JPMorgan: Search could reach $30 billion in 2008

One of the first forecasts for the new year is out and it reports that online advertising will begin to see a decrease in revenues but online companies will continue to see higher profits than their offline counterparts. Analysts from JPMorgan Chase released an outlook this week which indicates Internet publishers, search engines and ecommerce hubs could grow four time faster than the generalized stock market.

by Kristina Knight

Though the overall forecast is for decreased earnings online, one analyst expects online advertising cost per thousands (CPMs) to increase through the year.

"We expect revenue growth to decelerate to 21.2% in 2008, from 25.6% in 2007," wrote JPMorgan Chase analyst Imran Khan (via MediaPost). "We are projecting 34% earnings growth for our coverage universe, compared to 8% for the S&P 500."

This growth is expected because ad inventory from offline areas will shrink and online publishers will become more adept at monetization of their websites.

Perhaps the biggest boon in 2008 will be in the search realm. As part of the forecast, JPMorgan Chase expects search to reach more than $30 billion this year. Search brought in just over $26 billion in 2007. Search ad dollars are expected to continue to increase at about 28% annually through 2011. Search could reach $60 billion by 2011 according to the forecast.