Internet advertising is an extremely lucrative industry and a chief revenue stream for search engines such as Google and Yahoo. Excluding video content, internet advertisements are divided into two chief categories: display ads, which appear as a pop-up or a banner on a web page, and paid search, which are text ads that appear when keywords are typed into a search engine. Due to their growth and success, it is becoming increasingly important to understand the mechanics and implications of online advertising. The objective of this project is to investigate the following questions on internet advertising: how do the users respond to internet ads? To what degree are consumers more likely to proceed to an advertiser?s website if exposed to an ad? These questions are extremely important to companies who spend a significant part of their marketing budget on internet advertising.