Now that 2008’s finally closed out, we get a better read on the state of the market in terms of M&A—and Petsky Prunier’s latest Deal Notes report (via ClickZ) shows that the interactive advertising space was hit pretty hard: transactions were down 29 percent from 2007, and investors spent about five times less in 2008 than they did in 2007. Of course, 2007 was the year of the ad network/exchange feeding frenzy: Google (NSDQ: GOOG) bought DoubleClick for $3.1 billion, Microsoft (NSDQ: MSFT) acquired aQuantive for $6 billion and Yahoo (NSDQ: YHOO) paid $680 million for Right Media—so those deals and the economic implosion skewed the results. Still the numbers are worth a look:

SEE ALSO: Tracking The Shift In Media M&A Dollars in 2008

—Deals down sequentially and year-over-year in Q4 : There were 31 deals worth about $436 million in the interactive ad space in Q408—down 18 percent in terms of volume from Q3, and 29 percent in terms of money spent. Year-over-year the stats were worse: transaction volume was down 55 percent from Q407, and dollar value was down 77 percent.

—Overseas interactive agencies were a big draw : Interactive agency deals dominated the M&A activity in Q4, with eight deals worth a total of about $83 million. Interestingly, big ad holding companies focused on shoring up their digital practices overseas: Aegis Group acquired Malaysia-based shop IF, Publicis picked up Brazil-based Tribal, and Microsoft’s Razorfish’s gobbled up Spanish shop WYSIWYG.

Most Active Interactive Advertising Subsegments (click to enlarge):