Piper Jaffray, a Wall Street firm, predicted that internet stocks will outperform the market in 2008 and named Google as one of its top picks.
Needham & Co. another Wall Street firm, predicted e-commerce growth of more than 20%, for 2008 and similar growth rate for online advertising and retail sales.
They also predicted that the growth rate of the Chinese internet market will continue to to double that of the US market.
TNS Media Intelligence, a research firm that tracks ad spending, predicted that display internet advertising, will increase over 14 percent. Although they do not track search spending or online video ads, the strong forecast for display advertising should be good news for Google (GOOG), Yahoo (YHOO), Microsoft (MSFT) and other big online marketing firms.
Several of these firms also forecast more mergers as traditional media companies seek to expand their presence in the digital world.
According to a report by The Jordan, Edmiston Group, released Monday, online media and marketing services deals accounted for two-thirds of media merger transactions in 2007 and 40 percent of the overall value of media deals.