Saudi billionaire Prince Alwaleed is betting on the recovery of the new media sector. Yesterday he said he had ploughed $450m into AOL Time Warner, the world's largest media group, and $100m into Priceline.com over the past six months.

Prince Alwaleed said he had also invested $500m in the Wall Street firm Citigroup, where he is already the largest single shareholder.

A statement from his company, Kingdom Holdings, said the AOL Time Warner share price had fallen to attractive levels. The prince has developed a reputation for taking significant positions in companies he considers to be undervalued. He put money into Disney and Apple when both were unfashionable.

AOL Time Warner shares have fallen almost 25% this year as it admitted to slowing growth rates. In January, the company, which owns Warner Bros, IPC magazines and Warner Music, pared back revenue forecasts for the coming year. The company was downgraded by investment bank Lehman Brothers two weeks ago.

Prince Alwaleed said the weakness of the share price was temporary. "I believe in the power of the AOL brand and I am already a shareholder in this global media giant. Therefore, when the price reached a lucrative level, we decided to increase our stake."

His endorsement prompted a rise in the price yesterday. AOL Time Warner was trading 1.5% higher by midday at $26.85. Priceline.com was 7% better at $5.31. Citigroup was flat. Priceline.com, which invites users to name their price for a range of travel services, saw a 12-month peak of $10.35. The prince described Priceline.com as one of the few internet companies that "survived the turbulence witnessed by the internet arena".

· Warren Buffett, the billionaire investor, said his conglomerate, Berkshire Hathaway, had suffered a sharp fall in profits during 2001. In the annual report to shareholders issued at the weekend, the company reported income of $795m, down from $3.3bn.