Did the strike hurt NBC’s wallet?

In a first quarter where scripted programming was severely limited by the effects of the lengthy Hollywood writers strike, NBC Universal managed to boost its revenue by 3 percent to $3.58 billion, and increase it profit also by 3 percent. But it fell far short of its target of 5-10 percent profit growth.

The truth is, NBC was a bright spot in a surprisingly weak quarterly financial report of parent General Electric, whose overall results were hurt by the soft economy. GE has so far said little about the catalyst or troubles of its media arm which has been struggling since favorites “Friends” and “Frasier” ended their runs four years ago and faces particularly intense pressure to rebound. NBC could again finish the season last in the ratings race behind Fox, ABC and CBS.

It’s possible the profit and revenue gains were the result of cost-cutting. Or, despite Bruce Springsteen’s assertion that there are “57 Channels and Nothin’ On”, maybe TV lovers, you know, love TV, no matter what is on — even if it is a never-ending stream of reality programs such as “Deal or No Deal” and “The Apprentice.”

Fortune suggests that the results may fuel cries for GE to spin off or sell its media holdings.

(Reuters)

UPDATE: Here’s what GE executives said about NBC Universal on the conference call they held with investors Friday morning:

• Its shows have been performing pretty well and NBC prime time is on track to finish number two.
• Local ad spending was down 11 percent, “an indicator that it’s tough out there.”
• In cable, “USA was No. 1 for the seventh consecutive quarter.”
• MSNBC had its highest-rated quarter in six years.
• Ratings at CNBC Business Day were the highest in seven years
• Film “had a very strong quarter,” and operating profit was up, principally driven by the this year’s DVDs.

Keep an eye on:

• Yahoo may have played its top two cards by pulling out possible deals with AOL and Google, but it does not seem to have changed Wall Street’s view that Microsoft will eventually win the takeover battle. (Reuters)
• Blockbuster is developing a set-top device for streaming films directly to TV sets and is expected to announce the offering sometime this month. (Hollywood Reporter)
• Facebook has hit 70 million users. It still trails MySpace, but is growing fast: Last summer, Facebook hit 30 million active users. (AlleyInsider)
• Is Katie Couric simply overpaid? (Time)

(Photo: Reuters)

What does the future hold for Yahoo? With so many media titans in the picture, it’s anyone’s guess how this merger mashup will end.

Just as it appears more likely that Yahoo’s days as an independent entity is drawing to a close, comes a possible deal that would lead to a bigger and better Yahoo.

News Corp is considering joining Microsoft in its bid, which would bring in MySpace and create a more formidable rival to Google.

But Yahoo is closing in on a deal with Time Warner Inc that would fold AOL, excluding its legacy dial-up Internet access operations, into a combined Yahoo company.

Oh, and Yahoo is testing a Google ad search system as a potential way to keep Microsoft at arm’s length.

Got all that?

(WSJ)
(New York Times)
(Reuters )

Keep an eye on:

• “CBS Evening News” anchor Katie Couric is likely to leave the network well before her contract ends in 2011. (WSJ). On the other hand, CBS says “we have no plans for any changes regarding Katie or the broadcast.” (LA Times) If Couric is eased out as anchor, CBS plans to offer her either a syndicated talk show or a full-time role on “60 Minutes.” (Washington Post)
• HBO has named television agent Sue Naegle as its new entertainment president. (LA Times )
• Sling Media is expected to miss its second quarter goal of releasing SlingCatcher — a set-top box that brings video content from a Slingbox to another TV in a house, or from an external hard drive. (CNET )

(Photo: Reuters)

If CBS tosses its news operation and channels that of CNN, would you care? That conundrum brings to mind a tough question for the media industry as a whole: content may be king, but does brand matter, especially with news?

The New York Times says executives from CBS and Time Warner have discussed reducing CBS’s news-gathering capacity while keeping its top personalities, such as Katie Couric, and paying a fee to buy CNN’s news feeds. Or CBS might keep its correspondents in certain regions but pair them with CNN crews. Anchors like Anderson Cooper already appear on both networks.

