Magazine publishers, forced to pursue defensive online strategies amid the emergence of webzines, will be among those glad to see the end of the internet hype.

The sharp fall in the technology market cut off a vital source of capital for many new rivals, which threatened to reduce their share of the advertising pie.

Start-ups, such as Slate and Inside.com, grew quickly, causing seasoned publishing executives to lose some sleep over how they could continue to maintain costly print operations when the barriers to entry in the online world were virtually nil.

But the bravado among webzines, pure online publishers, has disappeared and with it much of the threat they once posed.

In the UK, The Spectator magazine was one of those happy to hear that Slate, a US satirical political magazine, had ditched plans to launch a UK version because of a lack of funding. The Slate was not the only one to eat humble pie.

Meanwhile, Inside.com, the website effusing confidence about its news edge, joined forces with The Industry Standard, the Silicon Valley-based bible for internet entrepreneurs, in a curious reversal of publishing's evolutionary process.

"The magazine publishing model does not, and cannot, stack up with a single web publication," says Patrick Bossert, head of e-strategy at KPMG Consulting.

In the early days of the internet, magazine publishers were not deterred by their inability to replicate online one of their unique selling points: that glossy feel. Using a mouse to browse through articles on a computer screen did not quite have the casual appeal for readers of leafing through a colour supplement.

Nor were advertisers as convinced about using a medium that would not stay around for months on a coffee table or change any number of hands on a long train journey.

Jon Williamson, from KPMG's entertainment practice, says: "Consumers like the physical presence of magazines - the interaction is continuous and repeated."

Brand extension

But for the traditional publishers, launching websites associated with their magazine titles was largely an exercise in brand extension.

This approach, while not unexpected in a sector whose long-term growth depends on a constant churn of new launches, carries its own dangers, according to Anna Russell, marketing director and co-founder of Silicon.com, an IT and e-business website and digital TV service.

"There has always been a tendency for the online property to be the poor relation to print," she says. "Publishers and sales teams are still making the mistake of offering online advertising as a free extra or sweetner.

"The consequences of not taking your own media property seriously means that the rest of the market will do likewise."

Magazine publishers have benefited thus far from reaching a broader audience over the internet but they will be expected to monetise those additional readers.

Ancillary revenues from e-commerce to date have been small but analysts see opportunities to increase them.

Premium services, such as access to back issues, are likely to be a focus of development. While niche operators, most particularly in the fields of academic research, will be able to charge users for access, that revenue stream will be cut off to those offering information of general interest.

So the mass-market players will have to come up with more creative money-making ideas. The best strategy will be to build a multimedia presence across as many digital outlets as possible, according to a recent report by ABN Amro, the European investment bank.

"The broader the distribution network, the more the value of a publisher's brands and content creation skills are maximised," it says.

A good example is the move by Emap, the UK-based consumer magazine publisher which has expanded in the US, Australia, France and Asia, to group its operations around target audiences rather than media.

Magazines such as Q and Mixmag are now brands the company can sell across radio, TV and the internet. The company is also exploiting its teen brands such as Smash Hits and Heat magazines through T4.com, a joint venture with Channel 4, the UK's fourth terrestrial TV channel.

Revenues

Other entertainment-based magazine sites will also seek revenues by rolling out their content to other media, such as mobile phones, exploiting the popularity of short messaging services and downloadable ring tones, for example. Building communities of interests and then selling them to advertisers will be a key strategy.

While the internet did not sound the death knell for print magazine publishers, the worsening economic outlook means the threat has not entirely subsided.

Magazine publishers, dependent on advertising for about half their revenues, are beginning to feel the effects of a softening in the market.

The hardest hit have been those riding the internet wave - new economy titles including Business 2.0, owned by Future Network, and even pioneering publications such as Red Herring and The Industry Standard, which have both been forced to cut overheads and abandon international expansion plans to focus on their domestic market.

As investor sentiment in the internet sector tanked and many dotcoms went bust, these titles lost many of their clients. But there are tough times ahead also for those reliant on auto, financial and recruitment advertising.

Ironically, the market downturn may provide an opportunity for some webzines. While the general-interest ones will undoubtedly be badly hit by the substantial slowdown in the online advertising market, the niche players may be better placed.

With the ability to track the efficacy of advertising on the web, marketing directors under pressure to justify the size of their budgets may be convinced to spend their money in a more focused way.

Ford, the US carmaker, for example, recently recognised that 85 per cent of Volvo customers were online so chose to advertise its new Volvo S60 model exclusively on America Online's sites rather than opt for a much more expensive TV and national newspaper campaign.

But this theory is largely untested and it is likely that most advertisers will still want to pitch for the mass audience.

Given that premise, online magazines with the inability to keep hold of readers should they have to introduce subscription fees will continue to find it tough going as stand-alone players. Expect more tie-ups in the mould of Inside/Industry Standard.