A lot of tech and internet companies reported earnings over the past week – and the results suggest just how difficult the economic downturn is going to be for a lot of companies in these businesses.

The old-line tech players, on the face of it, didn't do too badly. IBM reported solid results, and Microsoft did OK too (if you remove the online part of this business – more on that in a minute.) Apple did very well, and though it gave a downbeat forecast most analysts wrote that off as sandbagging.

The computer companies are benefiting from the weak dollar and continued strong demand overseas, with PC shipments actually rising by 10 to 12 per cent over last year, according to market researchers. Other hardware vendors, including the cellphone makers, should enjoy some of the same benefits.

The risk is that the economic malaise in the US – and, increasingly, in Europe – will in fact spread to the rest of the world. This has always been the case in the past, and while some argue that things are fundamentally different now with China and India and Brazil able to drive world demand without growth in the US, I have my doubts. A good rule of thumb: when it comes to business cycles, the past is indeed a very good predictor of the future.

In the internet business, and especially the web 2.0 media businesses that have driven the second internet boom, that rule of thumb points to a very rough stretch. Already, Google and Yahoo! and Microsoft have reported a slowdown in online display advertising. While the declines are more modest than those afflicting print publishers, they nonetheless suggest that the recession is indeed going to take a big bite out of many parts of the online advertising business. While search (i.e. direct response) is holding up better, that market is so completely dominated by Google that it doesn't give much comfort to other online publishers.

Much as I hate to think back to the dark days of 2001, it's worth remembering that advertising fell off a cliff during the dot-com bust. At the magazine I edited, the Industry Standard, ad pages declined by two thirds from December 2000 to January 2001, and continued to fall from there. And for those of you intimately familiar with the history, the bust actually happened in March 2000, but it took a while for the full impact to flow through. Virtually every ad-supported internet business was hammered, many of them fatally.

There is every reason to believe that online advertising will not suffer as badly this time around; it's much advanced, and more effective, and more central to many big marketers' efforts. While newspaper and magazine advertising is already falling by 10 to 20 per cent this year, internet advertising revenues continue to grow, albeit modestly.

I do though think that the forecasts are probably still too optimistic. We all have a natural tendency to look at the bright side, and no one likes to contemplate the likelihood of two or three or four bad years. Yet it's hard to look at the raw economic facts – the precipitous drop in property values and skyrocketing energy and commodity costs in particular – and not feel discouraged.

Yet there is a silver lining for online media companies like mine, NewWest.Net. In a down market, there is one way to grow, and that is to take market share. In fact, there are many examples in business history of companies that have taken advantage of the weakness of their rivals during a downturn to do just that.

It takes a lot of fortitude to invest further in the face of a major bear market, and timing is everything (i.e. you have to be realistic about the time horizons involved). But one core set of dynamics is unaffected by the downturn: people's media habits are changing, online is taking a much bigger share of people’s attention, and ad dollars will follow that one way or another.

Did I say some things are different this time?

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Jonathan Weber is the founder and editor in chief of NewWest.Net, a regional news service focused on the Rocky Mountain West in the United States. He was previously the co-founder and editor in chief of the Industry Standard

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