By Matt Kinsman

First, a disclaimer: FOLIO: believes the capitalization of online products is essential to the long-term growth and viability of the publishing industry. Anyone;big or small, consumer or b-to-b;not investing online nor attempting to figure out how to maximize the medium in a way that best fits the needs of their company and customers will be left behind.

That said, has there ever been another industry sounding the death knell for what generates 90 percent of its revenue and will continue to do so for the foreseeable future?

Internet revenue is growing in leaps and bounds while print revenue continues to stagnate. Online is relatively low cost and high margin, while print is increasingly expensive. At the American Business Media Top Management Meeting in November, several observers remarked that there was a sense of optimism among attendees that’s been missing for the last few years. Much of it is attributed directly to publishers starting to see a pay-off online. The excitement is understandable. After years of playing duck-and-cover, it’s fun to talk about growth again.

But the reality is that online revenue is minuscule compared to print and events. Publishers walk around chirping “media agnostic” and “blogosphere” the way they used to say “CRM” a few years ago. Those who really know how to execute on those concepts at this point are few and far between;but hey, it sounds good in public.

Let’s not just chase anything that has “.com” at the end of its name. The ghosts of Web 1.0 are still with us. Primedia is not yet a year removed from pulling the plug on its experiment (a strategic, if not financial fiasco). Is AOL still excited about the “blogosphere” after dumping $25 million on Weblogs Inc. while much of the network was inactive?

In this issue, there are several examples of publishing leaders checking reality against excitement. David Straus, postal counsel for ABM, responds to criticism of his focus on old-fashioned postage woes by saying “ナit would be a mistake to focus on the exciting world of electronic communication to the exclusion of the mundane world of postage costs.” Mike Reilly, CEO of Randall Reilly Publishing, which is seeing its first real online profits, isn’t abandoning its core products in light of that success. “Most of my friends at ABM meetings say online is up, and it is, but as an overall percentage of volume, it’s single digits for almost everybody.”

Yes, publishers need to aggressively change the way they do business and online needs to be the cornerstone of that change. But don’t forsake your core moneymaker to do it. That’s the only way we’re going to be creating more TechTargets and 101communications and fewer VerticalNets.