A few closely held beliefs have driven the global economy over the past decade. They include: 1) that house prices may fluctuate, but over time they go in one direction – up; and 2) that in the virtual economy, the online advertising and e-commerce markets are young and thriving, and that they too will continue to rise quarter after quarter, year after year.

The first assumption came crashing down on us some time last year, setting off a domino effect of collapsing economies that started in the United States, took out Europe and is now deflating the once promising outlook of much of the developing world, which produces most of the stuff that we buy. After witnessing the bloodbath in the financial markets over the past few months, only the true believers felt the assumptions about the online industry's growth prospects would remain intact, at least for a little while longer.

Alas, new data out this week point to trouble arriving in the dot-com economy even sooner than expected. First, after roughly a dozen years of solid growth, the online advertising market in the United States, the bellwether region for obvious reasons, is certain to slow down over the next two years, according to the Interactive Advertising Bureau. This downward trend was not meant to happen so soon. It's even spooked some analysts to calculate that if growth in the world's most robust online advertising market is beginning to stall, then the global picture is even more bleak – it's set for a year-on-year shortfall, they say. When? Well, it has already begun.

OK, so things look grim no matter where you look and which economic indicators you analyse. We already knew that. But it's Christmas time, the fourth quarter, the time of year we all spend like crazy and lift the economy. Surely the always-steady online retail sector would provide a glimmer of good news amid all the gloom. Right? Wrong. In an equally staggering finding, comScore reported this week that online shopping in the United States has fallen by 4 per cent year-on-year through the first 23 days of November, which it regards as the first three weeks of the online festive shopping season (comScore sales figures/projections are not yet available for the UK or the rest of Europe).

Yes, it is too soon to write off e-Christmas 2008. The most hopeful retailers anticipate consumers this season are merely procrastinating, or that they're being shrewd, hunting around for bargains and waiting for sales to kick in before they make a purchase. Maybe so, but even if there is a late consumer surge, it's more likely that online retailers will struggle just to meet last year's sales figures. That would be some accomplishment in this dismal market, but it probably wouldn't sit well with investors who expect every year to be better than the one prior.

Of course, there is a far greater fallout than sagging share prices. Slow Christmases almost always mean layoffs come January. Worse still, Christmases where sales come in below the prior year mean more dramatic changes: corporate restructurings for the strong, bankruptcies for the weak. And, as many of us recall, when dot-com retailers fail the most immediate impact can be felt in the online advertising market. This is what we witnessed in the great dot-com market implosion of 2000 and 2001.

During that period, the existing players soon rebounded and the advertising market did as well, and that’s what makes this week’s news so unsettling. If the IAB is seeing signs that we are in for two years of declining growth, then this downturn will be much nastier than the last dot-com collapse. Hardly the Christmas cheer we were hoping for from the always-reliable dot-com sector.

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Bernhard Warner, a freelance journalist and media consultant, writes about technology, the internet and media industries. He can be reached at techscribe@gmail.com