Search Advertising to Reach $5.6 Billion in 2005

Both Google and Yahoo saw a healthy rise in stock price today as a new report suggested huge growth in the search advertising industry.

Investors moved into both Google and Yahoo shares, making technology stocks one of the overall market’s main drivers. Google shares rose $5.69, or 2 percent, to $285.25 in afternoon trading on the Nasdaq, while shares of Yahoo jumped 81 cents, or 2.2 percent, to $37.44.

A report from Merrill Lynch & Co. projects search advertising will generate about $5.6 billion this year — then more than double to $12.3 billion by 2009.

As more people switch to broadband, Merrill Lynch predicts they will become savvier web users.

"We continue to believe that broadband growth is driving Internet traffic growth," said Merrill Lynch analyst Lauren Rich Fine. "Especially with recent discounts by broadband providers, we believe this will drive more users online or to simply switch from dial-up connections to high bandwidth connections."

This makes perfect sense to me because there are a lot of people that still don’t even realize what search engine advertising is, and I’m always surprised at the number of people that are still on dial up connections.

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