Variety says insiders at the two companies “downplayed” the report.

Sure broadcasting legends like Fred Friendly and William Paley may be turning in their graves, but in a world of declining viewership for network news and increased popularity of news consumed on the Web or mobile devices with aggregators like Drudge and Google News, one wonders if this is a smart cost-cutting move for CBS. CBS news is mired in last place amid the continuing struggles of Couric, who was given a $15 million a year contract, to attract new viewers, the Times said.

UPDATE: CBS News officially denies there are ongoing negotiations with CNN.   CBS News spokeswoman Sandy Genelius:  “We’re extremely satisfied with and proud of our news gathering operation. No outside arrangements are being negotiated.” 

(New York Times)

Keep an eye on:

• Entrepreneur Media is up for sale — the first round of bids are over and it hopes to get around $200 million. (PaidContent)
• Facebook is close to settling a lawsuit brought by three former Harvard students who say the original idea for the social networking site was theirs. (NY Times)
• Hollywood studios urge the Screen Actors Guild to embrace the framework of the earlier deals reached with the directors and screenwriters unions. (Reuters)
• An online advertising network owned by News Corp, Fox Networks, has bought a majority stake in European video ad network Utarget as part of a move to expand in Europe and Asia. (Reuters)

(Photo: Reuters)

“Dear Steve, it’s us, the Yahoo Guys again. Thanks for that whole deal deadline thing. Listen, our business is doing just fine. If you want to talk some more about acquiring us, $ay $omething we haven’t already heard, OK? Thanks. Jerry.”

The letter from Yahoo’s board released on Monday said the Web media company still isn’t pleased with Microsoft’s $31 a share offer, but hey, that doesn’t mean they can’t work something out, you know, for more money.

“We have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.”

Blogger Henry Blodget interprets the letter as essentially urging Microsoft to “Stop Distorting Truth” and “We’re happy to sell to you, but we’re not going to allow you to steal the company.”

(Reuters)

Keep an eye on:

• Yahoo’s AMP aims to simplify the process of buying and selling online ads for advertisers, ad agencies, fast-growing ad trading networks and Web site publishers. (Reuters)
• Viacom’s Sumner Redstone’s frayed relationship with his daughter makes the issue of who will succeed him as controlling shareholder - a question that hovers over the future of Viacom and CBS - difficult. (New York Times)
• Nielsen will acquire IAG Research, which measures how consumers react to TV shows, commercials and product placements, for $225 million. (PaidContent )

(Photo: Reuters file)

The good news on ad spending ain’t so good. According to ZenithOptimedia, spending on advertising in North America and Western Europe is expected to grow by 3.8 percent this year. But that is lower than an earlier forecast of 4.4 percent, as the credit crunch saps confidence.

This comes after Carat, the media network owned by UK group Aegis, earlier this month cut its own forecast for growth in global ad spending in 2008 to 6 percent from 6.2 percent.

An even more grim reality: Ad agencies are prepping for a recession.

The silver lining is online, of course, but it may not last. Zenith sees U.S. online ad spending growing 23.4 percent this year to $47.5 billion, an upgrade from the 19 percent forecast in December, amid the continued shift from traditional media to interactive. But it downgraded its 2009 forecast for online to 15.8 percent growth.

(Reuters)

Keep an eye on:

• Sony Pictures Television is looking to launch the first movie network on mobile phones in the United States, and has signed a deal with AT&T and MediaFLO USA to launch in May. (Hollywood Reporter)
• Microsoft and a company headed by Peter Safran, the veteran Hollywood producer and talent manager, have agreed to produce original shows for distribution on the Xbox 360 game system. (New York Times)
• More than 100 staff at Newsweek have accepted a buyout last week, including many senior editors and researchers. (Radar Online)
• Microsoft - Yahoo: No News is good news? (AllThingsD via Silicon Alley Insider)
• Live Nation lands 12-year digital branding, touring and merchandising pact with U2. (Reuters)

