(FORTUNE Magazine) – FOUR GLAMOROUS NEWCOMERS ARE joining the iconic skyscrapers that form Manhattan's glittering skyline. The New York Times Co. is building an opulent 52-story glass tower that will reflect the sky's changing colors. Hearst Corp., publisher of such fashionable glossies as Cosmopolitan and Esquire, is constructing a whimsical glass-and-steel monument near Central Park, not far from the two sheer towers of the recently completed Time Warner Center. A short stroll away, Bertelsmann's Random House has put up a sober 52-story edifice, the handiwork of Skidmore Owings & Merrill. Across town, Bloomberg Inc. is preparing to move into a new Cesar Pelli tower with an elegantly curved atrium at its base.

It's an architectural extravaganza--a spectacular display of money, power, and hubris. But if history is any guide, companies that build such monuments tend to do so at the peak of their power, when they are convinced they'll always cast as long a shadow over the business landscape as they do at that moment. All too often, though, they build these shrines to themselves on fundamentally shaky ground.

In 1999, Andrew Lawrence, a research director at Deutsche Bank, created the "skyscraper index," which showed that the world's tallest buildings have risen on the eve of economic downturns. The Singer Building and the Metropolitan Life Building, completed in 1908 and 1909, respectively, heralded the depression of 1907--10. The Chrysler Building opened its doors in 1930, a year after the 1929 stock market collapse. The fall of a great company, too, often coincides with the construction of an imperial headquarters. Gordon Metcalf, former chairman of Sears, had clearly lost any sense of perspective when he told the crowd at the opening of the 110-story Sears tower in 1973, "Being the largest retailer the world, we thought we should have the largest headquarters in the world." He seemed oblivious to the fact that Sears was under attack from a new crop of retailers like Kmart and Penney. Around the time the tower was completed, Sears' stock began a long downward slide.

It's not hard to see parallels in the media business. Wall Street has been bearish on newspaper stocks for a decade. Book sales have been virtually flat for the past five years. While Internet advertising spending is soaring, magazine and radio advertising growth has been mired in low single digits. Music sales are no longer in a free fall, but they aren't expected to rise anytime soon. Meanwhile, once vital sectors such as DVD sales and cable TV are showing signs of maturity. At best, the media business is in a holding pattern; at worst, catastrophe looms.

In either case it would seem an odd time for media companies to build monuments to themselves. Then again, edifice building has long gone hand in hand with horrific moves at some of the world's most celebrated corporations. In 1875, Western Union completed a grand headquarters in lower Manhattan that served as a beacon for ships entering New York Harbor. A year later Western Union president William Orton turned up his nose at the opportunity to buy Alexander Graham Bell's telephone patents. "This 'telephone' has too many shortcomings to be seriously considered as a means of communication," he sniffed. It wasn't long before Western Union ceded its communications leadership to a new entry, Bell Co., which would later become AT&T.

More than a century later, in 1984, AT&T made a similar mistake as it was preparing to move into a postmodern skyscraper designed by Philip Johnson, with a scooped roof resembling a Chippendale headboard. AT&T chairman Charlie Brown, under court order to break up the company, foolishly chose to spin off the Baby Bells, which provided dial tones for most of the nation. The Baby Bells morphed into telecommunication powers while AT&T struggled to survive in the fiercely competitive long-distance market. Grand old AT&T has been sold off in bits and pieces over the past several years.

Are the CEOs of the Times, Bloomberg, Random House, and Hearst as oblivious to their companies' challenges as Gordon Metcalf and Charlie Brown? With so many skyscrapers reaching for the heavens at a time of tumultuous change, you certainly have to wonder. And if their own prospects weren't worrisome enough, there is an example that should give any media giant pause. In November 2000 ground was broken for the new $1.8 billion headquarters of Time Warner (owner of Time Inc., FORTUNE's publisher). It has been called the most costly single-building construction project in U.S. history. Two months later Time Warner announced its infamous merger with AOL. The skyscraper curse struck, and shareholders are still feeling the pain.

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