• May 9, 2006

Merrill Lynch raised its forecast for this year's online ad market to 28.7 percent growth--up from its previous estimate of 27.5 percent growth, based on a stronger-than-expected first-quarter showing by Google. In a report issued Monday, Merrill Lynch predicted that search advertising alone would grow 32.7 percent, up from the prior forecast of 31.6 percent. Merrill Lynch now estimates that the U.S. online ad spend will total around $16.15 billion this year, or 5.5 percent of total ad spending. The revision was prompted by Google's most recent earnings report, which showed that the company took in $2.25 billion in revenue, marking a 17 percent increase from the fourth quarter, and a 79 percent increase over the first quarter of 2005. -- Wendy Davis