• Business Week, Monday, August 27, 2007 11:03 AM

As the housing market continues its collapse, the tech sector is starting to look like "somewhat of a safe haven," says Standard & Poors' analyst Scott Kessler. Since the stock market's 387-point drop on Aug. 9, the tech sector hasn't been impacted by the sustained slump. But a safe haven?

"Money has got to go somewhere," says David Geltner, professor and director of MIT's real estate program. Indeed, there is a ton of cash out there--particularly among large caps, and media firms, especially, are investing in online advertising. So far, Wall Street seems to approve.

Why? Because online advertising is cost-effective in a downturn market. Last time the economy took a dive, advertisers pulled back interactive spending in favor of more familiar territory, like TV and print. This time, if the overall economy hits a skid, online will be an option. In fact, Kessler says a marketing crunch could even speed up the transfer of ad dollars from traditional media to online. Not only is it less expensive, "you can spend it in small bites," he says. "When you do television buys, they are generally big commitments where money is required up front."

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