• by Wendy Davis  @wendyndavis, December 1, 2006

Yahoo's branded advertising revenues are likely to grow just 20% this quarter, down from 40% last year. That's a new prediction from brokerage house Merrill Lynch, which issued a new report on Yahoo Thursday.

Despite the projected slowdown in growth, the report was positive overall, with Merrill Lynch reiterating its buy recommendation. "Our industry contacts indicate that Yahoo's premium inventory remains a differentiated market for quality conscious advertisers, which we think should provide a competitive buffer that will enable Yahoo to continue to increase CPMs," wrote research analyst Justin Post.

For next year, Merrill Lynch forecast 21% branded revenue growth--including 4% growth from the recent acquisition of a 20% stake in automated ad online exchange Right Media.

That estimate assumes 6% growth in page views and 8% growth in monetization for premium inventory, and 32% page view growth and a 31% increase in monetization for non-premium pages.

The new paid search platform, Panama, also will boost revenue in the second half of next year, predicted Merrill Lynch. The brokerage house anticipates that Panama alone will account for a 14% increase in revenue per search in next year's third and fourth quarter.