Just an Online Minute... Portal Trouble

by Aug 29, 2000, 12:00 AM
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As AdWeek reported yesterday, a Lehman Brothers analyst raised doubts about Yahoo's valuation and prospects for the second half of the year amid a decline in ad impressions and "a difficult environment for dot-com companies."

According to the story, Lehman analyst Holly Becker said there is no sign traditional advertisers are embracing online advertising. Ms. Becker added that Lehman considered it "highly unlikely" that traditional advertisers "will pick up the slack of the dot-com fall-off."

Becker is not the first market analyst to doubt the Internet's traditional-advertiser-supported future. If a giant like Yahoo is in trouble, what does that mean for the rest of the web? And does it mean Jupiter's newly released predictions are over-hyped?

The research firm predicts online advertising revenue is expected to reach $16.5 billion by 2005, and, according to a recent Jupiter executive survey, marketers plan to increase Internet advertising spending at a higher rate than in any other medium.

Approximately 73% of advertisers said they would increase their online advertising spending in the next 12 months, in contrast to the 43% who said they would increase their magazine spending; 37% plan to increase their cable-TV budget. This expected growth would propel the Internet to fourth place as an advertising medium - behind that of broadcast-TV, radio, and newspapers - it will represent almost 8% of the total US advertising market by 2005.

So whom do we believe? Or should we just give up on following prognoses and adopt an "I'll believe it when I see it" attitude?

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