Despite a slumping U.S. economy and doubt as to whether online advertising can continue its meteoric growth, Lehman Brothers has made some bold forecasts for the industry, including the prediction that video advertising will reach $1.1 billion by the end of this year.

According to Doug Anmuth, an analyst at Lehman Brothers, video advertising should see a 63 percent spike this year, making it one of the hottest sectors in digital, which he believes will reach $45.5 billion by 2012.

As for video, growth is expected to rise on news that ScanScout, a network for in-stream video advertising, and rich media agency PointRoll, have joined forces. Under the deal, PointRoll will be able to expand its array of rich media ad units to ScanScout's brand-safe content network.

According to Forrester, in-stream video in 2007 rose 100 percent with more than 85 billion impressions.