Online Ads: Goodbye to Real Growth?

Indeed, for all the decelerating growth in online ads, the overall ad industry is expanding even more slowly -- precisely because of the shift away from traditional media. In his pessimistic scenario, Lindsay estimates only a 4.3% rise in total advertising revenue growth this year vs. a 20% growth for online ads alone.

But Stanford analyst Clay Moran advises caution on online advertising, noting a deceleration in e-commerce spending, which in turn influences the way businesses manage their marketing dollars.

But even after emerging from a recession, things may never be the same. "From a big picture, it's hard to imagine that the growth doesn't slow as the industry matures," Moran says.

He adds that most investors realize that growth rates can't remain extraordinarily high forever. Indeed, even a superstar like Google is finally starting to see some weakness, although it's unclear how much of it has to do with the current economic climate.

The company took a beating last month when it missed Wall Street estimates. And although revenue was up 39% over last year, it was up only 3% sequentially. Moran expects Google's full-year revenue to grow by 39%, a significant drop from 60% last year. For next year, he expects revenue growth of 27%.

Yahoo! showed even weaker revenue growth in the second quarter, up a mere 6% from a year ago. Its softening performance with display ads reflected a larger industry trend, with sectors like travel, retail and finance feeling the most pain. Moran's expectations for Yahoo!'s revenue growth is far lower than for Google -- about 11% this year compared to last year's climb of 12%.