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Analysts have mixed views on next year

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Analysts at investment banks have the same dim view of the b-to-b media environment for the remainder of this year as most b-to-b media executives do, but their views are mixed as they look ahead to 2009. The state of the U.S. economy is the wild card, bankers said, and they have varying views on how long the current economic malaise will last. “It will be a pressure cooker for the rest of 2008,” said John Suhler, founding general partner-president of Veronis Suhler Stevenson. But he's not yet ready to put all hope aside for 2009. “I think everyone is talking themselves into a long, slow recovery,” he said, “but I'm not willing to talk myself into a funk for 2009.” Following the 2001-02 downturn, “it turned out to be a fast recovery compared to what people were anticipating,” Suhler said. “In 1991-92, there was a downturn analogous to what we're seeing today, but that was followed by an amazingly long and strong expansion period.” While agreeing with Suhler that b-to-b media came out of the 2001-02 recession “dramatically,” Roland DeSilva, managing partner of media investment bank DeSilva & Phillips, noted the last downturn “was contained compared to what we're seeing today” with high fuel prices, sinking home values and instability in financial institutions. “Print is going to be down in '08, while interactive and digital media continue to garner more dollars. Face-to-face is also showing continued growth,” DeSilva said, adding that custom media has been another highlight for some companies. As for 2009, DeSilva said, “We will be challenged economically. I don't see the end of the down cycle coming soon.” Meanwhile, the movement of marketing dollars into digital media has taken such a dramatic turn that b-to-b publishers that sell only print advertising “are endangering their very viability,” DeSilva said. “Developing digital media offerings and face-to-face conferences and trade shows is vitally important.” Michael Parker, the managing director heading the b-to-b practice at AdMedia Partners, noted that b-to-b media revenue overall declined about 5% in the first quarter. “We may see a dip of another percent or two by the end of the year,” he said. Parker sees 2009 as a “mediocre” year, although he doesn't expect revenue to fall much below this year's. “Revenue will probably be flat,” he said. If there is no change in the price of oil, the war, inflation or the value of the U.S. dollar, though, “it's going to be another down year in 2009,” he said. He added that there are some areas of b-to-b media, particularly online, that have the potential to lift the industry out of the doldrums next year. “Online video is an area where a lot of b-to-b media companies are involved, although not many are making money,” he said. “Video may generate incremental revenue next year as more b-to-b publishers figure out ways to monetize it.”
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