ITV seems to do no better than a Northern soap opera, whose embattled characters struggle with an endless supply of bad news. The City had adjusted to the collapse of television advertising (expected to be down 9 per cent over Christmas) but now ITV has added a new twist: its online businesses are slowing up too.

This is particularly troubling because there are signs that ITV has finally managed to get its website in order, helped by the popularity of The X Factor. Over 12 million videos were played in October, with 600,000 views of the first live X Factor episode. Another 650,000 watched three alternative endings to a murder plotline in Coronation Street, showing that people want to watch all sorts of video online.

Yet, despite the emerging audience, online revenues are stalling. Growth was only 6 per cent in the first nine months, with revenues hitting £25 million. That is only 1.7 per cent of all revenues. The online take will be 'impacted' in the rest of the year, because, the broadcaster says, the economy is slowing and there are so many other online advertising opportunities.

ITV has already had to push back online revenue targets two years because its online video joint venture with the BBC and Channel 4, Kangaroo, is being examined by the competition authorities. Now it says it is struggling for online growth, although it is hard to imagine the problems ITV is facing are shared by Google and other digital media companies. No wonder, then, that ITV decided to reintegrate its online arm into the core broadcasting business today, gently shedding boss Jeff Henry in the process.

If ITV has a hope of making long term digital progress it is not through tacky online bingo, or Friends Reunited, but by feeding that growing demand to watch anything to do with its programmes online. After all, it's good telly (not late night phone ins) that make ITV great.

Even so, ITV has a worryingly long way to go before it turns viewers it has into a meaningful advertising revenue. At 30.25p, or 12 times next year's earnings, the shares are still not cheap. Avoid.

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