A few years ago, a tech-savvy investor might have surveyed the media landscape and decided that companies highly dependent on print – and especially print newspapers – would have a tough stretch coming up, while companies with a good position in internet media would be set up for boom times.

The first part of that prediction has certainly been on the mark; most media companies have been pretty bad investments recently, and the newspaper sector has seen nothing less than a bloodbath.

What's surprising, though, is that the pure-play internet media companies that might have been expected to benefit from the tectonic shifts in the industry have done badly too. Yahoo!, CNET Networks and Interactive Corp all seemed to be in a great position three or four years ago, and yet all three look like they'll soon cease to exist in their current form as investors express their displeasure with poor stock performance.

Part of the explanation for this is simple enough. Yahoo! and CNET could be considered new media versions of old media models; they aim to drive large numbers of people to their pages with expensive investments in content, and monetise that traffic via display advertising. But low-cost blogs – especially in the technology news space that CNET once led – have scooped up a lot of the audience; in a fractured media space, it's harder and harder to be a general-purpose destination website, like Yahoo!

Furthermore, Google has sucked so much air out of the internet media environment that it's hard for anyone else to compete as a mass-market player. Yahoo! has tried, and failed, to make its search advertising system anywhere near as effective as Google's; IAC even went head-to-head with Google on search with a big advertising campaign for Ask.com, but that effort does not seem to be making a dent.

Certainly, lots of small players have had success in internet media. TechCrunch, PaidContent, Huffington Post, Gawker Media, the Federated Media network and countless others are more than making a living, and suggest that the notion of driving web traffic with appealing content and selling advertising against those "eyeballs" is not exactly obsolete.

Yet there is a sneaking suspicion in the media business that the end result of all this change will be not just a redistribution of media advertising dollars, but an overall decline in the amount of money spent on professionally-produced publications, whether they be in print or online. If you can reach people while they're hanging out on Facebook, or searching for something on Google, why pay a premium to try and get the attention of people who are reading news or watching video?

The nightmare scenario is the music business, where the internet has shrunk the revenues of the industry by double-digit percentages over the past few years without any indication that online sales will ever fill the gap. Even successful recording artists who are not in the top tier must now count much more heavily on live performance, direct sales and merchandising to make their money. The big record labels are not longer the gatekeepers they once were, which is a good thing for many aspiring artists, but they are also no longer sources of big cash rewards for anyone who can get in the door.

It's important to keep all this in perspective: Yahoo!, just a little more than ten years old, still has a market capitalisation of around $40 billion, and it is threatened not by a lack of a business model but by Microsoft. IAC, one could argue, is the unique product of Barry Diller's wheeling and dealing and not necessarily an example of anything. CNET may simply be suffering the unremarkable malady of weak management (or at least that's what the hedge funds who are trying to gain control of the company seem to think).

But the simple fact that there are no large, healthy, publicly-traded internet media companies (with the important exception of Google) is instructive. The winners, so far at least, are small niche players that have been able to achieve some measure of scale, and while some might grow up into profitable, large public companies, that's not inevitable.

Indeed, the financial structure and economic models of the new media business are still very much in flux, and will probably remain so for some time to come. That means opportunity for VCs and start-ups – but for public market investors, good instincts will not be enough.

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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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