NEW YORK: This is bad news for US networks who strongly rely on local advertising as a source of revenue. Media conglomerate Viacom has decided to reduce its full-year profit and revenue forecast because local advertising sales have not been picking up as rapidly as had been expected.

The alert is being seen as a signal that the US economy might not be rebounding as rapidly as the stock markets have anticipated. Reports indicate that Viacom gets around half its revenue from businesses that rely on advertising sales.

Last year, it had $24.6 billion in revenue. A Herald Tribune report estimates that about $5.5 billion, or 22 per cent of that total, came from local advertising sales. Worsening the situation is the fact that the company generated nearly 46 per cent of its revenue from advertising in the first half of this year.

Viacom expects revenue and profit growth to be in the mid- to high-single digits. The announcement comes just two months after the company's CEO Sumner Redstone raised his projections for this year to high single-digit growth in revenue and double-digit growth in operating income.

However it is expected that 2004 will be fairly healthy for advertising, with the Athens Olympics and the presidential elections. At this time, spending goes disproportionately to local radio and television, reports indicate.