Ad holding company WPP Group posted higher 2007 earnings, as net income rose 6.9 percent to 465.9 million pounds ($925.8 million)  from 435.8 million pounds the year before. Revenues came in at £6.1 billion ($12.2 billion), up about 3.4 percent from 2006’s £5.9 billion. Also, WPP’s billings were up 5.1 percent at £31.7 billion ($63.5 billion). The London-based company also outlined some reasons for “cautious optimism” this year, citing the spending related to the summer Olympics, the UEFA Euro 2008 soccer tournament and U.S. national political races.

All in all, WPP CEO Sir Martin Sorrell said he expects ad industry growth to hover around 5- to 6 percent in 2008. But the company did say that the ad industry would probably not be able to avoid an ad slowdown in 2009. Separately, WPP announced the upping of its unspecified minority stake in Middle East ad holding company Team Y&R to an undisclosed majority stake. WPP completed 37 acquisitions this past year and again reiterated its emphasis on digital-related purchases with a particular concentration in developing markets. Overall, WPP spent £579 million ($1.15 billion) in cash on acquisitions last year, the largest of which was $649 million for 24/7 Real Media last May.

—WPP highlighted the boost that its digital acquisitions provided to the company: “Media investment management” continued to show the strongest growth of all its communications services, with revenues in rising over 14 percent, thanks mostly to direct, internet and interactive. Direct and digitally-related activities now account for over 23 percent of the group’s revenues are running at the rate of over $12 billion a year.

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—Reuters: Sorrell, who coined the term “frenemy” to describe the relationship the ad industry has with Google (NSDQ: GOOG), said he hopes that Microsoft’s (NSDQ: MSFT) proposed $41.4 billion bid for Yahoo (NSDQ: YHOO) comes to fruition, arguing that the merger would provide a greater degree of balance for to the online search market. The merger will likely go through, Sorrell said, though whether Microsoft would be able to manage Yahoo effectively remains an open question.