Paid Search is predicted to generate more than $14 billion globally in 2006, enjoying an increase of 41% from the estimated $10 billion that it made in 2005, according to a new report from Piper Jaffray.
Leading the way in the paid search arena is Google, expected to grow its net revenues by more than 58% during the year, outpacing the market as a whole.
Commenting on the predictions, Safa Rashtchy, senior research analyst at Piper Jaffray said: “Over the next five years we estimate the paid search engine will grow at a 37% compound annual growth rate (CAGR) to more than $33 billion in 2010.”
Rashtchy continued: “We expect Google to capture the lion’s share of that revenue and grow faster than the market as a whole.”
The new Internet Industry Report, forecasts stocks in the internet sector to bring returns of over 20% for 2006, exceeding the 12% seen in 2005.
Within the online sector, search and online advertising are expected to perform the best, with search expected to be up by 23% for the year and advertising services by 18%.
The strong performance expected from Google is forecast to be a factor in the overall growth of the industry, with Rashtchy explaining: “Google is pushing the industry to expand its offerings and create better versions of existing applications, creating a much more dynamic industry where innovation is pushing forward at a much faster speed than the past few years.”
He added: “The mere competition with Google, to keep up service levels, is benefiting the customers and causing companies to improve their offerings significantly.”
Paid Search’s strong growth over the next year is confirmed in an earlier study from JupiterResearch projecting paid content searching to reach $8.9 billion in 2010 (see Paid Search To Hit $8.9 Billion In 2010).
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