(Photo: Reuters file)

Is Digg.com for sale?Even though founder Kevin Rose told CNET last month that the answer is “no”, today the answer appears to be “yes”.According to TechCrunch, Google and Microsoft may be prepared to fight over the popular Web site, which lets readers recommend articles to others.Digg has been working with investment bank Allen & Co, and is pitching big tech and media companies on a sale. It is even prepared to take less than the $300 million suggested late last year, TechCrunch said.Four companies, including Internet giants Google and Microsoft, are in heavy due diligence with Digg. The other two are media or news companies, TechCrunch said, adding that Google will likely bid $200-$225 million, which Digg would likely accept. Is Barry Diller’s IAC interested?TechCrunch expects a bidding war between Microsoft and Google.It wouldn’t be the first time they have butt heads over Digg. Last summer, Microsoft became the exclusive provider of display and contextual advertising on Digg.com, replacing Google.Then again, Silicon Alley Insider suggests that any offer over $100 million might be too much.Update: Digg CEO Jay Adelson speaks out on the company’s blog:

Normally our policy is to not comment about things like this, but this morning’s rumors about a bidding war involving Google and Microsoft have created such a stir we feel compelled to tell you all directly that they are completely inaccurate.Sorry to burst any drama theories, but they aren’t true. We remain focused on improving Digg and rolling out great features.

Alleyinsider’s Peter Kafka remains a bit skeptical over Adelson’s comments.(TechCrunch )Keep an eye on:

• Microsoft’s Steve Ballmer pledged the company would gain share against Google in online advertising and Web searching, even if it’s his “last breath” at the company. (Reuters)
• The board of National Public Radio its said chief executive, Ken Stern, was leaving after less than 18 months “by mutual agreement.” (NYT)

(Photo: Digg.com founder Kevin Rose, Digg.com)

Microsoft’s Steve Ballmer still wants Yahoo and he may be ready to empty his wallet to pay for it.

Microsoft is considering changing its offer to all-cash as a way to woo Yahoo shareholders and nudge its board, according to the New York Post.

Such a move would bump the offer value back to $31, up from the current $28.87, according to Henry Blodget’s AlleyInsider.

But the Wall Street Journal’s Kara Swisher suggests that Yahoo may be holding out for a higher price or hope that Microsoft CEO Steve Ballmer changes his mind altogether and go find another deal.

(New York Post)

Keep an eye on:

• Google is expected to receive unconditional approval from European Union regulators next week for its $3.1 billion takeover of DoubleClick. (Reuters )
• Walt Disney’s cartoon TV show characters “Lilo and Stitch” are about to land in Japan, with the U.S. company planning a Japanese version of the show in a hunt for more Asian viewers. (Reuters)
• Ziff Davis Media Files for Bankruptcy. (AP)
• The owner of Penthouse magazine plans to hit up Wall Street this year for $250 million as it cleans up its act and aims to make a name for itself on the Internet. (Reuters)
• U.S. Sen. Byron Dorgan, a critic of media consolidation, who has complained that the FCC did not do enough to get public comment before it approved the new rules in December, introduced a resolution aimed at overturning a decision by regulators that loosened media ownership restrictions in the 20 biggest U.S. cities. (Reuters)
• Lachlan Murdoch’s estimated $3.1 billion purchase of Australia’s Consolidated Media Holdings stumbles after one of his chief backers SPO Partners drop out. (FT)

(Photo: Reuters)

The group advocating “bold” change at the New York Times is not backing down from its challenge to the newspaper publisher’s digital strategy.

With the New York Times’s annual meeting about 7 weeks away, a dissident investor group formed by Harbinger Capital Partners and Firebrand Partners, boasting a 19 percent stake, is now the largest public shareholder in the Times. The group has had talks with the Times’s management about new nominees to the board, but neither side appears to have budged and today they issued their preliminary proxy to recruit shareholder support for the alternate slate. (The hopeful board members are: Scott Galloway, James Kohlberg, Allen Morgan and Gregory Shove.)

