"Conversations with online media buyers and companies suggest that although overall demand is still soft, pricing has stabilized at the leading sites, which we regard as encouraging," Blodget said in a research note.
He added that media buyers have also indicated online advertising picked up slightly this month over January.
A number of Internet companies from Yahoo to CMGI had their stocks hit, as they projected a slowdown in advertising revenue for the year.
AOL Time Warner, however, may buck the industry trend and post an advertising revenue increase in the first quarter compared with the previous quarter, Blodget said. And while Yahoo is expected to post a 25 percent sequential revenue drop in the first quarter, Blodget said it's unlikely the company will lose market share to other Web sites.
He added that DoubleClick and GoTo.com may also warrant a look by risk-tolerant investors.
"We...continue to believe that the (first quarter) weakness is already in the stocks and that the environment will get better, not worse, throughout the year," Blodget said. "We therefore believe that this is a good time for risk-tolerant investors to look at a few select online media names."
Yahoo gained $3.25, or about 11 percent, to $31.75 in late morning trading. And AOL received a minor bump by $1.38, or about 3 percent, to $49.91. DoubleClick and GoTo.com, however, posted slight declines. DoubleClick fell by 6 cents, or less than 1 percent, to $14.13, and GoTo.com declined by 25 cents, or about 2 percent, to $10.69.
Although Blodget believes the online advertising market will be flat this year over the previous year, he noted he may cut his projection if the economy fails to recover in the second half of the year.