Blogging may not pay, but more and more entrepreneurs are attempting to make a living blogging or selling stuff on eBay, and they’re spending a substantial amount on interactive advertising while doing so.

But now a debate is beginning on whether or not state or federal regulations for online advertising are necessary. These regulations could hurt small online businesses, according to IAB chief Randall Rothenberg, who will testify before the House Small Business Committee this week.

“Millions of people are making their livings creating and operating web venues that house well-targeted advertisements, but these entrepreneurs are being threatened by the specter of unnecessary government regulation that would destroy or severely limit their ability to advertise their wares and services online,” Rothenberg said in a statement.

Of paramount concern to the IAB is a bill before the New York State Legislature that would regulate third-party ad networks. Similar bills have also come up in Connecticut and Massachusetts

While privacy has been a hot-button issue for years, legislators are now turning their attention to advertising, spurred in part by the Yahoo/Google deal, which many publishers support.

Small businesses have more than doubled the share of ad spending on search engines than large or medium companies, according to the IAB.