Despite an amazing day in the stock market on Monday, it’s still safe to assume we are on the precipice of an economic slowdown. Ad forecasts are getting slashed, including online, which is rational albeit sobering. I believe a good portion of the market share shift to online has taken place, not all of it, but a good portion. What that means is that online is no longer the safe haven that can outperform handily by taking share, although as a medium it should still outperform and, in fact, might be the one category that can still post gains in 2009.

Newspapers online ad revenues are either slowing or down a bit; as a majority of their online ad revenues were classified upsells, this isn’t surprising. If you believe, as I just stated that I do, that the market share shift play is essentially over, newspapers’ online ad revenues are more indicative of their core business which is feeling the heat from the weak economic cycle.

Given the plethora of online start-ups predicated on an ad based model, there is bound to be a shake-up and more consolidation. Traditional media should have a near-term advantage as they can offer cross-platform deals in a market that is likely to be sensitive to value. It all comes down to supply and demand. We know demand will be down; we now need to rationalize supply.