IP Democracy: The Rise of Web 2.0 Holds Back Old Media Stocks

The recent spate of amazing deals and complex jockeying by top communications and entertainment giants has done little to boost the stock of old media vanguards such as News Corp. and Time Warner. Even Comcast, the nation’s top cable operator and a consistent financial success, is stuck in the stock doldrums. Why? The answer is Google and Yahoo.

As this New York Times’ piece by Geraldine Fabrikant and Richard Siklos makes clear, investors know something big is happening on the Internet that changes all the old media valuation equations, but they’re not quite certain what it is, so stocks languish.

“There is a buyers’ strike,” said Dennis Leibowitz, general partner at Act II Partners, a media hedge fund. “People are afraid to touch the old media. No matter how cheap they have gotten, people are fleeing. The environment is scaring them, and they can’t figure it out.”

Posted by Cynthia Brumfield on November 3, 2005 7:06 AM to IP Democracy