According to an article in today's MediaPost, Borrell Associates' newest local forecast is quite upbeat about geotargeted ad growth across categories, but especially in paid search.
Borrell predicts a 32% increase in local advertising online, to $7.7 billion by 2007. The firm also estimates local paid search will amount to $1.8 billion by next year. By 2010 geotargeted email and paid local search will together represent 50% of online local advertising. And the overall value of the local online ad market will approach $10 billion at the end of that forecast period, according to Borrell.
There's some additional analysis on my blog. We're waiting for a copy of the report and will follow up with additional posts after we get a chance to take a look.