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Keep an eye on: Diller vs. Malone

Barry Diller versus John Malone: Professional boxing wishes it had a heavyweight battle like this media matchup.Diller’s IAC/InterActiveCorp has sued its controlling shareholder, Malone’s Liberty Media, in a dispute that threatens the Internet conglomerate’s spin-off plans.IAC and Diller asked a Delaware Chancery Court to rule that the spin-off may go forward as unanimously approved by IAC’s board, which includes Liberty Media Chairman John Malone.Liberty countersued, accusing Diller and IAC’s board of structuring the spin-off to 'wrest eventual control of IAC’s businesses away from Liberty” by diluting its voting power to just under 30 percent from nearly 62 percent. Liberty asked the court to stop the proposed IAC spin-off, to find that Diller and the IAC board of directors breached their fiduciary duties, and to award damages to Liberty.Diller has long held the right to vote Liberty Media’s IAC shares, and he said in the lawsuit that he intended to vote all of those shares in favor of the board-approved spin off. Malone wants the companies to maintain a tiered structure and aims to control each of the newly formed companies.MediaFile has previously noted that anything could happen before the spin-off, and now that seems even more true.(Reuters)(PaidContent)Keep an eye on:Global digital music sales rose to $2.9 billion last year, from $2.1 billion a year earlier, making up about 15 percent of total sales, the International Federation of the Phonographic Industry said. (New York Times) (Reuters)The long-anticipated auction of wireless airwaves in the 700 Mhz frequency range kicked off with top (secret) bidders putting up almost $2.78 billion between them. Google, EchoStar and Cablevision qualified to bid along with the usual wireless suspects AT&T and Verizon Wireless. (Reuters) (GigaOm)Eric Feng, the CTO of Hulu, says the online video service has several hundred thousand users; has tripled its amount of content since private beta launch; and expects high definition video will be rolled out gradually over the coming year. (TechCrunch)(Photo: Reuters file)

Keep an eye on: Qtrax backtracks

File it under half-baked.Qtrax, the latest Internet service that aims to roil/save the music industry by offering music sharing for free on an advertising-supported basis, ran into snags even before launching, according to Silicon Alley Insider and other reports.Stories about the Monday launch of the file-sharing service hit the wires and newspapers on Sunday. But before the day was out, the denials started coming in. Did Qtrax neglect to mention it has yet to actually land deals with Universal Music Group and Warner Music? The LA Times also reported Qtrax didn’t have a deal with EMI either. The jury’s still out on Sony BMG, as they haven’t returned reporters calls yet.Qtrax execs tell the LA Times deals have already 'been made.” An unnamed Universal source is telling reporters they are 'close” to coming to terms. Warner is flat out denying there’s a deal.Couldn’t this announcement have been made a week later? Bizarre media strategy for a media company.(Silicon Alley Insider) (LATimes)Keep an eye on:Just a few weeks after Warner Bros threw its support behind Sony’s Blu-ray next generation DVD format, NPD is already reporting soaring sales of Blu-ray players, while HD-DVD player sales plummet. (PC World)New York Times faces another attack from shareholders. This time it’s Harbinger Capital Partners and Firebrand Partners, who seek to boost its stake in the company. (paidContent)Gawker’s Nick Denton refuses to take down a Church of Scientology internal video of Tom Cruise rhapsodizing about his religion. (NY Times)Sony Ericsson cuts deal with 10 music labels to add content to its PlayNow mobile music service. (Reuters)

Keep an eye on: Still on Diller vs. Malone

With friends like Liberty Media Chairman John Malone who needsenemies? He’s ratcheted up his duel with long-time pal and business partner Barry Diller, chair of IAC/InterActiveCorp by asking a court to remove Diller, his wife Diane Von Furstenberg, Edgar Bronfman Jr (Warner Music CEO) and several other directors from the IAC board.The problem? Well as Liberty sees it those board members are breaching their fiduciary duty with a plan to dilute Liberty’s voting control over IAC’s businesses in a proposed spin-off of four of its largest units.You may recall Liberty owns nearly 30 percent of IAC but has almost 62 percent voting control, which Diller has the right to vote.Naturally as one mogul to another Diller has reacted with typicalbombastic stylein a statement describing Liberty’s attempt to take control of the Internet conglomerate 'preposterous” and 'a desperate sideshow”.'Liberty has now gone off the deep end,” said IAC. See here:Oh and to answer that earlier question about friends and enemies. Maybe Barry Diller should consult News Corp chief Rupert Murdoch who had to give up DirecTV to Malonelast year after his friend came close tothreatening Murdoch’s control of his company by stealth buying of News Corp.’s stock.(Reuters)Keep an eye on:Yahoo’s Q4 earnings will be 'strong” says Henry Blodget. (Silicon Alley Insider)UKregulators askNews Corp’sBSkyB to cut stake in rival broadcaster ITV. (Reuters)The Wall Street Journal could be moving from Wall Street to midtown. (New York Times)

