Judging by the latest IDC data, the Internet will continue growing at a breakneck pace. IDC Sr. Vice President Internet Research Frank Gens predicts that the Net population will reach 147 million this year and leap to 1 billion by 2005.

While this growth is impressive, the subtext is clear: A surge in Internet usage will boost ad inventories to gargantuan proportions. Witness the recent announcements by DoubleClick and AdForce, which now serve 5 billion and 4 billion ads each month, respectively. And last week Excite announced that it now serves 70 million pageviews each day on average.

At this pace, there’s a distinct possibility Excite could be serving 1 billion pageviews each day in six years. While having $20 million a day in inventory to sell is, in and by itself, not an overwhelming task, the sea of inventory will be washing ashore all over the Web.

As anyone who has studied economics knows, the law of supply and demand dictates that if supply growth is unmatched by demand, an inevitable downward pricing pressure will occur. On Tuesday, AdKnowledge noted that CPMs declined for the second year in a row, with the December 1998 average down 6% from $37 to $35.

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