NEW MEDIA: SPOTLIGHT ON: CONVERGENCE - Media giants' changing of the guard stresses the old values - Does restructuring mean a cull of uneconomic online content?

"The new economy is dead. It's back to the old values now. You can say that again. The quote, in a recent article in the Financial Times about upheaval at Bertelsmann following the dismissal of its chief executive, Thomas Middelhoff, should by rights become one of the media quotes of the year. It probably won't, regrettably, for the simple reason that the person who said it didn't want to be identified - but you can take it as read that he was and is an influential member of the new, post-Middelhoff regime.

His world-view was every bit as quaint as it was unsettling. One minute Bertelsmann is Europe's main player in the high stakes, hi-tech global media game - and the next it's emphasising that it's basically still the same old family owned publisher of bibles based in the sleepy Rhur town of Gutersloh since 1835.

But do not adjust your set - Bertelsmann hasn't been the only media giant with vision problems. A month before Herr Middelhoff shuffled off, Jean-Marie Messier was ousted from the top job at Vivendi Universal and at the start of August, Adam Singer, the chief executive of Telewest, resigned.

Ostensibly, the common factor here is spending lots of money and getting into huge amounts of debt in attempting to build vainglorious empires that now fail to add up to the sum of their parts.

But it goes without saying that new media is an important battleground in all of this. The events of this summer arguably have profound implications for the digital arena and, indeed, for the notion of convergence. Singer's departure seems telling because he was a man who felt comfortable with the big picture and saw the future in terms of marrying digital distribution with desirable content. The man who has replaced him was previously the company's finance director and there is the possibility that he will view Telewest as a telecoms utility outfit and see his job as optimising margins.

Events at Telewest are nothing compared with the deckchair rearranging at the world's biggest media conglomerate, AOL Time Warner. Two years ago, when AOL first offered to buy Time Warner, it did so on the basis of a hugely inflated dotcom-era share price - and executives at Time Warner seemed grateful that one of the new masters of the universe had taken pity on then. Now there's no doubt whatsoever about which bit is the dog and which is the tail. To cap it all, it emerges that AOL's accounting practices are under investigation. Last week it appointed a new chairman and chief executive, Jonathan Miller, in an attempt to restore confidence.

We shall see. But is the re-establishment of the old guard and old values potentially worrying? Or will the prospect of going back to the future actually reassure many advertisers? Steve King, the chief executive of Zenith Optimedia Group Europe, argues that the "new economy is dead quote is primarily about business models rather than technological possibilities.

The big names that bit the dust this summer did so because, in the context of a bleak economic and financial outlook, their ambitious expansion strategies were exposed as outrageous gambles.

King says: "The goal has been to generate cross-platform expertise and develop a relationship with consumers across several media. But I'm not sure how successful some of these companies have been at integrating these various strands. The evidence points to the fact that people still buy media on the basis of individual brands - they do not regard a big media company as the only supermarket they can shop in. So, with the possible exception of Murdoch, who has continued to deliver things to customers they wouldn't be able to get elsewhere, there's been a difficulty in delivering the promise."

Rob Norman, the chief executive of Outrider, agrees entirely. What we could be seeing now is stage two of a shakeout that began with the bursting of the dotcom bubble. Back then, we saw e-commerce companies, content and business models falling by the wayside. Thus the non-academic parts of the web were dominated by online publishers. Now we may be seeing the start of a grand cull of content.

"We're seeing the need to evaluate every single piece of online content against whether it contributes either directly or indirectly to revenues, Norman says. "Consumers have had a free ride for too long and the truth is that a lot of people don't give a monkey's about much of the stuff available online - 99 per cent of traffic goes to less than 1 per cent of what's available. So there could be a huge amount of stuff disappearing.

From an advertiser point of view that's okay because they tend to use less than a tenth of 1 per cent of all available space on the totality of the web. But the fear is that the old becomes so much in charge of the new that the ability to evaluate innovative business models will disappear along with the content."

According to King, however, convergence remains firmly on the agenda over the long term. He says: "A lot of media companies are relieved that convergence is apparently not moving forward. Convergence is about building broader and more complex relationships with your customers and for a traditional newspaper company, say, that might appear a tough challenge. But in the US, while there's undoubtedly a move toward more conservative business models, convergence is not dead by any means. From an advertising point of view, convergence gives more accountability and it is a big issue with advertisers and, for instance, on media pitches. The people who can do it in the new climate will prosper. The traditional companies who think it will go away are mistaken."

I-RECALL: DOTCOM WEEKLY AWARENESS SURVEY
Rnk  Site            Agency/Media           Adspend            Awareness
                                            Jan-March          (%)
1    BT              AMV BBDO/Zenith Media  £31,980,000  83
2    Teletext        DLKW/
                     Manning Gottlieb OMD   £439,000     61
3    Siemens         J. Walter Thompson/
                     Optimedia              £1,184,000   50
4    Lastminute.com  In-house               n/s                49
5=   Dell            Cdp-travissully/Carat  £2,336,000   42
5=   Intelligent
     Finance         Union/BLM Media        £586,000     42
7=   Amazon          Wieden & Kennedy/
                     OMD UK                 £430,000     38
7=   Jamjar          MWO/MediaCom           £983,000     38
9    Lycos           Leagas Delaney/BBJ     £14,000      36
10   Jungle          McCann-Erickson/
                     Info Associated        £8,000       22
11   Ebookers        Conrad Advertising     £130,000     15
12   Expedia         Euro RSCG/
                     Media Planning Group   £566,000     14
13   Eclipse         Bates UK/Walker Media  £188,000     12
14   Bluesquare      In-house/MindShare     £71,000      8
15   Opodo           Leagas Delaney/Carat   £608,000     6
Source: Taylor Nelson Sofres PhoneBus, tel: 0800 0183618. Advertising
spend figures by AC Nielsen MMS: 01763 248828.
The survey was conducted over the weekend of 10-11 August based on a
representative sample of around 1,000 adults.
The companies included in the PhoneBus are a combination of those that
have achieved high awareness scores for their offline advertising in
previous weeks and those launching new, high-profile offline ad
campaigns.

WEB WATCH: FINANCIAL SITES
Rank   Site                     Address           Latest monthly page
                                                  impressions (millions)
1      FT.com                   ft.com            *55.6
2      Wall Street Journal      wsj.com           40.5
3      Adv. Financial Network   advfn.com         36.5
4      Ample                    ample.com         21.0
5      Motley Fool              fool.co.uk        18.0
6      Hemscott.net             hemscott.net      13.8
7      The Economist            economist.com     12.9
8      MX MoneyeXtra            moneyextra.com    8.5
9      Sharepages.com           sharepages.com    5.2
10     E*Trade                  etrade.co.uk      5.0
These are unaudited figures taken from publishers unless stated. The
data used in this table is supplied by BRAD: www.intellagencia.com. Tel:
(020) 7505 8458.
For a free listing in the New Media section of BRAD, call (020) 7505
8254.
*Figures from ABC Electronic.

There isn't much change in this month's table compared with June. There is some movement as far as page impressions are concerned but the positioning of sites remains largely unaltered. Financial Times holds on to top spot, followed by The Wall Street Journal. Advanced Financial Network has seen a small increase in hits, while Ample remains fourth despite dropping 5.5 million hits. Impressions for the Motley Fool have increased to 18 million. E*Trade is a new entry at ten with five million hits.

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