When the Wall Street Journal launched its website as a subscription service in September 1996, there were few in the internet industry that could fathom the decision to charge for online news content that could be accessed for free elsewhere.

Rivals warned that WSJ.com would simply take sales from the the newspaper itself, and deter new users who did not read the print version but might stumble across the online one.

Neither of those scenarios came true. Furthermore, the fact that the Financial Times, owned by media group Pearson, is putting more emphasis on online subscription and syndication services for premium content is evidence of changing views. Dow Jones, owner of the WSJ, may not have had the wrong idea after all.

Such re-evaluation also shows that it has been a year of learning for online news providers, whether start-up or established operators in the older media of television and print.

The online-only sites were the first to feel the pinch when the over-hyped stock market valuations of internet companies came tumbling down. The news providers found themselves in the odd position of being the subject of the story.

The most high profile was TheStreet.com, founded by well-known Wall Street figure James Kramer, which gave up on TheStreet.co.uk despite claims by executives at the UK operation that it was more than washing its own face.

Another US-based site that found the going tough in Europe was Jagnotes.com, which closed its less established European offshoot as the cash squeeze tightened. Others that teetered included Netimperative, the technology news site, and Interactive Investor International, scotching the perceived wisdom that specialist news sites would be able to survive on their own.

But the retrenchment has not been confined to online-only providers. The established operators have re-evaluated their strategies, particularly with regard to the resources they can afford to throw at the internet.

The New York Times, CNN, CBS, NBC and News Corporation are among those who recently cut jobs at their online news divisions after a period of rapid growth and excessive spending.

A tougher offline environment, marked by rising newsprint prices and weaker advertising revenues, is likely to increase newspaper publishers' conservatism over new investment.

The return to realism in market valuations may bring with it some important benefits, according to analysts at Salomon Smith Barney. While many old media companies struggled to retain their talent against the promise of riches for dotcom entrepreneurs, many of those who departed are now seeking their old jobs back. The pressure of underlying compensation inflation has been diminished, according to the bank's media equity research team.

But others have warned that the retrenchment could go too far. There are still growth opportunities in new media and future growth for offline news providers is likely to come from their ability to leverage their brands on to the internet. The potential for cross promotion is big.

Furthermore, the threat to newspapers' classified advertising revenues, in particular from special-interest news sites, remains. Classifieds - auto, property and recruitment - has shown signs of migration to the internet. This trend has prompted publishers to club together - for example in the form of the FishFour and This Is Britain networks in the UK regional newspaper industry - to ensure that they, and not their rivals, are the beneficiaries.

This threat has prompted analysts at investment bank

Strategic re-think on news sites

ABN Amro to warn of a shrinkage in the European offline classifieds market by as much as 30 per cent.

While old revenue streams are eroded, the pressure will be on to open up new ones as media companies are leaned on to make their internet operations profitable.

Subscription might be the thorny issue of the moment but there will be other ways to generate income, such as content syndication to third- party news sites or rival companies for example. Reuters, the business information group, has followed this course with great success by selling its newswire and data services to websites such as Yahoo!, whose finance sub-section is the most widely read online financial news sites.

Media owners may not opt to go it alone in some instances, forming joint ventures with rival organisations, for example FTMark-etWatch, a combination of the newsgathering and analysis resources of the Financial Times and CBS Mark-etWatch.

In other instances, buyers of content may not seek services from a sole supplier, choosing instead to rely on an intermediary to aggregate the information. One such aggregator is Moreover.com, which supplies packages of information gathered from around the web to corporate clients including McGraw Hill, Ernst & Young and British Telecommunications.

But it still may be some time before content owners find a profitable business model for the dissemination of news over the internet and many are in a state of paralysis as they rethink their strategies.

Independent News & Media, owner of the Independent newspapers, believes it put itself ahead of the pack by leveraging its stake in iTouch, the provider of interactive services to Wap (Wireless application protocol) operators.

Building on a premium telephone service charging callers for information, iTouch has been able to extract additional revenue from newspaper content by repackaging it for its own Wap site and rival portals.

The company hopes to generate substantial revenues from add-on services such as sports scores, horoscopes and special ring tones downloadable to phones and personal digital assistants (PDAs).

The increased penetration of new platforms, such as broadband cable and satellite, is expected to drive growth as network operators seek the content to fill their new channels of communication and consumers demand additional services.

As this happens, it is likely to become less and less noticeable to consumers that they are paying for news content that they previously expected to get for free.