Outlook: Pearson online

PEARSON, THE Financial Times to Penguin books media group, appears to be rolling its tanks on to the new media lawn in a quite significant way. It is pumping pounds 40m into FT.com, and yesterday's deal to merge FT Asset Management with an equivalent operation in the US gives it a very handy one-third stake in CBS.Marketwatch.com, one of the up and coming finance web sites in the United States. All this is part of a pounds 120m Internet investment designed to make the FT group matter as much online as it does in print.

There is an investor health warning here as Pearson has been down the new media road before and got its fingers burned in the process. It is not that long ago that Pearson invested megabucks in something called Mindscape, an American computer games company that looked intriguing, but soon had "GAME OVER" flashing up all over the place. It ended up being flogged only a few years later with huge write-offs.

With Marjorie Scardino at the helm, Pearson is taking a different approach this time around. Instead of diversifying into new types of "content" such as computer games, Pearson is attempting to migrate existing expertise in financial information onto new mediums, such as the Internet. Its purpose is therefore as much defensive as expansionist.

Financial Times Asset Management is a case in point, providing data on 3.5 million securities and bonds to enable instant portfolio valuation. It has hardly been a high profile part of the organisation, but this deal gives it annual revenues of $320m as well as important cross-promotional possibilities between FT.com and the CBS web site. The nature of the deal, an all share reverse takeover, also means that Pearson places a market value on FTAM of an astonishing $800m. Few people knew Pearson even owned this business, let alone that it could be worth so much.

It is early days in the new media battle, but thus far, the old media dinosaurs seem to be holding up remarkably well.