Walt Disney's $4 billion offer for Marvel Entertainment would give it more than 5,000 comic book characters, including such mighty heroes as Iron Man, Spider-Man, and the Fantastic Four. Disney's Bob Iger told CNBC that the expanded roster will help bring more boys to the home of the Magic Kingdom, where Snow White, Cinderella and the Little Mermaid have long reigned supreme.

The cash and stock deal values Marvel at $50 per share, or a premium of 29 percent to Marvel's closing stock price of $38.65 on Friday. The deal has been approved by the boards of both companies, and since Marvel's CEO, Isaac Perlmutter, is also the largest shareholder of the company, it's likely a done deal.

Marvel's second quarter was a mighty one. It beat market estimates on strong DVD and pay TV sales of "Iron Man," sending its shares to an all-time high. This year has been a lull for Marvel, with no new film releases due until 2010, when Iron Man 2 hits screens. Thor and the first Avenger movie, as well as Sony-produced "Spider-Man 4," are slated for a 2011 release and an "Avengers" sequel is due in 2012.

Is this a game changer for Disney's foes? Marvel rival DC Comics, with its stable of Batman, Watchmen and other, darker comic champions, is already a part of Time Warner. For the fantastic leap comic books have made to the big screen, this could be the last hurrah.

Media moguls and executives at Sun Valley spend a lot of time talking about how to best prepare for the challenges of Web and mobile disruption in the 21st Century.

Companies that once traded and leveraged their huge size and scale of distribution are now considering whether just being bigger might not necessarily be better in the new fragmented media world.

For example, Time Warner Inc is slimming down by spinning off its Time Warner Cable unit and AOL, its Internet division. It may also look to rid itself of its Time Inc publishing unit.

“The notion that there are synergies between content and distribution has been dispelled,” says Tuna Amobi, an equity analyst at Standard & Poor’s. “You’re not going to see a Comcast Corp trying to merge with a Disney anymore.”

Not everyone agrees. Sony Corp remains one of the world’s largest companies with major interests in a global empire that spans music, movies, video games, software, mobile phones and consumer electronics.

Sony Chief Executive Howard Stringer said in an interview with Reuters that it had become more important to be able to integrate and leverage its different units. “We wouldn’t have been able to win the Blu-Ray war if we didn’t have content,” he said.

“You can’t create this in a vacuum any more. You have to have a relationship. You don’t have to own something, but obviously if you own something you have a leg up.

Time Warner-owned celebrity news website TMZ may have been first in reporting the death of Michael Jackson, but is all the buzz around the site going to turn into cash?

It’s a question the LA Times asks in this article, pointing out that the Jackson scoop — the biggest in TMZ’s history — comes at a time when the TMZ’s tactics and “tabloid sensibilities” have angered publicists and government officials, made other journalists reluctant to cite TMZ, and even caused advertisers to shy away from putting their messages on the site.

In a piece last Friday, The New York Times’ Brian Stelter pointed out that even though TMZ looks good because it beat all rivals with the Jackson news, the “Jackson family said the time of death was 5:26 p.m. Eastern, several minutes after TMZ’s report, leading some to wonder whether the Web site looked accurate only in hindsight.”

TMZ editor-in-chief Harvey Levin told the Times their report was 100 percent accurate. He also said the site pays “tip fees” that lead to stories, but did not say whether they paid any sources for the Jackson news.

As the LA Times story by Scott Collins and Meg James says, one of the reasons why the site makes people — especially other reporters — uncomfortable is “a sense that TMZ is flouting not so much the law as journalistic ethics. Rivals have consistently accused Levin and company of paying for information.”

So despite the site’s record of getting big celebrity news and the claims that TMZ’s scoop represents the triumph of new media over old, it’s not immediately clear that Time Warner will begin to make a ton of money off this asset. TMZ is a joint venture between AOL and Telepictures.

Keep an eye on:

• Microsoft wants to sell Razorfish. Who wants to buy? (Financial Times)
• Advertising on mobile networks will take off in the next 2-3 years (Reuters)
• Google says, we aren’t so big, really. (The New York Times)

Photo: Reuters

We sprinkled updates into this blog. We’re highlighting them like this.

