MEDIA-I: Online earnings forecast facing new downgrade

<p>Analysts at Merrill Lynch, including the company's internet </p><p>specialist Henry Blodget, have announced more bad news for the online </p><p>advertising market, with revenues expected to fall 25 per cent this </p><p>year. </p><p><BR><BR> </p><p>The new forecast came just months after Blodget released a report </p><p>announcing advertising revenues would remain consistent to 2000 figures </p><p>at an estimated USdollars 7.9 billion. </p><p><BR><BR> </p><p>The analyst had earlier said first quarter revenue expectations would be </p><p>the "trough" with a sequential reduction of about 10 to 15 per cent from </p><p>the fourth quarter. </p><p><BR><BR> </p><p>Blodget added that the industry could expect "modest sequential </p><p>increases beginning in the second quarter of this year". </p><p><BR><BR> </p><p>The analysts have changed the expectations again by saying that most of </p><p>the online ad players and publishers still have overly optimistic </p><p>full-year earning predictions. </p><p><BR><BR> </p><p>These, Merrill Lynch added, would most likely be cut in coming months </p><p>and would include leading internet players in the market. </p><p><BR><BR> </p><p>In addition to an expected 20 to 30 per cent growth rate during 2002, </p><p>Blodget again predicted a fewer number of stronger players, who he said </p><p>were increasingly using larger ad units. </p><p><BR><BR> </p>