In a direct connection to the increasing move of advertising dollars to the Internet, MSN (MSFT) advertising revenue increased by $77 million in the last three months of 2006, equal to around a 20 percent increase of over the same period of 2005.
In reference to the advertising revenue, Chris Liddell, Microsoft's chief financial officer said, "If you break that down into display and search, there's a better story on the display side."
When you consider that MSN has lost some significant ground in the search area, the dispaly ad revenue and results is even more impressive. For search the 
numbers didn't make the MSN leaders too happy as at the beginning of the year they had a 13.7 percent share and has dropped over 3 percent to only 10.5 percent now.
Concerning the display ad business, revenue surged by 28 percent from image-based ads, according to Nielsen//NetRatings. The majority of that coming through MSN's email, messaging, home pages and portals.
To me this is a healthy sign as far as display ads go for content providers using an ad model to monetize their business. This should be a healthy, growing online area for years.
The only thing that could possibly threaten it would be if the economy goes through a recession. Companies tend to cut back big in advertising during those times. But even there it could be not as bad as it will be through traditional media outlets. Online advertising dollars are moving online at a rapid pace. Even if a recession does hit, dollars may continually move that way even if overall ad dollars are cut back.
There is the unknown that we really have never went through a recession since the online ad market has taken off. The impact can only be guessed at, as we have no history to draw upon. Still, I think online advertising would be less impacted than offline in these next few years at least.
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