View from City Road: WPP's new line in communication

WPP spent the second half of the 1980s building an international media group, and the first half of the 1990s struggling to survive under the mountain of debt and equity issues required to fund its o'er-leaping ambitions. Now, at last, it has worked out that its spread of businesses could be a valuable asset rather than a millstone.

Yesterday's results announcement was a classic of advertising speak, full of buzz words like information highways, convergence and interactivity. Behind the dull jargon, however, Martin Sorrell believes the operating businesses could make more money if they talked to each other more. The focus of the parent company should, he concludes, shift from simply taking care of the finances to helping the businesses communicate.

Given that the holding company was responsible for WPP's parlous financial position - debts averaged pounds 361m last year, against pounds 161m negative net worth - while the operating companies continue to produce respectable results, some might question the value of head office interference. And try asking a temperamental creative director to share his knowledge with a rival, even one from the same group.

So far, the plans for co-operation are restricted to areas like dealing with its stocks of empty property, developing employee incentive schemes and research, all of which can sensibly be co-ordinated from the centre. But the scope for extending it much beyond that must be limited.

In the meantime, the much- mooted flotation of its market research business - if it does finally take place - will relieve much of the financial pressure, while economic recovery should keep profits moving ahead nicely. But, at 20 times this year's expected earnings, it looks rather too late to buy.