When media and technology tycoons convene today in idyllic southern Idaho for five days of dealmaking and outdoor recreation, the mountain air will carry more than a whiff of uncertainty as most arrive with their businesses in various states of disarray.
Powerful moguls come to Allen & Co. investment bank's annual retreat in Sun Valley seeking new acquisitions and alliances and — increasingly in recent years — the opportunity to retool their businesses.
But this year media and online leaders are grappling with the Internet's increasing fragmentation. And they're all looking for more advertising revenue online, where media companies have recouped only a small fraction of what they lost in print and where Web companies want to maximize their investments.
Even the top Internet companies — save maybe Google Inc. — are seeing revenue growth slowing as online audiences fragment. And they worry that, without steady access to high-quality content, they won't be able to attract enough viewers to keep growing fast.
At the same time, the barons of old-line newspapers and broadcast TV seem to have realized it's pointless to keep fighting the shift online, but they're unsure how to embrace it. And they're struggling to attract new online users just to survive.
The flagging economy, slowing consumer spending and costlier capital on Wall Street will only add to any gloom and may prevent the summit, hosted for 25 years by investment banker Herb Allen, from living up to its reputation as an incubator for big deals.
"This could be the least headline-making Allen & Co. event in the past 10 years," said Porter Bibb, managing partner at Mediatech Capital Partners, a financier of media businesses. "Most companies have real problems and they don't necessarily know where to turn for help."