Well, this was inevitable, online Advertising revenues are down this last quarter.  Could this be the end of the Internet as we know it?  Is this the time where so many websites will disappear?  Of course not!

Let’s look back at online advertising a few years ago, say 10 years ago.  I remember reading an old paper (from 1997) on ad servers technology last week (link here), it mentionned that online advertising was predicted to grow up to 2 billion dollars in 1998. Wow, 2 billion dollars.  Google can do that under a month now.  So while online advertising has slowed down to a little under 7,9 billion dollars for the first quarter this year, it’s still massively bigger than the numbers we were witnessing during the end of the last millennium.

Everyone knows the slowdown in online advertising we are witnessingis obviously a side effect of the current business cycle.  It’s too bad the vast majority of publisher’s revenues still rely on advertising, it leaves them at the mercy of their marketing budgets. You cannot blame them for that, publishers are in a near perfect competition market: low entry costs, homogeneous products (after all, content remains content), many players and perfect information.  Making users pay for their content is like a bar that has a Guy’s night, where women pay to get in and men don’t…you are bound to fail.

I ignore what the exact number of Ad networks, Ad servers, Ad exchanges worldwide is (I estimate is close to 450), but I know there are enough to indicate it’s a growing industry that’s obviously profitable (see GOOG in NASDAQ) and a lot of players are trying to get a share.  In the coming years, I doubt we’re going to go back; the Internet is more popular, cooler, funner and faster than ever. Advertisers are bound to keep knocking on the doors of publishers who grab the attention of visitors.  The truth is, online advertising is real and here to stay.  The markets are going back up, Obama is kicking butt and summer is right around the corner.  Pretty soon we’ll all have forgotten about the recession (well…let’s hope so…).