Online advertising agency DoubleClick has posted a profit warning after predicting a tough year ahead for the sector.

DoubleClick said that revenues from its media division, which sells advertising over the net, would fall by up to 30% in 2001 due to the absence of search engine AltaVista as a client and a slump in the US economy.

The statement was issued alongside fourth quarter earnings figures, which showed a profit of £144,000 against a loss of £1.19m for the same period last year.

Kevin Ryan, chief executive of the globe-spanning group, said that DoubleClick's £585m cash pile and innovative Dart advertising monitoring technology would see it through the rocky patch ahead.

"I am very proud of how well our organisation executed in a tough industry environment," he said. "Our strong balance sheet and relentless focus on productivity position us very well going into 2001."

DoubleClick remains bullish about its long-term prospects, confident that the internet's share of the advertising market can only improve and its technology business will continue to boost income.

Stephen Collins, chief financial officer of DoubleClick, said: "Today, by some estimates, 2% of media spending goes to the internet while 9% of people's media time is spent on the internet.

"We believe these figures will inevitably converge, as they have in virtually every other type of media over time.

"At the end of the day, this is the most fundamental argument as to why internet advertising will be a fast growing, large segment of worldwide media spend for years to come."

However, the company's announcement is the latest in a series of blows to rain down on the advertising sector over the last few days.

US internet giant Yahoo! issued a profit warning on Wednesday after experiencing a slowdown in advertising growth, and yesterday it was revealed that spending by the UK's top 30 advertisers fell by £64m last year.

Advertising trends are a bellwether for the media sector, as they provide a significant slice of companies' income. Analysts will be keeping a very close eye US media giant Viacom, owner of MTV and CBS, which relies heavily on advertising for its income.

Advertising has been hit by a downturn in the US economy and spending cutbacks at cash-strapped dotcom startups.

Nervous media companies are hoping that a 0.5% cut in US interest rates will be enough to kickstart the economy and revive revenues, although the effects of the move will not filter through for another six months.