• Reuters via Scientific American, Wednesday, July 18, 2007 10:45 AM

As it languishes in its seventh straight year of little or no growth, the terrestrial radio business is hoping that a spike in political advertising and revenues from nontraditional sources will give it a boost in 2008. "I think it would be shortsighted to view the industry as hopeless," says Barrington Research analyst James Goss, who adds that even in the tough current environment, radio companies can throw off a lot of cash.

"Chances are 2008 will be better, due to Internet dollars or nontraditional revenues and political dollars." Revenue from Web sites, concert promotions and the like are just a small percent of the $20 billion industry, but they have grown while traditional ad sales have not. Some are looking to a deal between Google and Clear Channel that will have the Web behemoth selling around 5% of Clear Channel's inventory as a crucial step.

"There can't be industry growth unless these broadcasters get new advertisers that traditionally haven't used radio, and that's why I think Google is the most important thing to watch," says RBC Capital Markets analyst David Bank.

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