Currently, the Internet ventures controlled by Mr. Berlusconi are spread among Fininvest, leading Italian private broadcaster Mediaset and a smaller holding company called Mediadigit.
Though the plan so far lacks details, Mediaset Chief Financial Officer Marco Giordani announced that the different firms would likely be combined in an effort to sustain growth as advertising sales slow due to a slowdown in the overall growth of the Internet sector. Fininvest had previously been vague about its plans for all the different Internet ventures.
"The first step would be a possible merger between Mediadigit and Jumpy," Mr. Giordani says, referring to the Mediaset owned search engine and portal Jumpy.it.
Mediaset owns only 0.5% of Jumpy. Most of the rest of Jumpy is owned by Fininvest, which also controls Mediaset. Analysts have long criticized the companies for a lack of a cohesive and integrated Internet strategy.
Though it is unclear exactly how the mergers will be carried out -- Mr. Giordani didn't give a timetable about when they would be completed -- analysts say it was clear that a shakeup was in the works.
"Mediaset has been eager to sell its content to Jumpy and other Internet companies and a more simple setup among the different Fininvest holdings may help facilitate that," says media analyst Enrico di Tommasi. "Selling content is an important revenue source independent of ad sales."
If it works out, it could help offset a slow-down in revenue, which is expected to rise around 14% this year and only 8% next year, despite an expected upturn near the end of 2001 to publicize the arrival of the euro, which will go into use in January 2002.
The slowdown next year is in line with a general slowing of the Italian market. ACNielsen is forecasting a 9% rise in total advertising spending next year, with just an 8% increase for the television market.
Copyright November 2000, Crain Communications Inc.