Google Chief Executive Officer Eric Schmidt said Friday he can't predict when the online advertising market will pick up.

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Google Chief Executive Officer Eric Schmidt said he can’t predict when the online advertising market will pick up.

“Global advertising spend seems to be declining,” Schmidt said Friday. “No one really knows what this short-term period ahead of us looks like.”

The credit crisis may cost the online-ad industry $6.7 billion in lost sales through 2010, curbing growth next year to less than 20 percent for the first time since 2002, according to Sandeep Aggarwal, a San Francisco-based analyst with Collins Stewart.

Google, the most popular Internet search engine, relies on ads for almost all of its revenue.

“We are clearly in a (economic) downturn,” Schmidt said. “The situation is much more serious than I had thought.”

Separately, Schmidt said he wouldn’t be surprised if Microsoft sought to derail talks between Google and Verizon Wireless, which is looking for a default search engine for its mobile phones.

“Microsoft has tried to do this before,” he said.

Microsoft is seeking a bigger piece of the online-advertising market. Earlier this year, Yahoo rejected a takeover offer from Microsoft, which said Thursday that it has “moved on.”