In another sign that traditional media is losing market share to the Internet, a new study finds that U.S. online ad sales are expected to overtake newspaper advertising by 2011.

In its annual study of the media sector, media investment firm Veronis Suhler Stevenson projects that online advertising will reach $62 billion by 2011, $2 billion larger than the forecast for newspaper advertising in the same year.

Leading national advertisers have accelerated their diversion of dollars from traditional print and broadcast media to alternative digital platforms to combat media and audience fragmentation, increased consumer control and multitasking, and the growing impact of advanced technology on conventional media models, said James Rutherfurd, managing director at VSS.

The survey also measured the time spent on different media. In a first, more people will spend time online in 2007 than they will reading newspapers.

In 2006, media usage declined half a percentage point to 3,530 hours. People generally watched television for 30 minutes per session but spent as little as five to seven minutes in watching user-generated video clips online.

VSS expects media usage to stabilize in 2007 and increase slightly through 2011.

The study also found that use of media in the workplace increased 3.2 per cent to 260 hours per employee per year.

Spending on media for the institutional sector – which includes business, education and government – was the was the fastest-growing sector from 2001 to 2006 expanding

Institutional spending, which includes spending by business, education and government spending on information and media, is also increasing, expanding at a compounded annual growth rate of 8.1 per cent in 2006 to $227billion.