Search Biz: Online Marketing Will Continue To Grow Despite Slowdown, Yahoo Woos Shareholders, & Alibaba Wants To “Close Sesame”

Markets are riding rollercoasters, central banks are bailing out major financial institutions, inflation is rearing its ugly head, and consumers are apparently pulling back into their shells, but none of this gloom-and-doom is even remotely threatening the growth in online marketing and advertising spend, according to eMarketer.

The market research firm is predicting that, despite current economic jitters, US online advertising will continue to grow through 2008. Online ad spending will rise by 23%, as this chart shows:

According to eMarketer, search will account for the largest portion of online ad spending in 2008, at 40%. That percentage will decrease slightly through 2012, when it will account for 37.3% of US online ad spending.

Yahoo management is spending the week on a roadshow meeting, with major shareholders pressing the case that it’s worth more than Microsoft’s current offer of roughly $42 billion, according to the Wall Street Journal. Yesterday, Yahoo said it expects to double cash flow in three years and also reaffirmed its 2008 financial outlook, suggesting a value of $40 per share, far above the approximately $29 per share current offer (the deal is for part stock/part cash, so its value fluctuates based on Microsoft’s current stock price).

In Alibaba seeks buyers for Yahoo-owned stake, the Financial Times is reporting that, should Microsoft succeed in acquiring Yahoo, Jack Ma and company would seek to buy back the 39% stake in Alibaba that Yahoo owns. Yahoo is the largest shareholder in the Chinese portal and online trading site thanks to a 2005 deal that merged Yahoo China with Alibaba.

The FT article says that “the investors include a Chinese sovereign wealth fund, this person said, adding: ‘foreign involvement is viewed by government and consumers as undesirable.’”

From the “just what we need, yet another clone” department, Paid Content is reporting that Video search engine Foooo gets $1 million second round venture capital financing. The site offers a search function, a category directory, as well as featured videos from sites like YouTube and Veoh.

Former Yahoo Inc. global ad sales chief Greg Coleman has joined NetSeer Inc., a Web search advertising startup, as its president and CEO, according to the Wall Street Journal. “I saw something very, very big and very, very young and the combination of those things is what I wanted to do,” he told the Journal.

According to its bare-bones web site, NetSeer “is a technology start-up focused on next generation search and ad targeting. Pioneers of intention-based ad targeting, NetSeer uses sophisticated mathematics and algorithms to make advances that were previously unattainable in Internet advertising. NetSeer was founded in March 2006, but has developed its substantial and unique technology in stealth since 2004 and has filed 10 patents to date. The company will disclose more about its technology and offerings towards the end of 2008.”

Thinking of buying or selling an internet-based company? Take a look at Shoemoney’s terrific How To Evaluate a Internet Property Part 1 – Payroll post. Jeremy has consulted for accounting and law firms on valuing internet companies, and he shares his experience in this first of what promises to be several interesting and informative posts.

Related Topics: Channel: Industry | Search Biz

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About The Author: (@CJSherman) is a Founding Editor of SearchEngineLand.com and President of Searchwise LLC, a Boulder Colorado based Web consulting firm. He also programs and co-chairs the Search Marketing Expo - SMX conference series.

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