There's good news and bad news on the online advertising front.

The welcome news comes from an IAB press release that came out yesterday, indicating that Web-based advertising hit $15 billion during the first half of the year. It represents a sharp 23% increase over the first six months of last year and it's the strongest first-half growth that the industry has seen since 2007.

You should take the showing seriously. IAB -- or Interactive Advertising Bureau -- is actually a collection of hundreds of leading media and technology companies that account for selling 86% of this country's online advertising.

Growth in Web-based sponsorships isn't a surprise. Online advertising is easier to track, readily accountable, and more often than not cheaper as a way to generate leads compared to more traditional media salvos. IAB also reveals that performance-based advertising -- where advertisers don't have to pay unless they generate a lead or a sale -- is now up to 64% of the Internet advertising pie.

Now let's get to the bad news. How did your Web-savvy investments perform during the first half of the year? Now that we know that 23% growth is the average, are the publicly traded dot-com heavies gaining or losing market share?

  • Revenue at Yahoo! (Nasdaq: YHOO) has plunged nearly 24% through the first six months of the year. Outsourcing search through Bing is weighing on that chunky decline, but even display advertising -- Yahoo!'s marketing emphasis lately -- has been a challenge. Display advertising revenue before traffic acquisition charges rose by only 10% during the first quarter and a mere 5% during the second quarter.
  • Ad revenue at AOL (NYSE: AOL) fell by 4% during the first half of 2011, though it did inch 5% higher during the second quarter. International declines are offsetting display advertising gains closer to home, but even there AOL isn't delivering anything close to 23% top-line growth.
  • IAC (Nasdaq: IACI) is holding up considerably better, but Barry Diller's interactive empire has grown revenue through the first half of 2011 by 22%, just missing the cut.
  • Surely Google (Nasdaq: GOOG) will save the day, right? Thankfully, Big G's revenue has soared 29% through the first six months of the year. As the leading online advertising platform, it would make sense that Big G's performance helps cover for the weakness of other dot-com giants. However, that growth is padded by Google's healthier growth overseas and favorable currency translations. Just 46% of Google's revenue during the first half of the year was generated in this country, compared to 48% during the first six months of 2010. In other words, the 29% figure is inflated.

So where is the real growth outside of Google's pace car? Social networking is a key driver. Facebook is still private, though white-collar rival LinkedIn (NYSE: LNKD) saw its marketing solutions revenue more than double during the first half of the year.

The takeaway here is that online advertising is a booming business in the United States, but investors need to make sure that they're buying companies that really are on the right bandwagon.

If you want to track these online advertising specialists to see how they hold up, consider adding them to My Watchlist.