No Bust in Internet Stock Boom

The Internet sector will step into 2008 with a tail wind, thanks to continued strong growth in online ad spending.

But competition should accelerate as a growing number of players vie for for a share of ad dollars. In the process, the fate of individual companies will be increasingly tied to their own technology and maneuvering. The sector as a whole will not be as important to each company.

Investors should expect brutal turf wars as the flood of ad dollars shifts online.

In contrast to traditional forms of advertising -- where fears of a recession have many analysts predicting a pullback -- the forecasts for online advertising continue to be robust.

Research firm eMarketer predicts that online ad spending will grow 29% in 2008 to $27.5 billion in the U.S. alone. Paid search ads and display ads will account for about 40% and 21.5% of the spending, respectively.

Generally, Internet stalwarts Google(GOOG Quote - Cramer on GOOG - Stock Picks) and Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks) have dominated this market.

Google has been the leader in paid search, and Yahoo! has headed the ranks by far in display advertising. In 2008, however, the lines between Google and Yahoo! will blur -- and everybody from eBay(EBAY Quote - Cramer on EBAY - Stock Picks) to a newly structured IAC/InterActive(IACI Quote - Cramer on IACI - Stock Picks) will make aggressive bids for ad dollars.

« Previous Page

1 2 3 4 5

Next Page »