Online Video Ad Spending Growth to Slow, but Stay in Double Digits

Itblog-pic-1 appears that 2009 will be another stellar growth year for online video ad spending, although not quite up to the levels reached in 2008 or what is predicted for 2010, according to projections from AccuStream iMedia Research (http://www.accustreamresearch.com/) reported recently by eMarketer.com (http://www.emarketer.com/Article.aspx?id=1006896)

AccuStream is predicting online video ad spending will grow by “only” 22.5 percent in 2009, down from the 2008 growth rate of 36 percent (and spending of $2.1 billion). Growth totals for 2010 are projected to climb back to 28.2 percent in 2010, according to AccuStream. While the dip for 2009 is substantial, that’s only as compared to 2008. No doubt a growth rate of more than 20 percent would be welcomed in most any other business sector.

Double digit growth is wonderful news for large players in the online video business such as Cambridge, MA-based Akamai Technologies (Nasdaq: AKAM, http://www.akamai.com/) but perhaps more important for smallcaps focused more singularly on streaming video such as Clifton Park, NY-based On2 Technologies (Amex: ONT, http://www.on2.com) and Plano, TX-based ViewCast (OTC BB: VCST, http://www.viewcast.com). Both ViewCast and On2 are currently trading at about 40 cents, although ViewCast is closer to its 52-week high of 54 cents while On2 has been very volatile, trading as high as $1.11 in the past year (52-week range 11 cents to $1.18).  It is also an up-vector for content-rich providers like NYC- and Dubai-based KIT Digital Inc (EBB:KITD, http://www.kit-digital.com), whose $0.17 stock hit a yearly high of $0.49 some time back.

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