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Arrington: January Spending To 'Fall Off A Cliff'

The U.S. may have been in recession for a year now, but TechCrunch's Michael Arrington says the fact is that most Internet-base companies haven't seen their revenues drop yet. Amazon, for example, recently recorded its "best ever" holiday sales period.

Of course all that's about to change for content sites, he says, starting this week. "Display advertising revenue is going to fall of a cliff in January according to a number of content sites I've spoken with who rely on advertising for revenue," Arrington says. One sales exec said that sales through December remained strong as advertisers used up their marketing budgets, but "there are few buyers for this next fiscal quarter, and those few that are buying are looking for steep discounts."

How bad is bad? Arrington says he's heard estimates of 30-80% revenue drops over the next three months from companies that create different kinds of content; "the median pessimism point is around 50%," he said. This goes for everyone from large public companies to smaller one-person blogs. "Absolutely no one I spoke with said they expect an up quarter," Arrington said, adding that the upside is that those companies who survive will be leaner and stronger when the recession ends.

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