NEW YORK — When John Hogan in 2002 was asked to become CEO of Clear Channel Radio, the nation's largest radio operation, family and friends gave him some bracing advice.

Don't do it.

"There were people who thought I was crazy," says Hogan, 49. "The industry was taking it from a number of different places. And radio was not a cool thing."

Boy, that's an understatement.

Wall Street began to tune out broadcast radio after the turn of the century as music fans started listening on the Internet, satellite radio and iPods. Radio company stocks collectively are down 60 percent since Jan. 1, 2000 — 26 percent over the past 12 months.

Meanwhile, an army of consumer advocates, musicians, government officials and even other radio CEOs trained their rifles on the radio company and its parent, Clear Channel Communications. They had bought their way from 43 stations to about 1,200 — including multiple outlets in most big cities — after 1996, when federal ownership limits were relaxed.

"Nobody had seen a 1,200-station radio company before," says Emmis Communications CEO Jeff Smulyan. "A lot of people were angry."

That didn't intimidate Hogan, a well-liked ex-radio ad salesman little known outside the industry. "I figured I couldn't screw it up more than it was screwed up," he says.

He can afford to laugh now. In recent months, the big question in radio has become whether the bold changes he's making at Clear Channel can be a game plan for reinvigorating the entire business.

Hogan turned radio on its ear by slashing time devoted to commercials and promotions, cracking down on indecency and developing high-profile names, including Whoopi Goldberg, whose morning talk show launches July 31.

Now he's diversifying into digital media, including HD Digital Radio, the Internet and cell phones.

With these changes, "We are strategically different, operationally different, and philosophically different" from the rest of the radio industry, Clear Channel Communications CEO Mark Mays said in May.

An analyst who doesn't buy that yet is Sanford C. Bernstein's Michael Nathanson. "They are a radio company," he says. "They aren't sticking their head in the sand, but they're still in an industry with growth challenges."

About 95 percent of the $3.7 billion in revenue that Clear Channel Radio is expected to generate this year — about 53 percent of the parent company's total — still will come from old-fashioned radio station ad sales. And that business is stagnant: Buyers spent $21.5 billion on radio last year, flat with 2004, according to the Radio Advertising Bureau. This year's sales through May are down 1 percent versus the same period in 2005.

Clear Channel, which has more than 300 stations broadcasting digitally, is busily developing niche formats — a package of everything from audio cues to programming and playlists — that stations can use to create extra HD channels. The 80 already devised, with 50 more planned, include The Pride (for gay listeners), Workout (for exercisers) and Kisspanic (Spanish language Top 40). All also are available for purchase by radio companies.

Some consumer advocates say that's the wrong approach. HD Radio is becoming "a mirror image of what Sirius and XM have done," says Michael Bracy, policy director for the Future of Music Coalition. "There's no shortage of national platforms. The way to compete is to be live (as opposed to pre-recorded) and local."

Though he sees profit in the long term, Hogan expects to lose money on HD until about 2009. It costs a station about $100,000 to add the technology, and stations in the Alliance have agreed to keep the new channels ad-free until 2007.

Hogan's also excited about developing digital profit potential beyond radio. Clear Channel's 1,145 Web sites attract about 8 million unique visitors each month. Some provide videos of live performances, interviews with emerging artists and podcasts. In January, most Clear Channel Radio sites began offering on-demand viewings of music videos from Universal, Warner Music and EMI.

The company also provides sports and music programming to cell phones. And it plans a news, traffic and weather service.

While some of the online and cellular ventures make money, Hogan says he still considers them investments in his plan to make the radio business cool again.