Monday, March 31, 2008

A Volatile Market

The media industry used to be a place of reasonably steady returns. The old independent companies in the UK all knew their place and managed to grow their business by a steady single digit figure most years. Seeing the amalgamation of those companies, ITV plc (ITV.L) losing 7% of its value in a morning is sobering.

In the US, the situation is not so different, Comcast (CMCSA) and TimeWarner (TWX) shares have long languished.

And even the new player such as Narrowstep (NRWS) and Roo (RGRP) have seriously suffered, despite sales of competitors such as theplatform (by Comcast) and Maven (by Yahoo) for valuations up to twenty times the market cap of these companies.

Investors, it seems, have fallen out of love with the media sector. Part of this is a hangover from the dot com crash and part of it is uncertainty about the future. But whatever the reason, there is a distinct lack of confidence in the media sector overall. Even the biggest darling of them all, Google (GOOG) seems to have become a victim of this dismay.

What will it take for the sector to recover ?

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