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 Will Online Ad Growth Continue in 2008?  

Will Online Ad Growth Continue in 2008?

JANUARY 4, 2008

Yes, but the economy could impact advertising.

JP Morgan's latest research brief predicts that holdings in US Internet companies will outperform the overall stock market in 2008. This is despite the firm's expectation of slightly slower revenue growth for the online sector.

"We expect revenue growth to decelerate to 21.2% in 2008, from 25.6% in 2007," wrote Imran Khan, analyst at JP Morgan, in the report. "We are projecting 34% earnings growth for our coverage universe, compared to 8% for the S&P 500."

As part of its forecast, JP Morgan said that growth in US paid search ad revenue—currently the largest segment of US online ad spending—would fall to 31.9% in 2008, down from 36.8% in 2007.

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