The numbers are pretty impressive. In 2007, internet advertising grew 25% to $21 billion. But Microsoft (NASDAQ: MSFT) may want to have another look at what it is offering for Yahoo! (NASDAQ:YHOO).
According to The Wall Street Journal (subscription required), internet ad revenue grew 35% in 2006. Between a possible recession and the natural slowing of increases as the dollar base gets larger, overall dollars in this market may only grow 15% in 2008, especially if the recession is deep. That would devalue almost every media company that gets its revenue from internet ads.
Companies such as Google (NASDAQ: GOOG) have driven their stock prices by being able to deliver targeted ads, which are an efficient way to reach clients. Much of the buyout activity for ad-serving firms is to extend the scope of this business.
But, just as the M&A work is done, internet advertising may be hitting an awful headwind.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
2-26-2008 @ 9:08PM
LeadingRich.com said...
One other item to look at with Google is their global dependence of traffic. With Pakistan shutting down YouTube, are they going to be vulnerable to global impacts of the world wide web? http://leadingrich.com/2008/02/25/pakistan-shut-down-youtube-to-two-thirds-of-the-world/
The global world and any shakeup will impact Google significantly. I just wonder how they are going to smooth out the rocky nature of the Geo-Political risks?
http://leadingrich.com