MySpace revenue is set to surge in the coming years, according to a report from Merrill Lynch, reports MediaPost.

Online video will continue to surge and MySpace will become more efficient in selling its ad inventory, writes Merrill analyst Jessica Reif Cohen. "MySpace is already one of the most widely used sites for video downloads on the internet. With online video CPMs often running $40-$60, this could be a meaningful driver in the coming years," she writes.

Another driver for revenue growth, according to Reif Cohen, will be MySpace's ability sell more of its ad inventory directly.

Direct sales accounted for only 10 percent of MySpace's ad inventory in 2006, but she says she expects that number to reach 40 percent by 2009.