Whoa: Internet Advertising Slow Down?

Isn’t there a theory somewhere that any economic slowdown will shift offline advertising dollars onto online? Well, a report on Silicon Alley Insider suggests that this might not be the case. SAI says that Web MD has issued an earnings warning because of an advertising slowdown:

At least one ad-supported Web company is feeling the pinch from the slowdown: WebMD cut 2008 guidance today in an an earnings pre-announcement “to reflect a recent shift toward shorter term buying commitments in certain of its customers’ consumer advertising purchases.”

Translation: Advertisers are so worried about their own bottom line that they’re avoiding long-term ad commitments, so they can more easily cut their own spending later in the year.

The question is whether this is an industry-wide problem or one unique to WebMD. In a research note, Goldman Sachs says it could be the latter — as advertisers test lower-cost health and beauty sites, as well as ad networks.

Then again, WebMD does make $380m in advertising revenue. What the heck does it do with all that cash?

Internet Ad Slowdown Hits WebMD – Silicon Alley Insider