Mediaset rides crest of Italian ad boom

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ROME--Thanks to surging advertising sales and a booming economy, Mediaset, Italy's largest advertising outlet, reported record profits of around $430 million in the first six months of the year.

Mediaset owns three of Italy's seven national TV networks and a leading publishing house. It's owned by former prime minister and billionaire media mogul Silvio Berlusconi.

Half-year profits surged more than 20% compared to the year earlier period, mostly on the strength of a 23% rise in ad revenue. A spokeswoman for the group says the rise was due to the combination of an increase in market share for Mediaset companies, rising advertising rates and increased sales due to the country's strong economy.

"Several factors are combining to make this an ideal time for Mediaset in terms of ad sales," the spokeswoman says.

According to ACNielsen, Mediaset's TV ad sales in the first six months were worth $1.26 billion, more than twice those of state broadcaster RAI, which also owns three networks.

"Television ad sales are really driving Mediaset, because of the relative lack of competition in terms of popular programming," says Traj Aquita, a media analyst. Mr. Aquita says Mediaset's three networks, in terms of viewership, have in recent weeks been ranked first, third and fourth among Italy's seven national networks.

But that could soon change. Telemontecarlo, the seventh-ranked network, and the only one not owned by either Mediaset or RAI, was recently acquired by Seat Pagine Gialle, a leading Internet player that is expected to invest heavily in the network to help raise its profile.

Copyright September 2000, Crain Communications Inc.

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