• by Michael Shields , January 5, 2005

In another encouraging post-mortem for the media marketplace in 2004, a leading investment banking firm Tuesday released a report indicating that the market for media-related mergers and acquisitions is heating up to its greatest point since the crash of 2001. Perhaps most importantly, the review by The Jordan Edmiston Group indicates that the fastest growing sector for media M&As are online media deals, the very same transactions that precipitated the earlier market crash.

The number of deals increased 31 percent to 465 and the aggregate dollar value of those deals soared 50 percent to $30.8 billion in the media and information industries tracked by Jordan in 2004. By comparison, the number of online media deals surged 71 percent with their dollar value skyrocketing 199 percent over 2003.

In stark contrast to the relatively weak advertising marketplace for B-to-B media, the M&A market for business media companies proved especially strong. The number of B-to-B media jumped by 26 percent, with their total value soaring by 238 percent.

Newspaper publishing also experienced a scurry of activity, as the number of deal went up by a hefty 43 percent, with their total value up by17 percent.

According to Jordan CEO Wilma H. Jordan, the increased number mergers and acquisitions can be considered a harbinger of things to come, indicating a much improving media economy. "There is a palpable sense of renewal and vigor in the M&A marketplace," wrote Jordan in a letter send to clients this week, while adding that, "There is a lot to look forward to in 2005, as evidenced by a number of positive trends occurring in the advertising sector and the general economy."

In the report, Jordan also predicts continued exponential growth for online advertising spending, forecasting a 30 percent growth rate to 13 billion. The banker also expects that the long maligned business-to-business market will see some improvement, with growth for business-to-business publications predicted in the 2-4 percent range in 2005.