When the UK's biggest commercial radio group was born in May 2005, there was massive optimism that radio would finally start to realise its oft-stated advertising potential. But, for GCap, it has been a three-year rocky road that led to last week's presentation to investors of a strategy for survival.
The story of GWR and Capital's less-than-perfect marriage is well known. Disagreements between former GWR and Capital management meant the merged company effectively operated as two separate entities for the first year of its life.
Then, GCap lost its dominant London position, leading to its decision to limit the amount of advertising carried on Capital - a move that cost the company millions of pounds in lost ad revenue - and an uneasy relationship with the City.
Global Radio sought to exploit this unease with a £300m takeover approach before Christmas, which was rejected. But Global hasn't gone away, forcing new chief executive Fru Hazlitt to come up with something new and radical.
Station closures
So, what do investors make of Hazlitt's new strategy, which tears up much of what GCap did under previous chief executive Ralph Bernard?
Highlights include the exit from loss-making digital radio, with the closure of stations and the giving away of the majority stake in the Digital One platform, plus the axing of the "two-ads-in-a-row limit" on Capital and a move to put content onto mobile devices.
Former TalkSport chief executive and now radio industry consultant Paul Robinson says: "To my mind, the new GCap strategy is largely about cost-cutting. There seems to be no sign of a long-term growth strategy. There was nothing about growing the top line."
It's a view echoed by some in the City. Dresdner Kleinwort Wasserstein analyst Richard Menzies-Gow says: "There is a degree of short-termism to the strategy. It is driven by the need to cut costs as opposed to what's best for the medium term."
The consensus is that investors can expect a financial upturn in the short term - with Hazlitt promising to double pre-tax profits to £24m in the next 12 months. But can the company deliver the long-term growth that the City craves?
The answer to that question rests largely on Hazlitt's ability to successfully execute a new plan to ramp up its broadband presence and to distribute its content on digital devices such as mobile phones and MP3 players.
GCap is bullish on this key element of its new strategy. It says its online revenues have been rising faster than the online advertising sector - indicating year-on-year growth of 20%-plus - and it claims to be on target to break even in broadband operations by the end of this financial year.
But not everyone is convinced it can deliver the hard financial returns that investors might get from a Global deal.
Nathalie Schwarz, director of radio at Channel 4 and a former GCap executive, says: "Only a small percentage of radio listening, a fifth of that for DAB, is done via the internet. And there are questions over whether broadband as a platform can scale for mass-market usage of online radio."
There are some very big question marks, say some, over the revenue-generating potential of radio distribution to MP3s and mobile phones. Apple is known to take the lion's share of revenue from its content partners. Suppliers of TV content to Apple, for example, can expect to take as little as one-tenth of what consumers pay the iPod company for their TV shows.
Interactive potential
Robinson says: "The audience delivered to GCap by these new digital offerings is likely to be even smaller than that delivered by DAB."
Menzies-Gow adds: "Broadband has huge interactive potential. But it is not a broadcast medium."
While the consensus is that Hazlitt's strategy does not promise a transformational change in long-term revenue, many believe she may have accomplished her most-pressing aim: staving off Global.
Robinson argues: "Hazlitt's move is a short-term success because it makes it really hard for Global to come back with an offer that it can make work financially.
"Shareholders might now have to stick it out with GCap, even though the company is not offering a major new growth strategy."
However, City analysts predict that a bid between 215p and 230p will be too attractive to decline. And Global believes that only it has the scale to be able to build up commercial radio into a truly nationwide, mass-market player.
The ball is now firmly in the court of three shareholders - Daily Mail and General Trust, Schroders and Fidelity - who between them control around 30% of GCap's stock.
If Hazlitt can keep them on board, her new vision will have a chance of determining GCap's future.
THE LIFE OF GCAP MEDIA
9 May 2005: Share price 350p - Capital Radio and GWR are merged into GCap Media. GWR boss Ralph Bernard becomes executive chairman and Capital boss David Mansfield becomes chief executive
19 September 2005: Share price 284p - Mansfield leaves and Bernard takes over as chief executive
12 May 2006: Share price 245p - Capital loses top spot in London
1 May 2007: Share price 226p - Fru Hazlitt becomes GCap London managing director
20 December 2007: Share price 124p - Hazlitt becomes GCap Media chief executive
7 January 2008: Share price 176p - GCap announces to stock exchange that Global had approached it with a bid of 190p per share on 17 December when the GCap share price was 123.5p. GCap share price soars to 205p the next day
11 February 2008: Share price 184p - Hazlitt unveils new strategy.