EMarketer is lowering its forecast for U.S. Internet spending growth "by a few percentage points" analyst David Hallerman tells Bloomberg News, adding that his estimate for 2009 is "also probably too high." The Web researcher had predicted growth of 23%, or $26 billion in total sales, for 2008 and 16% growth for 2009. Meanwhile, signs elsewhere also indicate that the online ad market is softening. Last month, Google CEO Eric Schmidt admitted for the first time that the Web leader is facing a tougher economic environment. That said, Google's search ads are faring much better than the display market, …

In a series of letters to the House Energy and Commerce Committee, Google and several other leading Internet companies admitted to using advertising targeting technology without telling consumers. Lawmakers had asked more than 30 Internet companies to reveal how they collect the data they use to target ads. According to the Washington Post, the disclosures were enough for some lawmakers and privacy advocates to start calling for an overarching online privacy law. "Increasingly, there are no limits technologically as to what a company can do in terms of collecting information . . . and then selling it as a …

In the next month, the Department of Justice will decide whether to block the search advertising deal Google struck with Yahoo in June. If everything goes according to plan, Google will begin selling ads on Yahoo Search in early October. In the meantime, the DoJ is soliciting input on what the deal would mean for the ad industry, and while Microsoft's stance is well-known, it's more notable-and perhaps, more surprising-that many big advertisers do not support the deal, either. "We're concerned about the Yahoo! deal," said Rob Norman, CEO of WPP-owned GroupM North America. "For advertisers to prosper, they …

Consumer and children's advocacy groups have successfully lobbied the government to limit junk food advertising on TV; now they're turning their focus to the Web. "We don't want to reduce junk food advertising to kids [on TV] and then find that it has just moved to another platform," said Patti Miller, vice president of children's advocacy group Children Now and a member of the Federal Communications Commission's Task Force on Media & Childhood Obesity. Miller and other advocates worry that food companies are flooding Web sites frequented by young children with aggressive ads for junk food. They point out …

"It's almost becoming routine, these outages at Google's Gmail service," GigaOm's Om Malik wrote after the e-mail service failed for a few hours on Monday. Yes, the entire system failed, which Malik points out is a massive problem for a company that plans to offer Web-based services to large corporations. "We aren't a large company but the losses are very real, especially in productivity," Malik writes. "If an outage of this magnitude can strike Google, the company with a fearsome infrastructure, I wonder who - if any - can plan for the worst." Google is not alone in suffering outages. …

Following Google's announcement last week that its stake in AOL had significantly lost value, analysts were left pondering Google's strategy beyond search. In an SEC filing, Google acknowledged that AOL was probably worth closer to $10 billion than the $20 billion valuation the search giant placed on the Time Warner company when it bought a five percent stake in 2005. Trip Chowdhry of Global Equities Research said Google has shown a knack for overpaying for its investments, citing the Web giant's AOL stake, its YouTube purchase, and the recent acquisition of DoubleClick. Meanwhile, Chowdhry noted that internal projects like …

CitiGroup analyst Mark Mahaney has more or less declared that the Amazon Kindle, much-maligned by Web critics, is going to be Amazon's iPod, says Silicon Alley Insider's Peter Kafka. Mahaney thinks the Web retailer will sell 378,000 units this year, double his initial estimate. Instead of being a $750 million business that accounts for 3% of the company's sales, Mahaney says Kindle will be a $1.1 billion business that accounts for 4%. Where's the evidence? Well, Mahaney claims its impossible to get the numbers from Amazon, so he points to strong customer reviews of the device and the fact …

In its first month on the market, Apple's iPhone 3G has sold 3 million units, says Michael Cote of Cote Collaborative, far surpassing the performance of the first-generation iPhone after its first month in 2007. "They are seeing unprecedented demand," said the former T-Mobile executive, whom Fortune's Steve Morritz claims has been "extremely accurate" with his wireless predictions. Apple would not corroborate Cote's numbers. Morritz contends that iPhones sakes defy an economic slump in which consumer spending and consumer confidence are falling rapidly. If Cote's numbers are accurate, the iPhone 3G is selling much faster than Wall Street anticipated. …