Time Warner's new-year surprise $25 billion writedown today was bad enough, because it suggests that the media giant's advertising-supported cable, publishing, and internet businesses are worth less and less with each passing quarter.

Worse is its warning of a probable loss for all of 2008, because it would be the first loss in six years and comes less than two months after it had forecast earnings of more than $1 a share. (Though it's unlikely to come close to the $98.7 billion loss posted in the year after the disastrous merger of AOL and the original Time Warner.)

But worst of all is what Time Warner's profit warning suggests for the rest of the industry, particularly newspapers, magazines, and all of the other old-media companies struggling to transform themselves into Web-based information businesses.

J.P. Morgan analyst Imran Khan took Time Warner's announcement and backed out some online advertising numbers. What he found confirmed his suspicions about Web-ad spending trends.

In a note to investors, Khan concluded that Time Warner's profit warning suggested an 18 percent year-over-year decline in online advertising revenue at the company's AOL unit. He reckoned that the change could have translated into a $64 million drop in revenue in those three months alone.

Where did the money go? Certainly not to Time Warner's cable or magazine publishing businesses: They, too, were reporting declines.

Some of the decline may well have been attributable to a general retreat in ad spending during a particularly nasty economic slump. But Khan said it also illustrates a shift away from online "display" ads—the banners across the top of web pages or the boxes filled with animation and music—and toward search-based ads. Those are the dull, but particularly effective plain-text ads that pop up on search engines or are added to web pages by brokers like Google.

"The implied weakness is consistent with our thesis that online advertising budgets are being reallocated to search," Khan wrote. "Although AOL historically underperformed the market, we think the broader implication here is that demand continues to soften."