Boom time's here again, but bad news for BT and AOL Time Warner

A reason to rejoice is found in this morning's papers as we find ourselves on the crest of the second wave of internet boom.

The Telegraph presents figures from a Confederation of British Industry/KPMG report published yesterday, showing a growing confidence in web-based revenue amongst old economy company execs. Of the 1,000 companies surveyed, 76 per cent currently generate less than five per cent of their profit from online activities. However, 58 per cent expect ebusiness to contribute over 10 per cent of revenue within the next three years... The Financial Times reports on its front page that internet adverts are to get 'bigger and bolder'. The Internet Advertising Bureau announced yesterday that 'some of the biggest websites' have agreed to introduce 'a new generation of bigger and more prominent' adverts in order to revive interest in the flagging moneymaking medium. Look forward to seeing new shapes in new places on your screen, carrying more information and animation, with reduced reliance on click throughs. Advertisers are about to get innovative to 'get their message across'... Not such good news, however, for the newly-merged mega media giant AOL Time Warner. Only weeks after a $106bn deal was finalised to unite two of the world's biggest companies, telecoms giant AT&T is considering floating its 25.5 per cent share on the New York Stock Exchange, according to the Telegraph. The sale was a condition imposed on AT&T when it acquired cable company MediaOne, and it has until tomorrow to agree to the sale to an interested party - such as AOL Time Warner, 'the obvious choice' - or to put its stake up for sale in some form of offering. AOL Time Warner is currently bidding between $9bn and $10bn. AT&T is hoping to achieve higher. Lengthy negotiations have been ongoing and now the deadline is nigh...
Bad news, too, for BT which yesterday had its rating outlook cut further. Eleven days after Standard & Poor expressed concern about the telco's debt mountain and threatened to cut its credit rating, Moody's Investor Service yesterday took the leap and relabeled BT 'negative', rather than 'stable'. The Financial Times sees the move as reflecting uncertainty in the telecom sector, further depressed by France Telecom's recent, dismal, floatation of mobile subsidiary Orange. BT has outlined plans to reduce its debt - set to reach £30bn by the end of next month - by £10bn, but the schemes involve no inconsiderable reliance on asset disposals and an IPO of BT Cellnet. It is not in a position to pull the IPO, but neither is the market in particularly receptive form. Moody's did stress, however, that the downgrading was not only due to "perception of an increased uncertainty regarding BT's management to execute within the next 12 months its strongly committed asset disposal plan". Rather, the move is a reflection of an overall negative outlook on the European telecoms industry. Some comfort...