MediaFile

from Shop Talk:

European ruling makes it tougher on Google advertisers

All eyes are on China this week as Google watchers assess its potential risk in that fast-growing market. But across the globe in Europe, the world's most-used search engine is grappling also with the possible  fallout  from a spat over its advertising model.
 
The company scored a victory in Europe's top court on Tuesday over the legitimacy of its Adwords system, with a ruling that found Google does not infringe trademark law by selling to advertisers keywords that trigger paid ads.
 
The case, in which one plaintiff was luxury brand LVMH, was seen as a major challenge to Google's business model. LVMH -- the purveyors of all things Louis Vuitton --  argued it sought to protect brand holders' trademarks in the digital age. 
 
Yet despite the victory, as Reuters pointed out last week, the world's largest search engine is still not out of the woods. Some warn that Google could see its ad revenue slide if advertisers pull out of Adwords, concerned they could be found liable in future for trademark violations. 
 
That's because brand owners can now take up claims against advertisers who use their trademarks to confuse consumers, according to the court, which said Google  too may be liable if the company actively manipulates keywords or fails to act on legitimate complaints.

"Google's legal victory may prove to be a little hollow," wrote Eric Goldman, an associate professor of law at Santa Clara University School of Law in a blog this week. "It could still see revenue contraction if advertisers are dissuaded by their legal exposure."
 
Will advertisers, who depend on the exposure from Google's powerful search engine, balk? Goldman points out that trademark owners still have an arsenal of legal options to throw at advertisers, from legislative changes to going after advertisers one by one. 

LVMH, in a statement, acknowledged that the court's ruling did not test Google's business model. But it said the decision would make it easier for brand owners to combat illicit use of registered trademarks.

from DealZone:

Comcast: the antitrust sequel and the M&A trilogy

If you were all twitchy with anticipation about Comcast's NBC Universal deal, just wait for parts two and three! The gathering storm over the merger in Washington and other political power points not only promises to be more riveting, but the rights to part three are already being sold to a wave of media mergers hanging on the outcome.

As Anupreeta Das reports, media dealmaking could pick up if regulators impose minimal conditions on the NBC Universal transaction. But U.S. regulatory scrutiny is expected to be heavy, and the deal could take more than a year to be cleared. The LegalTimes blog notes that even the beauty contest among regulators hoping to oversee the process promises to have many twists and turns.

That might sound like a long wait, but it's not likely to stop M&A lawyers from booking lunches and logging hours to get the balls in place to roll if the deal goes through. That kind or pressure could also work its way behind the scenes in Washington, where lobbyists will be armed with the argument that the merger will save capitalism as we know it by reigniting the dealmaking powderkeg of the early part of this century.

Amazon sparks digital ownership debate

“Orwell fans, lock your doors,” was the reaction from Amazon user Caffeine Queen after she and others had received notice from Amazon last Friday that their e-book versions of “1984″ and “Animal Farm” had been removed from their Kindle device.

Amazon explained later that these electronic versions were distributed illegally and that customers were refunded.

Amazon’s decision to remotely delete the e-books not only infuriated customers, it sparked a debate on digital ownership.

Comcast AGM: Everybody hates Brian

brianrobertslooks-back.jpg

Comcast, the largest U.S. cable TV operator, might have had a strong first quarter, started paying a dividend, and even be able to claim to be one of the best performing stocks in 2008 in its sector – but CEO Brian Roberts still couldn’t catch a break from shareholders at Wednesday’s annual general meeting.

Worker unions pointed out Roberts gets paid 964 times the average non-supervisory Comcast worker, while a shareholder advisory group demanded (as usual) that the company adopts a one-share one-vote structure and drops the 33-percent voting rights Roberts currently holds under the dual shares structure.

But worst of all for Roberts was the presence of Evelyn Davis, 78, the self proclaimed Queen of the corporate jungle, who dominated proceedings as usual by haranguing management over various obvious and sometimes obscure details about the business.

Malone, Diller and the story that ended the affair

maffei-sun-valley.jpgMedia titans John Malone and Barry Diller knew they had their fair share of disagreements over the years, but like many couples heading to divorce, they apparently needed someone else to tell them that.

Enter Wall Street Journal reporter Jessica Vascellaro.

The media industry read with rapt interest her story in October that put in plain language how much tension had built up between the two over their partnership in IAC/InterActiveCorp. 

But as the two moguls duke it out in Delaware court this week, they keep invoking that story, day after day, as the moment that sent their relationship past the point of no return. 

Did Greg get between John and Barry?

malone-arrives.jpgJohn Malone is famous in the media industry for his complex deal-making skills that have confounded some of the best minds in business. But he seemed almost forlorn in Delaware court today when talking about the unraveling of his relationship with Barry Diller, the former television and film honcho who built up IAC/InterActiveCorp with his backing.About halfway through a rigorous cross examination by Marc Wolinsky, who was representing IAC, Malone’s responses gave us the impression that his lieutenant and CEO Greg Maffei had a hand in precipitating a difficult business dispute into all-out war. Here are some chapter headings from his direct testimony and cross-examination:The tension dates years back to Maffei’s role in Expedia’s sale to IAC. When Maffei was appointed CEO of Liberty Media in 2005, Malone said Diller branded it a “poor choice.”“I knew there was a history. I knew that Barry was complaining that there was no cooperation between Expedia and Hotels.com … he thought that was wrong. I’m not sure I was aware of any personality difference until much later.”By 2006, Maffei was making comments that questioned the solidity of Diller’s control over IAC, under a proxy agreement to vote Liberty shares. Barry had some feelings about that.“Mr Diller was very unhappy or upset that Mr Maffei would make these … claims or references, anything that would undermine his confidence that he had the voting power.”When Maffei and Liberty counsel suggested a way to weaken Diller’s proxy, Malone said he objected.“I told them that I regarded it as brain damage. (So what did you do when Maffei persisted in his argument?) I would assume that he has something in mind in terms of it being a viable legal argument, or because our lawyers are telling him they believe it’s a valuable and appropriate legal position.”By late 2007, Maffei took a more aggressive stance when it came to pushing Diller to compensate Liberty for the declining value of its IAC stake, Malone said.“I would say Mr Maffei believed it was in the interest of Liberty to try and separate our interests from IAC and Expedia. I think Mr Maffei can be pugilistic where these issues are concerned.”Because at the end of the day, Malone would be happy to make up with good ol’ Barry. Asked if he preferred to litigate their dispute in Colorado rather than Delaware, he said:“I didn’t want to have to sue Mr. Diller anywhere. I still hold him no ill-will and I still seek a win-win solution for our disputes. I don’t think any of us likes that we are having an open dispute after 13, 14 years of building value together.”Cue one Denver sunset please.(Photo: Reuters/John Randolph/ Liberty Media Corporation Chairman John Malone returns to Chancery court in Wilmington Delaware)