Spending on online advertising in America rocketed to £2.6bn in the first six months of this year - its highest level since the dotcom boom of the late 1990s.

US spending on internet advertising soared 43% to a record £1.32bn in the three months to June, according to the latest survey from the Interactive Advertising Bureau and the accountancy firm Pricewaterhouse Coopers.

The study said the growth in online advertising spend was being increasingly fuelled by major brands deciding to switch budgets away from TV and newspapers to the internet.

"Internet advertising is without question taking share from the other media at this time and for good reason - marketers have figured out that online advertising is often the most cost-effective medium for influencing both branding and sales results," said Greg Stuart, president of the IAB.

The latest online figures come just a day after the New York Times, one of the US's leading newspapers, issued a profits warning after weaker than expected advertising sales for September.

The warning from the New York Times follows similar warnings from local newspaper group Knight Ridder and Dow Jones, which owns the Wall Street Journal.

The study mentioned several major advertisers that increased online budgets for the year, including Ford, which is allocating 25% of its spend for the Lincoln Mercury division online.

Figures for UK online spending will not be released until October 22, but are expected to show a similar growth rate.

"We don't yet have a clear picture but we are confident that the online advertising market will carry on growing," said an IAB insider.

Paid search ads, where brands bid for search terms on such services as Google, where their ads are displayed alongside search listings, retained its hold on online advertisers.

Advertisers spent £530m on search-related ads, or 40% of the total, up from 29% in the first quarter.

"Not surprisingly, search continues its popularity, and it's been embraced by advertisers due to its innate relevancy, the simplicity of the results, and because advertisers can determine more precise response rates," said Pete Petrusky, PricewaterhouseCoopers director of new media.

Online display advertising, which includes banners and pop-ups grew by 20% to £264m, while spending on online classifieds increased by 17% to £225m.

In the run up to the dotcom crash in 2000, internet ad revenues were experienced double and triple-digit growth, fuelled by over-optimistic hopes that the internet would lead to a new one-to-one relationship between advertisers and customers.

Four years on, the online industry has rebuilt its revenue model focusing particularly in search but is also experimenting with other formats.