Summary:

Given the continued downward spirals in the world’s financial markets, UBS internet analyst Ben Schachter says the firm is lowering price es…

Given the continued downward spirals in the world’s financial markets, UBS internet analyst Ben Schachter says the firm is lowering price estimates for online ad revenues ahead of the Q3 earnings report period. Still, it may be at least a small consolation that offline looks worse and some web-based companies could benefit as more companies look to cheaper and more targeted online ads. In an analyst note (PDF, not online), Schachter said that while the first two months of Q3 “were decent,” September proved difficult.

He sees all companies being negatively impacted to some extent, but continues to believe that Google (NSDQ: GOOG) is relatively better positioned than the others because of its dependence on search, which remains more attractive to marketers than display. In particular, UBS expects Google’s 3Q results will likely be slightly below consensus expectations. Softness in the display ads in Q3 has made UBS take a “cautious” view on 3Q results from Yahoo (NSDQ: YHOO) and ValueClick (NSDQ: VCLK).

Wachovia: Media analyst John Janedis sees total U.S. ad spend slipping 0.8 percent this year and next year, also citing the deteriorating economy. Janedis says what a lot of people have been thinking: things may get worse before they get better. Reuters notes that the Wachovia analyst previously called for growth of 1.2 percent for 2008 and 1.5 percent for 2009. Online has been revised downward as well, with 2009 spending expected to grow 10 percent rather than 15 percent Janedis last called for.

Deutsche Bank: While entertainment companies in general should be able to manage global credit crisis, analyst Doug Mitchelson lowered his estimates and ratings on several companies in the sector. AP reports that Deutsche Bank is now forecasting a recession in the U.S. and Europe going into next year. Mitchelson slashed his ad revenue forecast for entertainment by $502 million to $44.1 billion for 2008 and by $2.36 billion to $42.37 billion in 2009. The entertainment sector derived 29 percent of its revenue from ads in 2008.

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