Paid search, which generated an estimated $10 billion globally in 2005, is expected to grow 41 percent in 2006, or more than $14 billion, with market leader Google increasing its lead - and net revenue by more than 58 percent - during the year, according to research notes by Piper Jaffray senior research analyst Safa Rashtchy, reports ClickZ. In 2005, Google held 64 percent market share. Rashtchy also raised the one-year price target for Google's stock from $445 to $600, citing its market dominance and new initiatives such as Google Base.
In his Google research note, Rashtchy forecast a compound annual growth rate of 37 percent over the next five years, for a $33 billion market by the end of 2010.
Rashtchy also predicts that internet sector stocks will bring returns of more than 20 percent in 2006. In 2005, the sector's returns were 12 percent, with search and online advertising the top performers at 23 percent, and advertising services at 18 percent.