New Media is a game that moves as you play.

REPEAT after me--this is not 1999. Really. Granted, it sure feels that way, what with new Web ventures being announced by the hour and top-name bloggers taking on cult status (much as with top-name dot-comers just a few years ago). Another indicator: packed seminars and symposiums for most anything with the words new media and convergence. Everyone, it seems, is looking to get in the game.

Trouble is no one has quite identified what the game is, which is what makes these days different from the boom-boom '90s. Back then, the online world had plenty of capital--thanks mostly to the public markets--as well as cockamamie business models that at least sounded very impressive to the investors buying in. What they didn't have, of course, were nearly enough customers to help pay for their ambitious plans.

Today, there's no shortage of customers--even specialized blogs can draw several thousand unique visitors a day. But what's lacking is a workable business model, as well as the startup capital to make the venture pencil out (and wanting to sell out to Yahoo or Google is more wishful thinking than a business model).

There is money out there, of course. Private equity firms have made $130 billion worth of purchases so far this year. But it's generally going toward sure-thing investments rather than online ventures whose financial metrics are pretty much anyone's guess.

Well, not completely. The Wall Street Journal reported last week that the front pages of some of the most popular sites--Yahoo, MSN and AOL, to name three--are booked for up to 18 months, which has resulted in double-digit price increases. A few years back, MSN charged $25,000 to $50,000 for a 24-hour prime position on its home page; now the price can run $1 million.

That's been enough to boost online ad spending by 26 percent, to nearly $6 billion. But it's still a bargain compared with network TV, which charges $500,000 for a 30-second spot on "Desperate Housewives." Actually, there's still no comparison between the rates charged for online advertising and those of old line media--and once you get past the major portals and Web sites, they're practically giving the space away.

The networks, meanwhile, keep hanging in there. Their research shows that TiVo-type digital video recorders do not result in nearly as many viewers skipping ads as previously believed. "Never have so many people been so wrong for such a long period of time," David Poltrack, CBS' executive vice president for research and planning, told the Los Angeles Times.

Online adherents have generally accepted this disparity as part of the inevitable transition from old to new media. Thing is, the overall ad numbers have remained stubbornly low--just 3.7 percent of all advertising revenue in 2004, from 3 percent the year before, according to a PricewaterhouseCoopers survey. That's nowhere near the critical mass required for those private equity folks to feel very comfortable about leveraging their dollars into a new media venture.

Advertisers, it seems, remain gun-shy about the Web--not great news for media companies trying to figure out how to make serious money online. Their Interact ventures thus far have been mostly commercial bombs, thanks to the ill-advised decision years ago to make most Web content available for free (the exception being the online edition of the Wall Street Journal, which even requires print subscribers to fork over $49.99 each year).

In the past few weeks, The New York Times has had some success charging for its columnists, but there's scant likelihood that the model can be carried over to other sites or blogs. "People hate, hate, hate to subscribe to things on the Internet," Microsoft Corp. Chairman Bill Gates told The New York Times.

That leaves 2005 just as confounding as 1999-and with little resolution in sight.

Mark Lacter is editor of the Business Journal He can be heard each Tuesday morning at 6:55 and 9:55 on KPCC-FM (89.3).