Internet advertising slowed considerably in the fourth quarter in major markets in the United States and Britain, and in some cases stopped completely, The New York Times reported.

The U.S. saw a slight increase from US$6 billion in Internet ad revenue in 2007 to $6.1 billion at the end of last year. Britain saw its online ad revenue growth begin to decrease as well. The trend in declining online ad sales hasn't been seen since the dot-com era bust.

Adam Smith, a director at the media company GroupM, told The New York Times that despite an overall expected growth of 6.7 percent this year, we should not expect anything like the increases in spending of 30 percent that were standard a few years back.

The drop in ad revenue is disappointing to some, who thought the global recession would lead to a shift towards online advertising, whose success and traffic is easier to track.

As Rupert Murdoch pointed out in a speech last week, search advertising on sites such as Google is still profitable. The New York Times article states that "In the second half of 2008, nearly 60 percent of online ad spending went to search engines".

However, other types of ads, such as classifieds and display ads, are seeing a similar decline as "traditional advertising" and facing the same challenge as television and print media, The New York Times reported.