Keep an eye on: Yahoo’s headwinds

On Tuesday Yahoo said it faced 'headwinds” in 2008 and forecast revenue growth below Wall Street expectations and said it would cut1,000 jobs.Hardly blindsided, Wall Street still expected better numbers.On Wednesday morning at leastseven major brokerages cut their price targets onYahoo stock.Yahoo co-founder and Chief Executive Jerry Yang predicted a tough 2008.'While we will continue to face headwinds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash growth in 2009,” he said in a statement.So how might these headwinds mean affect Yahoo’s larger rival in the Web advertising space: Google?Both companies compete in paid search, a form of marketing where advertisers pay when customers click on ads.Googleis scheduled to report its quarterly numbers on Thursday and already some analysts are wondering whether Yahoo’s difficulties are its own or industry-wide impact from a slowing economy.Analysts expect Google to fare better in an economicdownturn with its dominance of paid search says Citigroup analyst Mark Mahaney. But Mahaney rates a Yahoo a 'hold” despite his concerns of Yahoo’s potential to be acquired as well as its 'still very large” Web presence.(Reuters)Keep an eye on:MySpace will launch its program to court outside software developers in February in a bid to widen the gap against rival Facebook. (Reuters)Bidding remained stalled on a key piece of spectrum in the US government’s wireless airwaves auction. (Reuters)British-based educational publisher Pearson has agreed to sell its 50 percent stake in German business daily Financial Times Deutschland to publishing Gruner + Jahr. This gives G+J full control. (Reuters)

Google to media biz: 'It’s not what we do.”

Google VP of Content Partnerships David Eun tries to dial down the fear factor in a media industry fearful the biggest game on the Internet will someday eat its lunch.In a nutshell,the fear is self-pertetuated and”ill-informed” he says.Eun, a former executive at Time Warner and NBC, who now strikes deals with mediacompanies, will be at the Software & Information Industry Association conference on Thursday. IWantMedia’s Patrick Phillips caught up with him ahead of his keynote.Some excerpts:Eun: 'The biggest misconception is that they fear Google has aspirations to become a media company, meaning that we would produce and own content that would compete against theirs. That’s a major misconception. We don’t produce or own content. In fact, we see ourselves as a platform for our partners that do.'The second misconception is that there are some folks who are concerned that we might take their content and do things with it that are not acceptable or legal. Again, that’s not correct. We only work with content in a way that is productive and helpful to our partners.”IWM: A daring prediction that Google would one day buy the New York Times circulated online last week. That proposition is unlikely? Eun: 'Yes. And, frankly, the New York Times is a fantastic partner of ours. And that’s one message that is important for folks to understand.'We have thousands of partnerships. The New York Times, for example, is a partner in the Google AdSense program. We place the ads on their Web site. They have their own ad sales force but we help them sell ads. The Times participates with us in various initiatives. The Times also has a branded channel on YouTube. A lot of people aren’t aware of that.'We feel like we have a great relationship with the Times. We hope that they’re very successful. But what they do as a company - with journalists, news bureaus, thinking about what people want to read, producing a newspaper - that’s not what we do.Wondering if that makes everyone in the media industry feel better. Let us know.Eun is echoing the standard phrasing Google executives use when asked about their appetite for media.CEO Eric Schmidt told a group of Silicon Valley reporters last May at Google headquarters that the company had no interest in acquiring a company like Dow Jones & Co, publisher of the Wall Street Journal. 'We made a decision to focus primarily on user-generated content, and no on businesses where we would own the content,” Schmidt said when asked whether Google might consider bidding against Rupert Murdoch’s News Corp for Dow Jones.(Photo: Reuters)

U.S. mobile porn, big in ‘08?

Mobile porncould be a hit in the United States this year, the pornographers say. But could the 2008 US presidential candidate’s rush to vie for voter love delay its rise from obscurity.Consider, this is the same country where a singer’s career nearly ended after flashing one bare breast on national television.Offering mobile porn could be further complicated after customers and Catholic officialsin Canada, US’s liberal neighbors to the north, condemned the country’s No. 2 phone company Telus, forcing it tostop offering porn on handsets.'It’s hard to overcome stuff like that. When you’re in the adult market place it’s a constant uphill battle,” saysClubJenna President Jay Grdina, who founded the company with hisporn starwife Jenna Jameson and sold it in 2006 to Playboy.Indeed, even the staunchest defenders of freedom of speech admit there are muddy legal issues. For one, US mobile providerscouldface serious legal hurdles if porn on their services ends upin the hands of minors,according to lawyer and adult entertainment specialist Gregory Piccionelli.'The regulatory posture of adult entertainment will always be a matter of some contention because it is so charged with morality and politics,” he said.ClubJenna’s Grdina and Piccionelli said they saw hope in gadgets like iPhone, which can show racy images in all its detailed glory on the device’s 3.5-inch 'multi-touch” display. Piccionelli is so convinced iPhone will go down in history as the device that made mobile porn happen he has stockpiled some devices for posterity.'Finally we’re going to say this is acceptable,” Grdina said.(Photo: Screenshot of ClubJenna.com)

