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Worldwide online advertising spending is set to soar to $11.6 billion, according to a report from Merrill Lynch.

The company said that online ad spending will rise by 35 per cent during 2006, up from a previous estimate of 33 per cent, MediaPost.com reported. By 2007, $14.5 billion is predicted to be spent on international online advertisements, marking growth of 24 per cent.

The People’s Republic of China is expected to see the highest rate of growth in online advertising spending in 2006, with Merill Lynch predicting growth of 50 per cent.

Closer to home, the UK is rated as having the second highest potential for growth in online advertising, with France, Australia and South Korea coming third, fourth and fifth respectively.

Google remains the world’s most popular search engine, said the report, retaining a 70 per cent market share in Italy, Germany and the UK.

The outlook does not look as good for veteran portal Yahoo!, however. The brokerage estimated that its share of worldwide ads would drop from 11 to ten per cent in 2006.