Many in the search industry expect online advertising to take a smaller hit (if any) from the struggling economy than other types of advertising. But that view isn’t shared by all. According to AdAge today, some analysts think online advertising is as vulnerable as other sectors:

“Failed banks … job losses and lower consumer confidence now characterize the macro economy,” wrote Sandeep Aggarwal, an analyst with Collins Stewart. “We believe this will hurt the internet sector more than currently believed.”

Google’s advertising chief Tim Armstrong says his company is watching the economic situation closely to see what online advertisers do. Several search advertising companies tell AdAge that they haven’t seen a slowdown in online spending.

Here’s one impact of the current economic situation: Russian search engine Yandex has postponed its IPO, which was originally supposed to happen before the end of the year.

Here are two headlines that don’t look good together:

• Washington DC latest to drop Microsoft for web apps
• Google Gmail, Other Apps, Vulnerable To Attack

Government employees in Washington, DC — not U.S. government employees, but District of Columbia municipal employees — are ditching Microsoft Office in favor of using Google Apps. The contract is worth an estimated $500,000. Meanwhile, the second headline reports that two security researchers have notified Google that Gmail and other Google Apps are both vulnerable to hacking. One of the researchers says he went public with the vulnerability because Google’s security team hasn’t said anything since they promised to investigate it back in April.

Small business owners have a new advertising option on MySpace. It’s called “My Ads,” and it offers a self-serve system where advertisers can create an ad online (or upload their own), target the ad toward specific demographics, set a budget, and begin advertising right away. Of note is that My Ads only supports graphical banner ads; MySpace continues to get its text-based ads from Google. Check out TechCrunch for some screenshots of the demographic targeting My Ads offers.

Related Topics: Search Biz