"We expect revenue growth to decelerate to 21.2% in 2008, from 25.6% in 2007," Khan wrote in the report released early this morning. "We are projecting 34% earnings growth for our coverage universe, compared to 8% for the S&P 500."

Khan, who has scheduled a briefing on his outlook for later today, also wrote that he expects online ad CPMs (cost per thousands) to "accelerate" during 2008 due to two big factors: a "tighter" supply of advertising inventory from major offline media outlets; and "better monetization techniques" from online publishers.

Khan also revised his outlook for the global search advertising marketplace in 2008, predicting worldwide search revenues will rise to $30.5 billion from $26.2 billion in 2007. He attributed the growth to "strong volume trends, better-than-expected monetization, and continued robust growth in Continental Europe." Khan said search advertising will grow at an annual rate of 28% over the next four years, and would reach $60 billion by 2011.

JPMorgan reaffirmed its top Internet stock picks for 2008, selecting shares of Google, Yahoo, Expedia, Omniture, Shutterfly, and Monster.com as "overweight" recommendations.

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