War Is Bad News for Media Stocks

The effect on the media business of a war in Iraq is unclear. But rumors of war already have impaired both media operations and media stocks.

Though media companies and investors are hopeful that advertising will strengthen soon after the beginning of any armed conflict, marketers' desire to wait for some postwar or even midwar sense of stability is already crimping media companies' performance, according to anecdotal indications.

"You have a skittish environment," says Jonathan Jacoby, an analyst with SunTrust Robinson Humphrey. Advertisers, he says, "are waiting. They're afraid to place dollars."

The question of how long this holding pattern might last, and how long any armed conflict might be, has a significant impact on media conglomerates such as AOL Time Warner (AOL Quote), Disney (DIS Quote) and Viacom (VIAB Quote), all of which have seen their shares fall in value since the beginning of the year. ...