ChasNote

Excerpt from today’s NY Times:

Online advertising in the United States is expected to increase 28.5 percent this year, according to eMarketer, a research firm. AOL’s ad revenue increased 16 percent in the last quarter after gaining 40 percent in the previous quarter. Revenue at Yahoo, the No. 1 Internet portal, rose 8 percent in the latest quarter.

Part of the challenge for portals is that people are starting to approach the Internet in a different way. A new generation of Web users has grown increasingly adept at finding what it wants online and is less reliant on portals for guidance. What is more, younger audiences are spending more time on social networking sites and less time on traditional Internet portals.

“Just like Yahoo, AOL is fighting MySpace, Facebook and others for audience and ad dollars, and those are tough competitors,” said Jordan Rohan, an analyst with RBC Capital Markets.

Social networking sites are not the only culprits. Thousands of smaller Web sites, like blogs, news collectors and niche content sites, are also attracting growing numbers of Internet users and advertisers.