Here’s one story the Wall Street Journal didn’t break on Friday. Vacationing in the Mediterranean aboard his yacht – the Rosehearty – didn’t stop Rupert Murdoch from picking up the phone to persuade three WSJ reporters from defecting, the LA Times reports, citing unnamed sources.

As you may recall, the first major sticking point in News Corp’s $5.6 billion deal for Dow Jones involved protecting its editorial integrity from meddling hands, including those of the lifelong newspaperman Murdoch.

One reporter is leaving for the New York Times, another is staying and the third is undecided.

It’s not immediately clear if Murdoch’s actions are signs of things to come, his attempt at maintaining high qualities at the flagship paper, or spin control. Paidcontent.org followed up with another nugget:
“The reception area at WSJs World Financial Center offices received a mahogany reception desk because Murdoch thought what was there needed sprucing up. So we heard. Take it for what it is.”
(LA Times)
(Paidcontent)

Keep an eye on:

Just how does Facebook’s Mark Zuckerberg plan to reach the mythical $10 billion valuation its investors talk up ahead of a possible initial public offering?

The Wall Street Journal gives a clue in a story on how it plans to boost ad sales at the social network du jour. It sounds similar to, but not the same as, Google’s hugely profitable keyword search system. Facebook is designing an advertising system that lets marketers target ads based on the information users jam into their profiles, according to the Journal’s unnamed sources. By next year, they hope to have in place algorithms that anticipate how receptive users might be to a particular ad.

These ads are unlikely to resemble the traditional banner ads that typically run along the borders of a Facebook page. They could even run in the “news feeds” within the main bar of a users’ profile, mixed in with updates from friends.

Perhaps the new system could help them solve a problem they faced in the United Kingdom, where six big companies including Vodafone and Virgin Media pulled their ads on complaints of having little control over where ads were placed?

Facebook’s Owen Van Natta certainly hoped so, he told Reuters in August. “We have to bulid some technology in order to provide some additional controls and we really excel at that.”  He added, “I expect that most, if not all, of those advertisers are going to be coming back on board if they haven’t already.”
(Wall Street Journal)
(Reuters)

Keep an eye on: 

• Microsoft and content delivery network Limelight Networks strike a technology agreement to help improve the reliability of Microsoft’s online services. (Reuters)
• “BioShock” sales and publisher Take-Two’s shares jump on rave reviews of the creepy underwater shooter game.  (Reuters) 
• Ticketmaster doesn’t expect to renew its ticket-selling deal with its largest client, U.S. concert promoter Live Nation. Will the Olympics make up for it? (Reuters)
• “Guitar Hero II,” “NCAA Football ‘08″ and the Wii brought hordes of gamers to GameStop during its second quarter, judging by a seven-fold jump in profits. (Reuters)

Tweaking ideas that exist in the traditional television industry, Google again has done what television networks and cable operators have only imagined with its latest wrinkle on video advertisements.

After much testing, Google introduced its online video ad strategy late last night, affording the media industry a peek at just how it plans to rationalize the close to $2 billion it paid for YouTube. Marketers can now overlay ads at the bottom of the video screen shortly before a video starts. Viewers are invited to click the ad to watch a video ad play on a separate window on the same screen. Overlays have been a time-honored television strategy used to promote its own shows, but making it interactive has been an unfulfilled dream. Until now. From Google. Maybe Sergey and Larry can do something about infomercials.
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Keep an eye on:  

• Has CBS violated U.S. child labor laws with its new show “Kid Nation”? Its take on “Lord of the Flies” meets “Survivor” drops 40 children in a New Mexico ghost town to see if they can build a new society without the help of adults. (New York Times)
• Underwriter pulls out of search engine Accoona  initial public offering. (New York Times)
• Attorneys general from all 50 U.S. states have joined forces to pressure MySpace, Facebook and others to install better parental controls and enforce age verification tools. Bills introduced in Connecticut and North Carolina have failed, but authorities vow to try again. (Wall Street Journal)

Tell us if you’ve heard this tune before: digital entertainment rivals with scant market share link up to chip away at Apple’s dominant iTunes. This time, MTV is set to join its largely ignored digital music operations Urge, a joint venture with Microsoft, and RealNetworks, according to the Wall Street Journal.

Nearly 80 percent of the U.S. digital music market belongs to iTunes, and everyone from Silicon Valley to Moscow has attempted to unseat the arbiter of digital entertainment to no avail. The world’s largest music company, Universal Music Group, decided to sell non-protected music tracks to just about everyone but Apple. The world’s largest retailer Wal-Mart this morning also announced it plans to undercut iTunes with its own sales of non-protected digital tracks at 94 cents per song, lower than the $1.29 that Apple charges.

