Uncertainty aplenty as Web, media leaders convene

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 both 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 still 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."

Microsoft co-founder Bill Gates, a perennial at the Allen conference, won't be joined by CEO Steve Ballmer. But he is bringing the company's top dealmaker, Henry Vigil, Microsoft's senior vice president for strategy and partnership.

The world's largest software maker, still desperate to catch up in Internet search and grab more of the ad revenue it generates, is reportedly trying to enlist Time Warner Inc. and News Corp. for a joint bid to split up Yahoo Inc. for parts. For years, Yahoo has lost ground to Google in the race for Internet ad sales. And its embattled CEO and co-founder, Jerry Yang, who faces attacks on several fronts after Microsoft Corp. withdrew a $47.5 billion takeover bid, will be on hand.

Will Gates and Vigil seek out Time Warner CEO Jeff Bewkes or News Corp. Chairman Rupert Murdoch? Will Yang seek cover again with Google founders Larry Page and Sergey Brin, who inked a deal in June with Yahoo on shared ad sales? Investor Carl Icahn, among those most actively pushing Yang to sell or make another deal with Microsoft, will not be in Sun Valley, according to a copy of the guest list obtained by The Associated Press.