Online Ad Spending Estimated to Hit $20 Billion

by: Bambi Francisco

As the five-year bull market hits some turbulence, visions of the Internet bubble bursting back in 2000 are easily recalled. But there are many differences, the least of which is an underlying advertising industry supporting many Internet ventures.

This year, advertisers are estimated to spend nearly $8.3 billion on paid search, according to eMarketer. Google (NASDAQ:GOOG) and Yahoo (NASDAQ:YHOO) are beneficiaries of much of those dollars.

In 2007, online advertising spending is estimated to grow 19% to $19.5 billion, according to eMarketer. While the 19%-growth rate is a sharp slowdown from the 30-plus percent growth seen in 2004 through 2006, the increase is six times faster than the rise in overall advertising, which is expected to grow 3.2% this year.

Video advertising is expected to see the fastest growth, with projected spending up 89% this year.