WPP says sales growth slowed in the first five months of the year as business in Western Europe lagged behind other regions. As a result, the stock had its biggest drop in two months. Sales climbed 4.5% compared to 5.2% in growth during the same period last year. Analysts expected growth of 4.9% this year. Advertising spending in Asia, Latin America, Africa and Eastern Europe grew faster than other areas, as soaring energy prices sapped households' purchasing power. "WPP is doing the right things, but the economic climate is unfavorable for advertising companies,'' says Stephen Pope, chief …

Cable channels' upfront advertising sales made much greater gains than ad sales by broadcast networks this year. At the same time, the ratings gap between cable and broadcast--once vast--has been gradually narrowing. While all broadcasters except Fox posted significant ratings declines in the TV season that ended in May, many cable networks are setting new ratings records. Case in point: The premiere of the Disney Channel musical "Camp Rock," attracted 8.9 million viewers Friday night, soundly defeating the broadcast networks. Other factors for the shift of ad revenues to cable are increasing media fragmentation and the …

A Forbes.com and Gartner Study discovered a 37% increase in C-Level and senior executives who choose the Internet as their top source of business information since 2004. The number of execs that go to newspapers for such information is down by about the same percentage over the same period. Among the study's findings: Three-quarters of top executives prefer to access the Web rather than read the newspaper before starting the workday. Also, C-Level executives consume content on the Web more than any other medium, such as TV, radio, magazines or newspapers. "This study further underscores that the C-Level …

In his Default-o-Matic, Silicon Valley consultant and blogger Alan Mutter predicts a newspaper company's risk of default using Moody's Investors ratings, "because not all publishers are in equal danger of going down the drain," he says. Looking at 10 of the largest publishers, he finds the shakiest are the Journal Register, parent of the Trentonian and other small papers, and Morris Publishing, publisher of the Augusta Chronicle and other publications. MediaNews Group and Tribune Co. tie for third place. The good news is The Washington Post Co., which gets most of its money from things other than …

In a telling example of how an idea can migrate from TV to the Internet to the movie theater, the story of a rags-to-riches reality star is moving ahead at Paramount. The project, about the life of opera singer Paul Potts, will be co-produced by "American Idol" judge Simon Cowell. It tells the story of Potts, a mobile-phone salesman, whose operatic performances on last year's "Britain's Got Talent" TV show bowled over the judges, including Cowell, and became a YouTube sensation. Eventually, Potts released an album. Billed as "the ultimate underdog story," the film is expected to …

The San Francisco Chronicle, owned by the Hearst Corp, is losing $1 million a week. On top of long-term changes hurting the newspaper ad industry, the weak economy is severely squeezing ad sales, especially in Florida and California, where the housing slump has cut deeply into real estate ads. Overall, newspaper ad revenue fell almost 8% last year, is falling about 12% this year, and company reports issued last week suggested a 14% to 15% decline in May. The results are sure to be bad, says Peter S. Appert, Goldman Sachs analyst. A number of individual newspapers …

Leonard Downie Jr. will retire in September after 17 years as the top editor of The Washington Post, making way for a generational transition under new publisher, Katharine Weymouth. Downie, 66, has spent more than four decades at the paper and will become a vice president at the Washington Post Company. The Post's weekday circulation is down from 800,000 in 2000 to about 670,000 this year. It has more than 9 million Internet readers a month, trailing only The New York Times and USA Today, but like its peers it hasn't been able to turn that readership into …