So is the latest combo little more than tying two rocks together? Will it pose any threat to digital entertainment’s 800-pound gorilla? Stay tuned for an 11 a.m. EDT briefing.
(Wall Street Journal) subscription required

Other items to keep an eye on:

• Tribune shareholders meet to vote on Sam Zell’s $8.2 billion leveraged buyout deal. Will a credit ratings downgrade from S&P slow the process?
• Virgin Media CEO resigns just as its auction sputters. (Reuters)
• Dow Jones Vice President Paul Ingrassia resigns. He tells Reuters it was unrelated to Rupert Murdoch’s buyout. More execs to follow? (Reuters)
• ESPN buys leading rugby Web site Scrum.com (Reuters)

MediaFile is introducing a new daily column that aims to start each morning with a handful of developing stories that caught our eye. It could be anything from the day’s biggest deals to financing for a new Silicon Valley firm that aims to destroy business models overnight. We do this in-house already and figured it would be just as helpful to you as it is to us. Let us know how we can make it better.

Can he pull it off? That’s the question everyone’s asking real-estate magnate Sam Zell (pictured left), whose $8.2 billion leveraged buyout of newspaper publisher Tribune Co. could be endangered by the tightening credit market.

Shareholders gathering at Tribune’s annual meeting in Chicago on Tuesday are expected to approve the deal. But with the subprime mortgage meltdown putting the skids on debt-financed transactions and a stock that’s traded well below the deal’s $34 per share price, plenty are betting the deal won’t get done — at least not on the current terms. Zell’s committed, for now. Tribune shares traded at $24.46 last Tuesday, its lowest level in nine years.

One source told Reuters last week there were no known talks between Zell and Tribune over the terms of the deal … yet.
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Keep an eye on:

• Sony’s “Superbad” drop-kicked “Rush Hour 3″ to take the No. 1 spot at the U.S. box office this weekend, proving you can be a somebody even if you’re a nobody in Hollywood. I haven’t laughed as hard since “Old School.” (Reuters)
• Google discloses stake in Chinese social networking site Tianya.cn. (Reuters)
• Skype’s back! Reboots on PCs running Skype across the globe after receiving a routine software patch takes down network. (Skype blog)
• Building-B, a tech firm keen on building a set top box that combines on-demand HDTV and Internet video, lands $17.5 million. (paidcontent.org) (B&C) (press release)
• Aniboom, a Web site with more than 2500 animators who create and share their clips, is launching a channel on YouTube with an eye to discovering the next “South Park”. (Reuters)

Revivals, restarts and reboots took over the agenda this week in media as fallen stars and moguls plotted comebacks.

Tom Cruise and business partner Paula Wagner landed $500 million from Merrill Lynch to fund 15 to 18 films over the next five years to revive the storied United Artists brand.

UA, as film historians recall, was the joint venture founded by Hollywood legends Mary Pickford, Charlie Chaplin, Douglas Fairbanks and D.W. Griffith that was famously panned by one studio chief who described it as “The inmates are taking over the asylum.”

Perhaps Cruise will have better luck than the original team, whose project fell apart after feature film production expenses soared. Pulling it off could be the “Mission Impossible” star’s best riposte to Viacom’s Sumner Redstone who canned him in the pages of the Wall Street Journal.

Media/tech news this week:

Tom Cruise’s and Paula Wagner’s United Artists revival landed $500 million through Merrill Lynch. (Reuters)

Fired shock jock Don Imus could be back into the multimillions after settling his termination dispute over racial slurs with broadcaster CBS. Could he be headed to satellite radio? (Reuters)

And Microsoft co-founder Paul Allen began mulling more radical action at debt-strapped U.S. cable operator Charter Communications that could be the precursor to privatizing or selling off the company. (Time Warner Cable has expressed interest before.) (Reuters)

Even Yahoo had something to cheer about. A consumer satisfaction study from the University of Michigan of Internet users gave Yahoo the edge — finally — over Google. (Reuters)

Skype outage leaves millions of cheapskates like us incommunicado, possibly including owner eBay’s communications staff, which said last year it planned to wean itself off landlines. Time to read a book. (NY Times)

Sumner Redstone isn’t the only one big into games. MTV Networks earmarked well over $500 million to invest in developing and distributing games online in a move that will see it being weaved into the creative process at its inception. (Reuters)

Gulp. Does cable pioneer Dr. John Malone plan to do for beauty what he has done for media? A story in Women’s Wear Daily’s Web site on Wednesday had us asking the question.

A Liberty Media spokesman confirmed that Malone’s Liberty Interactive, which owns the QVC shopping network has taken a minority stake in Borba, a “cosmeceutical” company that makes drinkable and topical skin care products.

Is the good doctor finally living up to his title? Is a takeover of whoever makes cubic zirconium in the cards?

Well…maybe.

