft search queries and page views are up year-over-year. By how much? No Wall St. analysts asked the question.

Microsoft reported $4.4 billion in net income for the quarter.

Microsoft’s online services business increased revenue 40 percent to $843 million, including $143 million from aQuantive, which added 96 new publishers this quarter to the Atlas Publisher Solutions, the ad management platform that competes with Google’s DoubleClick division.

Online advertising for Microsoft grew 39 percent. If aQuantive ad revenue ($47 million) is excluded, Microsoft was up 29 percent. Microsoft’s online audience is still growing. Live IDs increased to 18 percent to 448 million.

Microsoft remains focused on the online advertising market (doubling by 2010 to $80 billion).

Yahoo would accelerate growth but the core strategy won’t change: drive innovation and search, increase value to advertisers and publishers through innovation and scale and grow user engagement across MSN and Windows Live properties.

The weak U.S. dollar may be Microsoft’s best friend. While about half of Google’s revenue comes from the U.S., two-thirds of Microsoft’s revenue is derived from users abroad. In addition, about 15 percent of revenue is in high-growth emerging markets.

Microsoft’s strategy of reinvesting existing business, pursuing organic and acquisition growth opportunities makes the company a formidable competitor with or without Yahoo - except in search.

If you love advertising projections, then have we got some numbers for you. eMarketer has released new projections for both mobile advertising and online advertising.

This year, US mobile ad spending is expected to reach $1.7 billion, up from $878 million last year. By 2012, it will reach $6.5 billion in the US, but it’s the Asia-Pacific market that’s expected to dominate the mobile landscape by then, with the middle class in China and India making up the bulk of that demographic. Worldwide, mobile ad spending is projected to reach $19 billion by 2012.

Meanwhile, online spending is expected to continue growing, the the rate at which the growth will occur will decline, at least for a few years.

In 2008, eMarketer projects online ad spend to reach $25.9 billion, a 23% increase over 2007 spending. It’s slightly lower than their previous 2008 projection set at $27.5 billion, released in October 2007.

But in 2009, expect to see the growth rate drop to 15.8%, followed by 16.7% in 2010 and 17.1% in 2011. Things start to look robust again in 2012, when a recovered economy is projected to boost the online ad spend up by 24.4% and reaching a whopping $51 billion.

Related Reading:
Report: Online Ad Growth Slowing
The Offline Benefits of Online Advertising
Google + DoubleClick = 69% of Online Advertising Market
How Search Will Save Online Advertising… Again!

The EU is reportedly planning to approve Google’s $3.1 billion acquisition of online advertising powerhouse DoubleClick. Though the Commission gave itself an April 2 deadline, approval is expected to come as early as next Tuesday, according to Bloomberg.com.

The EU decision comes on the heels of the US Federal Trade Commission’s approval this past December. This will come as unwelcome news to Microsoft, which has been complaining about the potential for Google to gain monopoly status in the online advertising market. The company said last year that the acquisition would provide bring 80 percent of the market under Google’s control. Last year, Microsoft acquired DoubleClick competitor aQuantive for $6 billion.

Another concern of both Microsoft and EU Commissioners has been the question of privacy with the combination of Google and DoubleClick’s massive databases. But with the EU apparently set to approve the acquisition unconditionally, those fears have either been alleviated or will go unanswered for the time being.

The news gave Google a slight boost in stock prices today, which have declined in recent months over reports of a slowdown in growth on clicks for their internet ads.

Yahoo mailed a letter to shareholders outlining the reasons the Board believes Microsoft’s proposal significantly undervalues Yahoo and isn’t in the best interests of Yahoo stockholders.

In the missive Yahoo CEO Jerry Yang emphasizes its strong brand, financial strength, strategic investments, technology, and relationships with marketers, reminding shareholders the company holds a leadership position.

The upside for Yahoo without Microsoft? Not surprisingly, Yang sees “a huge market opportunity” in the $45 billion online advertising market projected to grow to $75 billion in 2010.

A copy of the letter from CEO Jerry Yang follows:

Dear Stockholders,

On February 1, 2008, Microsoft made an unsolicited proposal to acquire your company. As much has been reported in the press recently, I wanted to reach out to you personally to let you know why your Board of Directors, after a careful review by Yahoo!’s management along with our financial and legal advisors, believes that Microsoft’s proposal substantially undervalues Yahoo! and is not in the best interests of our stockholders.

Most importantly, I want you to know that your Board is continuously evaluating all of Yahoo!’s strategic options in the context of the rapidly evolving industry environment, and we remain committed to pursuing initiatives that maximize value for all our stockholders.

We have a unique combination of strengths

– Yahoo! is one of the most recognizable and admired brands in the world. We have over 500 million users (nearly 1 out of every 2 internet users worldwide). In the U.S., we are # 1 in many of the most used online services including personalized home pages, mail, news, music, shopping and travel. Because we have leadership positions in so many indispensable online services, users spend more time on Yahoo! sites than anywhere else online.

– Yahoo! is an attractive partner for marketers. Yahoo! is #1 in online display advertising, which represents 90% of the advertising inventory on the web, and we are also a leader in search marketing and a pioneer in the growing fields of mobile advertising and online video advertising. Through Yahoo!, advertisers can now connect with consumers on our owned sites as well as those of our growing network of partners including eBay, Comcast, AT&T, a consortium of over 600 newspapers, Forbes.com, Cars.com, WebMD and more.

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There have been rumors of late about some sort of Microsoft/Yahoo hookup — and here it is. Microsoft just tendered a $31/share bid for Yahoo. All of Yahoo.

It’s about the advertising. From the press release: “The online advertising market is growing at a very fast pace, from over $40 billion in 2007 to nearly $80 billion by 2010. The resulting benefits of scale along with the associated capital costs for advertising platform providers make this a time of industry consolidation and convergence. Today this market is increasingly dominated by one player. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners.”

Steve Ballmer, Microsoft CEO said in a statement: “We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.”

After the jump, Ballmer’s letter to Yahoo board members. We’ll be following developments closely, promise.

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In 2007, the Japanese online advertising market was projected to be worth between $3.4 billion (Dentsu) and $4.1 billion (PricewaterhouseCoopers). By 2011, Dentsu estimates that Japan’s online ad market value will be $6.8 billion; PrivewaterhouseCoopers says it will be slightly more at $7 billion.
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Online advertising in China is reaching double-digit growth so far in 2007, according to Nielsen’s AdRelevance report.

The value of online display advertising in China reached RMB 2.6 billion in Q3, 2007 an increase of 14 percent over Q2.  Total online advertising value for the year to date is RMB 6.6 billion.
The value of online display [...]

Google’s stock closed last week at $637.39, Wall Street thinks Google’s third quarter earnings announcement may come in 50 cents higher per share than last quarter, the company gets two-thirds of the web searches and 40 percent of the ad revenue. They’re screwed.I don’t remember reading the ‘weakness due to strength’ argument in Suzuki, but [...]