Clickz writer Kevin Newcomb has a fact-filled article summarizing numbers and estimates from two new Piper Jaffray notes about the Internet and paid search in 2006. Both notes were written by Safa Rashtchy at PJ.
Paid search is expected to generate more than $14 billion globally in 2006, with Google leading in growth and market share, according to a new Piper Jaffray report.
+ Paid search expected to grow expected to grow 41 percent in 2006 and 31 percent in 2007.
+ Google captured as much as 64 percent of the market in 2005 according to Rashtchy.
“Over the next five years, we estimate the paid search industry will grow at a 37-percent CAGR [compound annual growth rate] to more than $33 billion in 2010, and we expect Google to capture the lion’s share of that revenue and grow faster than the market as a whole,” Rashtchy wrote in the Google research note.
+ As we posted earlier this week, Rashtchy has raised his price target for Google to $600/share.
+ The full text of Safa’s Google note is available online via Searchblog (PDF).
Newcomb’s Clickz article goes on to report key findings from another Piper Jaffray report that focuses on the Internet as a whole.
In the Internet Industry report, Rashtchy predicts that stocks in the Internet sector will bring returns over 20 percent for 2006, exceeding the 12-percent return of 2005. Within the sector, search and online advertising performed best, increasing by 23 percent for the year, and advertising services were up 18 percent.
+ Rashtchy adds:
“The mere competition with Google, to keep up the service levels, is benefiting the customers and causing companies to improve their offerings significantly.”