With quarterly earnings about to be reported by major Internet media and advertising companies, analysts are saying that growth should continue to be strong.
There has been a considerable amount of chatter because of Yahoo's recent disclosure that they were showing weakness in their advertising dollars for autos and the financial services spaces. Most people see this very specific to Yahoo, and not to the overall Internet ad sector.
Aaron Kessler, a senior research analyst at Piper Jaffray & Co. said, "We continue to see robust growth in the online advertising sector." The firm believes that growth could be around 30 percent for the quarter; similar to gains in the early part of the year.
While some aren't quite as optimistic as Kessler, they do say that if there is a slowdown, it will result in growing in the 25% range; still not bad at all.
The growth should continue on for a long time, the question is more how long can this torrid growth sustain itself. Nothing can grow 30% a quarter for years.
Internet growth will stay strong because that is the area where consumers are transferring their time and energy to. Percentages of ad budgets will continually be allocated in larger doses as this reality continues. The news about big companies losing share, for the most part, won't be what determines the health of online ad spend, rather the larger amount of dollars will be fought over by every company in the world that has an ad model for their business.
Those that have a quality niche market, over time, will win big. It won't matter what the huge companies are doing in their changing dynamics. They will fight back and forth for the same dollars. We just need to keep plugging away in our market and not worry about the condition of the Yahoos.
The biggest thing that will affect the ad market is always the condition of the economy, not the condition of individual companies.
Comment Preview