Because of Google's strong first-quarter performance, Merrill Lynch has updated its forecast for online ad spend to 28.7 percent growth in 2006 from its previous forecast of 27.5 percent growth, writes MediaPost. Merrill now predicts that search ad spend will grow 32.7 percent rather than its previous, 31.6 percent growth estimate.

Total U.S. spending for online advertising is now estimated at $16.15 billion in 2006, or 5.5 percent of all ad spend.

Merrill also predicts online branded advertising growth of around 30 percent this year, with branded accounting for some 34 percent of the total online ad spend in 2006.