Sensis, News Digital and Fairfax Digital were hit hard by a faltering online ad market in January, according to SMI figures obtained by AdNews. There are mixed signals at present from the major online publishers about the current state of the online display market.

SMI’s January data shows Sensis’ display revenues were down 44% this year over January 2010, News Digital Media slumped 21% and Fairfax Digital declined 3%. Yahoo!7, meanwhile, was up 27% and Ninemsn increased its display revenues 18%. SMI figures capture actual spending from media buyers and overall online advertising – including search, social media sites and performance networks - was up 15% in January.

Although some media buyers and major online publishers say February is looking tougher that January’s surprise hit, at least one major online publisher says it is expecting some growth.

“The market does seem to be polarising,” said the executive, who did not want to be named. “Bookings are getting a bit shorter now so it is reducing our clarity [on forward demand] but February is not looking too bad for us.”

And in other developments, the rapidly retreating local operation of News Corp’s MySpace is understood to be negotiating for News Digital Media to takeover ad sales for the site although final details are still unclear.

Less than two years ago MySpace was writing close to $20 million in ad revenues in Australia but advertising demand for the site has since collapsed. Industry observers say Facebook has more than offset MySpace’s decline with some estimating its Australian ad revenues to be approaching $30 million.