• Forbes, Wednesday, August 29, 2007 11:30 AM

There may be some 135.5 million Americans watching online video, but no one is cashing in on the phenomenon. Even with 89 percent growth this year, eMarketer predicts that online video spending will represent just 3.6 percent of the Internet ad pie, or $775 million. By 2011, the Web research firm expects the market to expand to $4.3 billion, but that would still only be around 10 percent of the greater market.

Web video has a long way to go before it rivals search marketing, much less the huge numbers racked up by television advertising. Judging by its numbers, eMarketer doesn't expect online video and online TV usage to overtake digital cable anytime soon. For many believers in Web video's future, this will be a watershed moment.

Some early attempts at advertising on online video clips have failed. Chief is the repurposed 30-second ad. Users don't appreciate sitting through television-length ads when the clips they're watching are nearly as long. Professionally produced content still trumps user-generated video when it comes to advertising--for obvious control reasons -- but keeps the scope of possible revenue limited.

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