Internet advertising will plunge 25% in 2001 to $6 billion, according to Lanny Baker, Salomon Smith Barney's Internet analyst, speaking at Tuesday's Big Picture media conference.
Baker said dotcom companies, which accounted for about 50% of last year's $8 billion in ad sales on the Web, will account for just 15% of the 2001 total. As the world knows, it's been a rough eight months for the Internet world, as investors decided to bail without a positive earnings story in sight for the sector. Baker said some 15,000 jobs have been cut from the sector in those past eight months.
But Baker said he remains convinced that the sector will rebound in 2002 "like a phoenix from the ashes," as online usage and penetration continues to grow at an average annual rate of between 25% and 35%. Top performers: AOL Time Warner and, despite recent problems, Yahoo. - Steve McClellan