April 22, 2008 U.S. Interactive Classified and Vertical Advertising Revenues to Reach US$14.7 Billion by 2012, According to The Kelsey Group Online media execs will gather in Seattle next week to examine the role of classifieds and verticals in local advertising at ‘Drilling Down on Local ’08: Marketplaces’ Princeton, NJ (April 22, 2008) -- While online advertising has been propelled primarily by search, banners, e-mail and lead generation, The Kelsey Group expects verticals to emerge as a key driver of online advertising by 2012. Based on trend analysis, the firm forecasts the U.S. interactive classified and vertical share of online advertising will grow from 18 percent in 2007 to 24 percent by 2012. Revenues for interactive classifieds and verticals will grow from US$3.9 billion to US$14.7 billion during the same forecast period, representing a 30.5 percent compound annual growth rate (CAGR). “Vertical businesses are harnessing the network effects of the Internet, much like Expedia and others did for travel in the late 1990s,” said Kelsey Group Program Director Peter Krasilovsky, cochair of Drilling Down on Local ’08. “We’re seeing an accelerated effect from fragmentation, which will draw ad revenue from traditional media toward online vertically targeted solutions.” During the forecast period, U.S. online classifieds will grow from US$3.9 billion to US$9.1 billion (18.6 percent CAGR) and online verticals (such as home services, home and garden, health care, legal and auto repair) will grow from US$100 million to US$5.6 billion (461.4 percent CAGR). The growth of online classifieds and verticals is the subject of The Kelsey Group’s “Drilling Down on Local ’08: Marketplaces” conference, which takes place next week, April 30-May 2, in Seattle, Washington. More than 500 senior executives from across the online media industry will come together to explore the implications of the emerging vertical trend on local advertising. Among the nearly 200 companies participating are AutoTrader.com, Cars.com, Cox Enterprises, Fox Interactive Media, HealthCare.com, Hearst, LATimes.com, MapQuest, Microsoft, MMB Media, Mywedding.com, The Seattle Times Co., Spot Runner, Trulia, TurnHere, Verizon, Ward’s Automotive, Yahoo!, Yellow Book USA, Yellow Pages Group, Yelp!, Zillow.com and Zvents. About Drilling Down on Local ’08 Drilling Down on Local ’08 is The Kelsey Group’s 16th conference since 1998 devoted to interactive local media and local online commerce. Detailed information about the conference program, speakers and companies attending is available at http://www.kelseygroup.com/drillingdown2008. Conference sponsors include Acxiom, AdReady, AgendiZe, Amdocs, Apptus, BIA Financial Network, Call Genie, Hawthorne Executive Search, Homes.com, iBegin, Lat49, Local Matters, Local.com, Localeze, Marchex, Matchcraft, MediaTraks, Mixpo, Moon Valley Software, Oodle, Orange Soda, SpotMixer and Topix. Association partners include Association of Directory Marketing (ADM), Association of Directory Publishers (ADP), International Classified Media Association (ICMA) and Yellow Pages Association (YPA). Media sponsors are LatinVision Media and TVover.net. About The Kelsey Group The Kelsey Group is the leading provider of research, data and strategic analysis on directories, small-business advertising, online local media, vertical market advertising and mobile advertising. Founded in 1986, the company has built a reputation as the premier analyst firm covering the directory publishing community and the emerging local search marketplace, providing advisory services (The Kelsey Report®, Interactive Local Media and Marketplaces), publishing (Global Yellow Pages™), consulting (more than 400 individual assignments) and conferences (72 events). For more information contact: Eileen Pacheco eileen@tango-group.com (781) 556-1026