Online ads hopes lowered
Beleaguered dotcom stocks have been given another kick in the teeth, this time by a leading fan - Merrill Lynch Internet analyst Henry Blodget, who has lowered his expectations for online advertising growth next year to between 15 per cent and 20 per cent from 30 per cent and 40 per cent.
The lowest point will be in the first quarter of next year when growth in advertising will be in single digits as traditional firms take up the slack from dotcom advertisers which fall by the wayside.
Mr Blodget's downgrade caused leading United States portal operator Yahoo! to fall 14.7 per cent to US$41.6875 on Tuesday, its lowest in two years.
'In hindsight, it appears that almost all of the market's acceleration over the last five quarters . . . may have been the result of free spending by dotcoms [which aren't spending freely any more],' Mr Blodget said.