Online Ads, Google Face Tough '09

The sharp knives are out this week for 2009 online ad spending, and stocks won't be immune.

Google will be hurt by slower online advertising, starting with tighter purse strings at Priceline, Expedia, eBay and Amazon.com, the top four online advertisers. That's according to Citigroup analysts who say search engine marketers "almost universally" expect the fourth quarter to be "the weakest they have ever experienced." Citi now predicts quarterly spending will slow from an average of 25 percent year-over-year growth to just 8 percent, and Google will be impacted "at some level." That's after J.P. Morgan's Imran Khan said earlier this week that total U.S. display ad spending will grow just six percent in 2009, well below his earlier 16 percent forecast.

Gawker Media's Nick Denton is among the pessimists, arguing media companies should already be pulling in the oars ahead of what will probably be a terrible year to come . His gloomy outlook, which includes predictions for a decline in advertising spending care of a deeper-than-expected recession, is here.

Even the one bright spot for ad spending is sort of a downer. According to Peter Kafka, it's Dr. Horrible.