Noting that, in 2007, Internet stocks delivered a 14 percent return versus 5 percent
for the S&P 500, JPMorgan expects 34 percent earnings growth in 2008 for the Internet stocks it covers versus 8 percent earnings growth for the S&P 500.
—Search advertising will continue to dominate, rising from $22 billion globally last year to $50 billion in 2010. Here is JPMorgan’s forecast for the U.S. search advertising market (it expects global search revenues to rise 38 percent in 2008 to $30.5 billion):
—And here is its forecast for the U.S. graphical advertising market. Average CPMs for online ads, which bottomed in 2007 at $3.31, will start to rise again (see table below):
