TMT credit crunch survivors face new challenge

By Georgina Prodhan and Jim Finkle

FRANKFURT/BOSTON (Reuters) - Technology and media companies have weathered the global credit crunch but a wider U.S. economic slowdown poses a deeper test of their resilience.

After a round of first-quarter earnings reports, investors in companies such as IBM (IBM.N: Quote, Profile, Research, Stock Buzz), Intel (INTC.O: Quote, Profile, Research, Stock Buzz) and Google (GOOG.O: Quote, Profile, Research, Stock Buzz) heaved a sigh of relief, but the sector may have little time to regroup before facing its next major challenge.

The credit crunch has done most damage in the financial sector -- certainly an important customer group for suppliers of hardware, software and communications, but also a sector that cannot afford to fall behind in efficiency-boosting technology.

A slowdown in consumer spending, however, will ripple more broadly through the economy, and leaders of top technology, media and telecoms companies -- including a clutch attending the Reuters global TMT Summit next week -- have yet to convince that they will escape its effects.

Steve Rubinow, CIO at stock markets operator NYSE Euronext (NYX.N: Quote, Profile, Research, Stock Buzz), said he was scrutinizing IT spending harder than usual and that smaller vendors would likely suffer most -- an opinion also expressed by several industry observers.

"We're trying to keep a lid on it," he said.

"We're going to get a lot of leverage by reducing the number of vendors we deal with," he added. "We have the Oracles (ORCL.O: Quote, Profile, Research, Stock Buzz), the HPs (HPQ.N: Quote, Profile, Research, Stock Buzz) and the IBMs (IBM.N: Quote, Profile, Research, Stock Buzz) of the world having a significant presence in what we do."

Trip Chowdhry, an analyst with Global Equities Research, says ultimately no tech company will escape unscathed.