Keep an eye on: Google pact

Another 16 more years to go.Google’s top three executives made an informal pledge ahead of its IPO in 2004 to work together for 20 years, Fortune reports.Co-founders Larry Page, Sergey Brin and CEO Eric Schmidt tells the magazine, which also rated the company as the No. 1 best company to work for this year.Something to think about as Wall Street hammers the company for its anticipated big cash outlays to potentially compete with US wireless operators.(Fortune)Keep an eye on:Fox is expected to rake in $225 million in ad sales on Super Bowl Sunday, at an average of $2.7 million per spot. (Mediaweek)Don Imus’s morning radio show may soon return to television in Washington, D.C., Boston, Chicago and San Francisco, among other big cities, under a deal in the works involving Comcast. (NY Times )Demand for Amazon’s Kindle remains strong. (Seeking Alpha)Fox Business could exploit a loophole in WSJ’s contract with CNBC and begin using WSJ reporters on air. (Silicon Alley Insider)

Music majors: When flat growth is good news

Numbers don’t lie, finance geeks will tell you. If that’s the case, then maybe things aren’t as bad for the music majors as media reports, trade bodies and executives will have us believe.This came to mind after perusing the earnings reports from the two largest music companies: Universal Music Group (a unit of French telecoms/media giant Vivendi) and Sony BMG Music Entertainment (a joint venture of Sony Corp and German media group Bertelsmann AG).Universal posted a 3 percent fall in revenue in the fourth quarter of 2007, while Sony BMG said sales growth was flat (0 percent) after hit albums from Alicia Keys, Celine Dion and Carrie Underwood.These aren’t bad performances when you consider both companies account for over half of music album sales - a market that is meant to have shrunk by around 15 percent in the United States through 2007.But, as music blog Coolfer notes, the figures may not tell the full story.Growth at Universal, whose best sellers included Andrea Bocelli and Mary J. Blige, benefited more from acquisitions including BMG Music Publishing and Sanctuary. Excluding the acquisitions, Universal’s revenue fell 5 percent.As for New York-headquartered Sony BMG, it said Alicia Keys et al were important but the company also benefited from the favorable impact of exchange rates on sales outside the United States. Universal also claimed a similar impact.For music companies, it seems the weak dollar is a bit of a hit.

Goldman Sachs: A Comcast dividend would be nice

In the eyes of Wall Street, Comcast Corp is no longer a growth stock and needs to start to focus more on returning value to shareholders, so says a Goldman Sachs report today.The note from Goldman analyst Ingrid Chung comes two weeks after we reported that investors are beginning to re-think the Comcast ‘value stock’ story and are now calling for the reinstatement of a dividend. The last time the US cable company paid a dividend was nine years ago.Chung also says investors will be looking for a confident 2008 outlook from Comcast on Valentine’s Day, when it is scheduled to report quarterly earnings:While competition and the economic slowdown continue to chip away at Comcast’s business, we would become more constructive on the stock if the company were to post strong 2008 free cash flow guidance and show a renewed commitment to shareholder friendly initiatives (such as a dividend) when it reports 4Q2007 results on 2/14.Goldman Sachs downgraded Comcast shares to a 'Neutral” rating on Dec. 4 after the cable company lowered its full-year revenue growth forecast.The stock fell around 40 percent in the last year as investors believe the company is struggling with pressures from the US economic slowdown and increased competition for customers from satellite TV operators and new advanced video services from phone companies.One investor is publicly calling for the head of Chief Executive Brian Roberts. Chieftain Capital, which owns around 2 percent of Comcast’s outstanding shares, also thinks a dividend would be a good idea. Chung said Comcast can help its own cause by making itself more appealing to value investors:We believe Comcast can no longer view itself as a growth company and in order to attract the incremental investor, Comcast needs to show investors that lowered expectations are now achievable and to demonstrate an increased commitment to returning cash to shareholders.(Photo: Comcast CEO Brian Roberts/Reuters)

Lessons from the campaign trail for Microsoft, Yahoo

How is Steve Ballmer like a White House contender? In the heat of the presidential primary season, it seems Microsoft has taken a few lessons from Clinton, Obama, McCain and Romney: Draw a contrast with your opponent and explain how you will prevail, but don't mention them by name if you can help it.You'll never find the word "Google" in Microsoft's press release or its letter to the Yahoo board, but the search engine and online advertising giant is implicitly ubiquitous:"Today this market is increasingly dominated by one player. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners.""The industry will be well served by having more than one strong player." [Admitting there is only one now? Ouch.]"Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers."Not that naming or not naming Google will make much difference. In a highly unscientific poll based on a leading news search engine (ok, it was Google News), roughly 80 percent of coverage about the Microsoft-Yahoo offer mentioned Google in the first sentence.Yahoo didn't even have the Microsoft bid on its front page until about 10:00 am EST, some three hours after the news broke. Even then it was buried about 11 headlines below the story that Yahoo considered the most important of the day: "How scratching brings relief."UPDATE: Ballmer's internal email to Microsoft employees, obtained by TechCrunch, doesn't mention Google either, but states: "Together, we'll create a company that is in a much better position to compete against an increasingly dominant player in this market"