Google’s UK results and other key indicators for the first half of the year confirm that online advertising increased in line with our overall forecast for 2010

We anticipate that deteriorating consumer confidence in H2 2010 will lead to deceleration of advertising growth, including the internet – confirmed by early anecdotal feedback from agencies and ad networks

Our revised forecast for Google’s UK ad revenue is 15% YoY growth in 2010 and 11% YoY growth for UK internet ad spend to £3,800 million

On 2 July News International switched Times online from a free to a subscription service, probably losing at least 90% of its traffic and shifting its strategy from reach and scale to a more traditional targeted brand and loyalty model

The challenges are substantial: while the Times is competitively advantaged with a strong roster of star writers and columnists, NI knows news itself is more commoditised than other content types, and most newspaper and broadcaster sites have been giving away news for a decade

News Corp may well realise the most benefits from the Times subscription service in a larger convergence play, aggregating audiences across group services such as Sky pay-TV and broadband, Sky News and the Wall Street Journal

Launching in the US this autumn, with international rollout due in 2011, Google TV uses enhanced versions of the Android mobile OS and Chrome browser to deliver full access to the internet via ‘Smart TV’ sets and devices

Google TV extends the company’s vision of the open internet to the living room, beyond the PC and mobile, where internet-enabled TV sets will take increasing share, raising search revenues, with potential to take a piece of the $150 billion global TV ad market

Pay TV platform operators’ are unlikely to embrace Google TV to avoid cannibalising their own business models, limiting adoption to free-to-air TV homes, at least initially, and direct revenues are likely to be slow to develop

Microsoft XP has wider significance than most analysts appreciate. While the operating system is, in itself, not a huge advance on existing products - particularly Windows 2000 - its true significance lies in its value as a Trojan Horse for Microsoft .NET. As we indicated in the spring of this year, we think .NET moves Microsoft into direct competition with businesses as diverse as ISPs, mobile network operators and home electronics companies. Widespread adoption of XP makes the eventual success of .NET more secure

Last week Google hit the headlines on the back of forecasts for its UK revenues for 2006 which we expect to reach £920 million, up 90% on 2005, cited as proof of a structural shift away from broadcast media to the internet

The UK newspaper industry is being engulfed by a 'perfect storm'. Overall advertising has been in a cyclical downturn since mid-2005, and public sector recruitment in particular has been weak, while readers desert newspapers (even free ones) for the internet, to which they are drawing spend on classified and display advertising. We view classified advertising in print media as being in permanent decline, anticipating an overall drop from £4 billion in 2006 to £3.5 billion by 2011

Yell UK is the dominant supplier of Classified Advertising Directory Services (CDAS) in the UK. Its principal competitor is BT but, as a natural monopoly, it is regulated, and has just undergone a sector review lifting the price caps currently in place. What does the future now hold for Yell, and more generally for CDAS, which has been the only growth sector in print classified advertising since 2004?

Set for launch in May/June, the BBC’s iPlayer is a PC-based application offering live and on-demand access to around 3,500 hours of BBC programmes per week via the internet, using peer-to-peer (P2P) and multi-cast technology to overcome cost and bandwidth issues

The internet is the UK’s fastest growing advertising medium, with spend rising 41% to £2.02 billion in 2006, and a further 30% rise expected for 2007. Three drivers underpin this growth: more intense use of the internet as broadband connections become standard, very strong growth in e-commerce, which is driving up paid-for search, and improving yields through rich-media formats. These factors will continue to propel growth of internet ad spend in the near future

Broadband penetration and Internet usage in continental European countries are catching up with the US and UK, but consumer e-commerce and internet advertising spend still massively lag behind. Online advertising is growing more rapidly in Germany and France than in the UK, driven by rapid take-up of paid search by advertisers