INTERNET AD REVENUE UP 11%

Quarterly Estimate Marks Second-Straight Increase

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NEW YORK (AdAge.com) -- In a sign that the online advertising sector may be picking up steam, Internet advertising revenue for the first quarter of 2003 hit $1.6 billion, a 7% increase over fourth-quarter 2002 and an 11% lift over first quarter 2002, according to a report out today from PricewaterhouseCoopers and the Internet Advertising Bureau.

The first-quarter estimate marks the

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first time in two years the battered online industry has hit two consecutive quarterly increases.

Paid search
A bright spot in the sector includes paid search engine advertising, which accounted for 15% of online ad revenues in 2002, according to Pricewaterhouse. Paid search is expected to account for 20% to 25% of revenues in 2003.

Growing household adoption of broadband Internet is also expected to help online ad revenues. The Yankee Group estimated 16.4 million residential broadband subscribers at year-end 2002, and 48 million by 2007.

Top 15 ad sellers
Conducted by PricewaterhouseCoopers, the Internet Ad Revenue Report estimates first-quarter ad revenue by compiling first-quarter 2003 data from the top 15 online ad sellers. First-quarter results will be announced next month.

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