Thanks to TechCrunch, U.S. tech reporters are about to spend another weekend working instead of playing. UPDATE: Or maybe Kara Swisher at All Things D will save them!

Two sources told proprietor Michael Arrington that Google “is in late stage negotiations to acquire Twitter.” He wrote:

We don’t know the price but can assume its well, well north of the $250 million valuation that they saw in their recent funding.

Twitter turned down an offer to be bought by Facebook just a few months ago for half a billion dollars, although that was based partially on overvalued Facebook stock. Google would be paying in cash and/or publicly valued stock, which is equivalent to cash. So whatever the final acquisition value might be, it can’t be compared apples-to-apples with the Facebook deal.

Why would Google want Twitter? We’ve been arguing for some time that Twitter’s real value is in search. It holds the keys to the best real time database and search engine on the Internet, and Google doesn’t even have a horse in the game.

Later, he updated his entry to say that another source told him talks are at an early stage and could amount to a deal to build a Google real-time search engine. Who knows how this one will shake out. Web operations like Twitter can’t get popular without people starting to fit puzzle pieces together to see which company ought to buy them. That might be why The San Francisco Business Times picked up Wired and Industry Standard founder John Battelle’s blog entry that Twitter would go to Rupert Murdoch’s News Corp for $750 million. Turns out it was an April Fool’s joke.

Then Swisher at All Things D said this:

While the “news” that Google was in “late-stage” talks to acquire Twitter, which TechCrunch reported last night, certainly sounds exciting, it isn’t accurate in any way, according to a number of sources BoomTown spoke to close to the situation.

She also covered herself with a “to-be-sure graf,” as hacks like me call them:

Google or anyone else could plunk down more than $1 billion in cash and I cannot imagine Twitter’s investors would or could resist. Nor should they. And, what if, for example, Microsoft (MSFT) offered some huge cash payday for Twitter? In that case, I am certain Google would jump into the face-off, backing up a giant Brinks trunk to the door of Twitter’s San Francisco offices.

Afterward, everyone scratched their heads and ruminated mightily about this very important situation. TechCrunch, meanwhile, stands by its story, a blogger there told us.

Will Google announce plans to buy Twitter in 2009?

Keep an eye on:

• MediaNews Group, the Denver-based newspaper publisher run by legendary hyper-acquirer “Lean Dean” Singleton, worked out a deal with creditors on paying off its heavy debt that Singleton put on the company as he bought and bought and bought newspapers (before slashing and slashing their budgets and staff). And he said bankruptcy wasn’t an issue. (The New York Times)
• Some people who work with him have told me that New York Times Executive Editor Bill Keller comes off as arrogant, but he’s actually shy. This is the same shy man who at Stanford University on Thursday said CNN’s reporting has been replaced by juries of commentators who work on a set that looks like a parody of a Daily Show parody of a news set. He also said saving The New York Times ranks with saving Darfur as a high-minded cause. From my own interactions with Keller, I would conclude that he’s a deadpan comic, not shy. (Politico)
• TMZ.com is devoting more money to reporting gossip from Washington, D.C. Why flack this now? Is it because parent company Time Warner is geeking out at the cable show in DC this week? Maybe TMZ’s Harvey Levin bunked up with Time Warner Chief Executive Jeff Bewkes to save money in the downturn. OK, maybe not. (Reuters)
• In case you didn’t know already, you should not get news for free online. Rupert said so. (Please ignore this free blog entry on this free website). It shouldn’t work for online TV either, said Discovery Chief Executive David Zaslav. (PaidContent)

(Photo: Reuters)

Guess where the paparazzi are training their lenses these days? For those of you who missed it, The New York Times writes that gossip rags have all but abandoned Britney Spears for the thrill of capturing corporate excesses on camera. From the paper:

The tabloid media, of course, have always peered into the excesses of the rich and famous with a mix of puritan disapproval and voyeurism. But these outlets and other news organizations are now recording troubling uses of taxpayer money at country clubs, private airports and glamorous retreats and, in so doing, explicitly tapping into a fierce populist anger at corporate America, and even pressuring Congress to hold companies accountable.

