U.S. Online Ad Revenue Surges 37%

U.S. Internet advertising revenue rose 37% in the first six months of 2006 compared with a year earlier, hitting a record of nearly $8 billion, according to a study released Monday.

In the second quarter, Internet advertising revenue totaled nearly $4.1 billion, a 36% increase over the same period in 2005, and up 5.5% over the first quarter of 2006, the Interactive Advertising Bureau and PricewaterhouseCoopers reported.

Their study comes days after Yahoo Inc. last week raised concerns that ad spending in new media could be slowing.

In warning about its revenue, Sunnyvale, Calif.-based Yahoo pointed to weakness in advertising from automobile and financial firms, two key sectors in marketing.

Since the disclosure, analysts have been divided over whether the issue is solely Yahoo’s or signals a wider slowdown in online ad spending.

Until now, signs have pointed to strong growth for online ads, largely at the expense of newspapers and radio.

Monday’s figures suggest that at least through the second quarter, Internet advertising revenue continued to surge.

Search-related advertising rose 40% in the first half of the year, while classified ads rose 20%, according to the study.