• FT.com, Monday, May 8, 2006 11:15 AM

The second Internet boom, which we're experiencing right now, has loosened the deep pockets of venture capitalists around the globe, many eager to invest in media companies positioned to reap huge rewards in the future. What this means for old media is that they are largely on their own. The capital markets are not supportive, nor are the big VC outfits. "The realization that the Internet is changing the media business has prompted traditional media companies to develop digital strategies," says FT.com. An understatement, to be sure. "The digital transformation of the media business was much talked about in the late 1990s when billions of dollars were invested in digital ventures, only to be written off. Now it is becoming a reality due to the rise of high-speed Internet connections, which make it easily possible to watch video on the web." The site reports that U.S. venture capitalists invested nearly $400 million in online media and entertainment in the first quarter of the year, 80 percent more than in the previous quarter.

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