Liberty Media’s Jonathan Orr clarified for us why Malone, who spent a career building and selling cable and media empires, now has turned his attention to beauty. Orr drew parallels to Malone’s strategy at TeleCommunications Inc. (TCI), once the biggest U.S. cable operator:

“Borba is a cosmeceutical company that is carried on QVC. Much like TCI used to carry cable programmers on its cable systems and there would be great value creation in those programmers, QVC is carrying Borba on its systems and we believe that we will create value in Borba. Through a minority investment of an undisclosed amount, we believe we can participate in value creation in Borba that will result in them being carried on QVC. It’s not really about getting into the cosmeceutical business. Our stated goal has been to participate in some of the value creation through investments in some of the brands carried on QVC. This is really the first bite of that apple.”

In a side note, it also turns out Internet entrepreneur Brad Greenspan, the same guy who took on News Corp’s Rupert Murdoch to bid for Dow Jones, also holds a small stake in Borba. Murdoch, as you recall, agreed to buy back Malone’s big stake in News Corp in exchange for News Corp’s controlling stake in DirecTV. Small world.

(Photo: Borba.net)

News Corp and NBC Universal’s upcoming “YouTube killer” joint venture is set to launch in September and Forbes gets an update from former interim CEO of the venture. The two announced the online video joint venture this spring that will offer full-length movies and television shows for free in one of the Internet’s biggest collection of professionally produced programming. Left unanswered is why the world’s greatest programming minds haven’t been able to come up with a better name for the future of the content business than NewCo or New Site.

Highlights from Forbes’ interview with Kliavkoff:

• CBS seen likely to join up based on its plan to get their content out to users wherever they spend time. Viacom’s up in the air. They’re “still figuring it out.”
  

  “If you think about the approach that CBS has taken, for example, they sort of followed our lead for broad distribution. Partnering with New Site would be consistent with what they’ve announced they want to do, which is to have their content everywhere.”

• Disney unlikely to be a natural partner as their “protect the network brand” approach is inconsistent with the joint venture’s strategy.
  

  “Disney tends to take more of a centrist, protect the network brand rather than the show brand kind of an approach, which in some respects is inconsistent with what we’re doing because we think there’s discovery to be had between the shows. So they will either continue down that path or decide to more broadly distribute their content. If they distribute more broadly, we’re a natural first step for them.”

• All television shows will be free, long-form movies will be available to download-to-own for a fee.
• Videos on cellphones are a “broken business model.” A veiled threat?
  

  “There are two ways to get that fixed: either we do that in partnership with the carriers or we figure out ways to go around the carriers. We’d much prefer to do it in partnership with the carriers.”

Philip Beck, an attorney representing Google, told a U.S. District court in New York last week that the company’s video filtering technology could be “up, running and effective”, “hopefully” by September.

Beck’s declarations, made during a scheduling hearing in Viacom’s $1 billion suit against Google, appeared to be one of the most concrete indications of when the widely anticipated software will be available.

Thing is, it might not be. Google PR clarified what Beck meant a few hours after the statement:

Today we’re working with some of the major media companies to experiment with video identification tools. We’re excited about the progress so far, and we’re dedicated to making these tests successful. We hope to have the testing completed and technology available by sometime in the Fall, but this is one of the most technologically-complicated tasks that we have ever undertaken, and as always with cutting-edge technologies, it’s difficult to forecast specific launch dates.

So there you go. The software — designed to block video clips from being uploaded without the permission of the companies that own the content — might take a bit longer to reach media executives’ hands.

Beck also offered one of the more colorful definitions of how this “complicated” (in Google’s words) system would work: [from the court transcript]

A studio could say here’s our new Tom Cruise movie and we don’t want any knuckleheads with their video cameras in the theater videoing our movie and then uploading a 10-minute segment onto YouTube, so take our movie. And we would get the movie from them, and then our computers would do their magic, and that’s what’s being worked on now, so there would be key information extracted from the video and stored on a computer. … [A]ny video that gets uploaded basically gets filtered through the fingerprint database, and like the AFIS that the FBI has, and if there’s a hit, then within minutes the computer knows that and pulls it down.

In a departure from tradition, Sun Microsystems plans to release price-sensitive corporate news on the Internet minutes ahead of other traditional news dissemination outlets.

The decision follows conversations the company has had with U.S. Securities and Exchange Commission Chairman Christopher Cox, and is designed to give regular investors equal access to information on PCs and mobile devices as institutions with access to subscription services such as BusinessWire, Sun CEO Jonathan Schwartz said on his blog this week.

When Sun reports its fiscal fourth-quarter financial results on Monday, July 30th, it will be available first on its corporate investor relations Web site and through RSS feeds. It will be available to third-party news services 10 minutes later.

From Schwartz’s blog:
“It may not seem like it, but this is a sea change in how Sun communicates with the world - and sets a path for other public companies seeking to drive greater transparency. I wonder how far off we are from ceasing to issue traditional press releases altogether… after all, no news agency could possibly suggest they reach a greater portion of the planet than the internet.”