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In a conference call with analysts March 14, Merrill Lynch reduced an already lowered estimate for 2001 online ad spending, saying that it expected the category to decline by a total of 25% during the course of the year. The investment bank says it now believes that online ad spending will total $6 billion instead of the $8 billion the company had predicted as recently as January.

Merrill Lynch also said that AOL Time Warner would be minimally impacted by the overall negative advertising environment, in part because the media giant is using the America Online service as a "unique asset" to lure advertisers into the AOL Time Warner fold.

Copyright March 2001, Crain Communications Inc.

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