Web spending poised to rise 34% in 2005

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Online advertising spending in 2004 surpassed the spending during 2000, the most-successful boom year so far. And it is predicted to grow 34% to $12.9 billion in 2005, according to revised numbers released by online-market-research company eMarketer. In January, the research outfit had predicted growth this year of 21%.

The firm revised its predictions after seeing Google and Yahoo's first-quarter financial results in late April. Google's U.S. ad revenue was an estimated $757 million for the first quarter. Yahoo's U.S. ad revenue was estimated at $715 million. (EMarketer estimated U.S. revenue because the two companies' financials referred to global revenue only.)

Rich media will lead growth among online ad formats in 2005, with a 47% spurt. Paid search will experience only a 40% growth. The reason is the increase in consumers installing broadband connections. EMarketer predicts 60% of online households will have high-speed hook-ups by the end of the year.

"More than speed, the importance of broadband is its pervasiveness," said David Hallerman, senior analyst at eMarketer. "Like TV or radio, you turn it on and it's always there."

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