Internet Ad Revenue at $1.47 Billion According To IAB/PwC Estimate For Q3 2002; Nine of Top Fifteen -60%- Online Ad Sellers Average 66% Year-Over-Year Increase in Revenue

Business Wire, Dec 19, 2002

Business Editors/Internet Writers

NEW YORK--(BUSINESS WIRE)--Dec. 19, 2002

Internet advertising revenue in the United States totaled $1.47 billion for the third quarter of 2002, advancing 1% from the second quarter of 2002, and the first signal of positive growth for the overall online advertising industry in six quarters.

Revenue for Q3 2002 as compared to Q3 2001 was down 18%, an improvement when compared to the 21.9% decline for Q2 2002 against Q2 2001. The Interactive Advertising Bureau (IAB) sponsors the Internet Ad Revenue Report, which is conducted independently by the New Media Group of PricewaterhouseCoopers (PwC).

In compiling the report, PricewaterhouseCoopers reports the first and third quarters of each current year as estimates, based on compiling data from the top 15 online ad sellers, which historically account for over 80 percent of total industry revenues. The results of this revenue compilation are then extrapolated to calculate the total industry revenue figure. These estimates are subsequently adjusted and included in the second and fourth quarter actual revenue reports. Signaling an uptick in online revenue, nine of the top fifteen companies selling interactive advertising experienced year-over-year revenue growth averaging 66% for Q3 2002 over Q3 2001, that according to PwC.

"While we are reporting a modest gain, quarter to quarter, the reality is that the growth in the interactive advertising sector, as demonstrated by the top 15 sellers, is much stronger than is reflected in this report," said Greg Stuart, President & CEO of the IAB. "We know that there are more companies out there with positive growth. However, since this report is a reflection on the industry as a whole, not simply a few sites, the compilations account for all players in the field. I have no doubt that as this situation turns around, our industry numbers will reflect greater growth numbers, but until that happens, we should all understand that the interactive ad industry has been steadily increasing revenues for the last few quarters, and is on track to continue that growth along with other ad sectors."

"The return to positive growth in both online and offline media is a healthy sign for the overall advertising industry, but should be viewed cautiously, as we believe that the positive steps that are being taken are as much cost-driven as they are recovery oriented," said Tom Hyland, Chair PricewaterhouseCoopers New Media Group. "Add to that the historically stronger performance of the fourth quarter, and it appears interactive advertising may end the year with two consecutive growth quarters."

Conducted by the New Media Group of PricewaterhouseCoopers on an ongoing basis, with estimates issued for the first and third quarters and full results released following the second and fourth quarters, the "Internet Advertising Revenue Report" was started by the IAB in 1996, and represents data from all companies that sell meaningful online advertising revenues. The results reported are the most accurate measurement of online advertising revenues because the data is compiled directly from information supplied by companies selling online advertising. All-encompassing in nature, the survey includes data concerning online advertising revenues from Web sites, commercial online services, free e-mail providers and all other companies selling online advertising.

About PwC

PricewaterhouseCoopers (www.pwcglobal.com), the world's largest professional services organization, helps its clients build value, manage risk and improve their performance. The PricewaterhouseCoopers New Media Group -- with offices in New York, Los Angeles, Seattle, San Francisco Bay Area and Boston -- combines content and technology specialists to provide comprehensive service to dynamic entrepreneurial companies. Services include business assurance services, ad delivery and privacy attestation and advisory services, assistance with mergers and acquisitions, tax planning and compliance, capital structuring and employee benefits and executive compensation packages.

About the IAB

Founded in 1996, the Interactive Advertising Bureau (IAB) is the leading interactive advertising association and represents companies responsible for selling over 75% of online advertising in the United States, including: AOL, CNET Networks Inc., MSN, Overture Services, Walt Disney Internet Group, Yahoo and 100 others. Its activities include evaluating and recommending standards and practices, fielding research to document the effectiveness of the interactive medium and educating the advertising industry about the use of interactive advertising. Membership includes companies that are actively engaged in, and support the sale of interactive advertising.