Call it an issue of timing, but the Times also put out its monthly revenue statement showing print advertising down by a lot, while Internet revenue is still growing at a healthy pace. For now, Wall Street seems to think the Times is doing what it should to make a careful transition into digital, but who knows whether that tide will turn?

(Reuters )

Keep an eye on:

• Take-Two Interactive Software’s CEO said on Tuesday that major shareholders support the video game publisher’s decision to reject a $1.9 billion takeover bid by Electronic Arts Inc, which they see as “woefully low.” Take-Two also said it has received interest from others. (Reuters)
• Newsday eliminates about 120 jobs in its newsroom. (Romenesko)(New York Post )
• Advertising services company Interpublic Group reported quarterly profit that more than tripled from the prior year and said it reached compliance with Sarbanes-Oxley standards. (Reuters)
• The head of French media conglomerate Vivendi said it was legitimate for Vivendi to look at other companies such as Germany’s largest pay-TV broadcaster Premiere. (Reuters)

(Photo: NewYorkTimes.com)

Where are all the good vibes in technology these days?  

In the latest takeover bid, U.S. video game publisher Electronic Arts is trying to buy rival Take-Two Interactive Software, best known for its “Grand Theft Auto” title,  for about $2 billion in cash. The $26-per-share offer by Electronic Arts, publisher of blockbuster games like “Madden” and “Need for Speed,” represents a 50 percent premium to Take-Two’s  Friday closing stock price of $17.36.

The sticking point is that Take-Two rejected the offer, calling it “inadequate” and complaining that it valued the company at a “significant discount” to peers. EA’s offer comes right ahead of the April 30 launch of the latest “Grand Theft” sequel.

This bid is not exactly out of the blue — for months Wall Street has speculated that Take-Two would be acquired by a major games publisher or media company. And were it to be consummated, it would be the most significant video game deal since Activision in November agreed to pay $18 billion for the gaming unit of Vivendi.

But like Microsoft-Yahoo,  it seems this takeover won’t be a warm and fuzzy affair. For a long time, technology deals were almost exclusively friendly; executives worried that anything less would just cause bad blood and result in top talent jumping ship.

So much for that.  EA Chief Financial Officer Warren Jenson said the company would consider a possible hostile bid for Take-Two. “Our objective is to make this a friendly deal, but we have to keep all options open,” he said.

As for Take-Two,  Chairman Strauss Zelnick said, “We didn’t slam the door, we just said ‘Look, the price is not right and the time is wrong.’”

Let the games begin.

(Reuters)

Keep an eye on:

• Sony said Phil Harrison, president of Sony Computer Entertainment Worldwide Studios, the game software development arm of Sony’s videogame division, will resign on February 29. (Reuters)
• The violent drama “No Country For Old Men” won four Academy Awards on Sunday, more than any other film, including best movie, director and adapted screenplay for brothers Joel and Ethan Coen. (Reuters )

(Photo: Reuters)

Google’s long-awaited plans to bring the ease of its paid search listings to advertising on Web video is finally underway, aiming to do for video what it has done for text.

Ad spending on video ads has been a small fraction of the overall Internet ad pie, but building a bridge to Google’s massive ad network could change that. The program gives publishers the ability to choose which ads go with which video and where the ads play during the clip.

Google’s AdSense for video kicked off in beta on Thursday with 20 partners including Brightcove, YuMe, and Blip.tv.
(New York Times)

Keep an eye on:

• Hollywood directors gave their final stamp of approval on Wednesday to a contract deal that helped pave the way for a settlement of the damaging 101-day strike by screenwriters against film and TV studios. The three-year pact between the studios and the Directors Guild of America (DGA) was endorsed by an overwhelming majority of union members. (Reuters)
• News Corp, Yahoo discussions continue. Still no official bid. (TechCrunch)
• Paramount quietly backs Sony’s Blu-ray. (Hollywood Reporter via Reuters)

(Photo: Google AdSense blog)