Media World: Imagine this year without the election and Olympics

This is the year that most media companies would rather forget. But things could have been much worse were it not for the Olympics and presidential election.

Advertising and marketing spending probably grew about 4% this year to $412.4 million, according to Outsell Inc. Online advertising revenue gained about 12% to $105.3 billion. That category now exceeds TV, radio and the movies. The news for Web ads is not all good, however. The Internet Advertising Bureau estimates that spending was flat in the third quarter compared with recent periods. This proves that Web advertising cannot escape the recession.

Companies are going to keep a tight grip on their marketing budgets. When times are bad, it's one of the first things that gets cut. Even Google Inc. (NASDAQ: GOOG) is not immune. Shares of the world's largest search engine are down more than 57% as investors worried whether the company was running out of gas. During the third quarter, paid clicks on ads on Google sites and those of its partners rose 4% over the second quarter. Odds are the fourth quarter will also show lackluster quarter-to-quarter results.

The picture at Yahoo! Inc. (NASDAQ: YHOO) is even worse. Revenue at the Internet portal company barely budged in its most recent report. Advertisers are fleeing the site in favor of Google and smaller, more targeted publishers. That trend is bound to continue as marketers get pickier about where they spend their money as the economy worsens. Yahoo's search business will suffer as companies shift their spending to Google. In previous years, advertisers worried about spending all of their budgets with Google. No longer.