After downgrading Google yesterday and “to reflect a deeper than expected impact of the global economic slowdown,” Jefferies analyst lowered their online advertising revenue estimates for 2008 and 2009 — “Again!” they managed to cheerfully note:
- We now expect global online advertising in FY08 to grow at roughly 17% to $48.4B down from 20%, and in FY09 at 8% to $52.3B down from 13%.
- Our revised estimates imply 23%Y/Y and 9%Y/Y growth in search revenues in FY08 and FY09.
- They also imply growth in FY08 and FY09 of 10% and 6%, respectively for display and other non search ad revenues.
- We believe YouTube will overtime become a major driver of display ads.
We think the Jefferies analyst are still too optimistic. Display advertising will shrink next year. In fact, Gawker Media owner Nick Denton says it could collapse by 40% before the downturn is over.
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