Populist indignation apart, perhaps people also feel a sense of glee when watching or reading about the severe scaling back of corporate budgets that once supported lavish lifestyles. Gawker may have captured the glee best in this biting account of The Wall Street Journal story on Goldman Sachs executives being asked to stay at Embassy Suites rather than the Ritz.

Reporters are often sent to capture nuggets of corporate excess, the more outrageous the better. An affinity for $40 crab legs? Flying to DC in private jets to ask for bailout money? Poolside sales conferences with six-figure tabs? The media loves writing about this stuff almost as much as people enjoy reading it. So if you’ve got any tips, let us know.

Keep an eye on:

• New AOL CEO Tim Armstrong sees a lot of options for AOL’s future. (All Things Digital)
• Alibaba seeks partnerships with U.S. companies. (Reuters)
• Carl Icahn says he doesn’t intend to push for a sale of Lions Gate. (Reuters)

(Photo: Reuters)

It’s been less than a week since Google reset the price of employee stock options in order to provide “better incentives for employees to remain at Google.”

Apparently Google’s President of Americas Operations Tim Armstrong didn’t get the memo.

On Thursday, Time Warner announced that Armstrong is leaving the Googleplex to take the top job as CEO of AOL.

Armstrong is one of the highest-ranking Googlers to jump ship in Google’s history. Last year, Sheryl Sandberg, who was VP of online sales and operations, moved to social networking site Facebook, though analysts scratched their heads to think of any other defections of that magnitude.

Like Sandberg, Armstrong had been at Google since before its monster 2004 IPO, meaning that most of his stock options with pre-IPO prices have likely vested — at a significant profit — by now.

The potential payoff for options granted in recent years may prove more modest. Google recently said that 85% of its employee stock options were “underwater,” meaning that the exercise price was higher than the actual market price. That’s why the company allowed workers and executives to swap underwater options for new options with a strike price of $308.57, the closing price last Friday.

Of course, the newly priced options tack an extra year on to the vesting schedule.

For Armstrong at least, the new set of golden handcuffs weren’t strong enough.

(Photo courtesy of Google)

Current valuations for media companies must have opened up some opportunities for dealmaking, right? It’s hard to argue that things aren’t getting cheap.

Well, two of the industry’s top dogs, Viacom CEO Philippe Dauman and Time Warner CEO Jeff Bewkes, seem to have differing views on whether the media meltdown makes for a good time to wheel and deal. Both were asked about it during presentations at the Deutsche Bank Annual Media & Telecommunications Conference.

Dauman said Viacom, owner of MTV and Paramount, wants to focus on internal growth, mentioning Nickelodeon’s international expansion and the Colors television channel in India. “I continue to believe that we are better off investing in growing our own brands than spending significant money on acquisitions,” he said “I don’t see our using huge dollars to make an acquisition anytime soon.”

Bewkes left the door slightly more ajar. He said a lot of the assets or companies out there — “you can fill in the usual suspects” — have previously been way overpriced. “Up ’til now, those things have been around at prices that just don’t provide a return,” he said.

Deals may now make more sense. “We have room for acquisitions if there are real opportunities out there that don’t represent stupid prices or acquisitions risks,” he said when asked if they were on the prowl.

Time Warner, of course, knows a thing of two about stupid prices and acquisition risks.

Speaking of which… Not surprisingly, Bewkes was asked about AOL. He provided fairly stock answers, saying he was disappointed in ad sales and would still consider a deal for the troubled web business. “We always remain open for scale combinations that put any of our businesses in a better position,” he said. “We remain open to that.”

(Photo: Reuters)

Far be it for us to be the umpteenth person to assail Wired editor Chris Anderson’s much quoted and yet much maligned book, The Long Tail, but Time Warner would rather keep churning out more “Dark Knights” and “Harry Potters” than fiddling down its long tail, thank you very much

The Long Tail, as you may recall, argues that thanks to the digitization of content and much lower cost of distribution, content producers will see more of their sales and profits being generated by niche content i.e. the long tail of their sales graph.

But Time Warner, by many measures the world’s largest media company, says that while it is seeing more niche content sales, it would rather the humongous profits you can make with a super hit like “The Dark Knight.”

The executive charged with minding the tills,  Chief Financial Officer John Martin, told a Citi investor conference that the future of Time Warner is in the big hits — even on digital outlets like iTunes, where he said it is beginning to see sales trends getting closer to the physical stores’ with their focus on blockbusters.

As consumers have more flexibility and more control over the way they actually consume media, we see more and more of the usage going to the long tail niche content and more and more of the usage going to the long tail and more and more of the usage moving to the very very biggest hits and the biggest brands and that’s really the space we’re playing in.

Martin said his company, which owns cable networks CNN and HBO,  magazines like Time and Sports Illustrated, and movie studio Warner Bros, is seeing evidence of an increasing affinity for hits across all areas of its business.

Fewer and fewer DVDs account for more and more of sales according to Martin, the same thing is seen in magazine subscriptions with the top titles growing while some of the smaller titles slow down and more Top 10 shows are being recorded on DVRs by cable subscribers.

(Photo: Reuters)

Christmas was good to Hollywood.

The top holiday movie, “Marley & Me,” sold an estimated $37 million worth of tickets during the traditional three-day weekend beginning on Friday, and overall Christmas Day sales reached $75 million, up about $10 million from last year.

While that’s good news, particularly during the downturn, it won’t be nearly enough to salvage an otherwise rough year in the movie business, as Reuters points out.

Still, Hollywood is on course for a down year. With three days left, year-to-date sales are off about 1 percent at $9.5 billion, while the number of tickets sold has slid 5.2 percent, Media By Numbers said.

“Bedtime Stories” was No. 2 for the weekend with $28.1 million and its Christmas Day haul of $10.5 million drove its total to $38.6 million, said Walt Disney Pictures. Sandler plays a man whose bedtime stories come true in real life.

“Benjamin Button,” in which Pitt’s character ages backward, did better on Christmas Day with a $12 million opening. Its weekend tally of $27 million took its total to $39 million, said Paramount Pictures.

The adaptation of an F. Scott Fitzgerald short story has racked up five nominations from the Golden Globes and eight from the Critics Choice Awards. Women accounted for 60 percent of the audience and 70 percent of ticket buyers were over the age of 25, Paramount said.

Tom Cruise’s fact-based thriller “Valkyrie,” about a failed plot to kill Adolf Hitler, opened at No. 4 with $21.5 million for the weekend and $30 million for the four days — much better than skeptics had predicted. The United Artists movie has been plagued by bad publicity and shifting release dates.

“We had obstacles to overcome,” said Erik Lomis, head of worldwide distribution at the studio’s closely held Metro-Goldwyn-Mayer parent. “But the movie speaks for itself.”

Keep an eye on:

• A top advertising researcher says U.S. ad spending actually fell in full-year 2007, with bigger drops seen in 2008 and expected in 2009. If true, it would mark the first three-year decline since the Great Depression (AdAge)
• The premiere episode of HBO’s offbeat comedy “Flight of the Conchords” has drawn 250,000 streams in its first 10 days on FunnyOrDie (The Hollywood Reporter)
• Stuart Elliott, of the New York Times, recaps the best and worst of advertising for 2008 (NYTimes)

(Photo: Reuters)

Today’s a key day for Time Warner. Despite all the worries about a downturn in advertising and consumer spending, the media company managed to post higher-than-expected results. What helped? The summer blockbuster “The Dark Knight” for certain, as well as CNN.

Strength at CNN shouldn’t come as too much of a surprise given the closely followed U.S. presidential election. But some of the numbers are nonetheless pretty impressive: for example, CNN.com yesterday saw 27 million unique visitors and 276 million page views. Compare that to normal traffic of about 35 million page views.

Here at MediaFile, we just wish we could have demonstrated all of this noteworthy news with a Magic Wall or Hologram.

Keep an eye on:

• Demand for last-minute television ad time is falling sharply (NY Post)
• NBC’s “Saturday Night Live” and Comedy Central’s “Daily Show” were among the big winners in the presidential campaign (AdAge)
• U.S. News & World Report has decided to become a monthly magazine (NY Times)

(Photo: Reuters)