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Google, Microsoft, News Corp., NBC, CBS Move Where The Action Is

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March 30, 2007

Posted by neillevine

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

         

With Google, GOOG, trying to extend its lead in advertising by placing spots on radio, television and in papers, Microsoft, MSFT, owner of MSN, is playing catch up in the business of making money from advertisers.

Its online advertising sales were merely $462 million in the fourth quarter of 2006, since MSFT currently owns adCenter and Massive, but there are stories about the acquisition of DoubleClick’s $300 million or so in revenue from private equity firm Hellman & Friedman for $2 billion or so, providing H&F with a pretty much 100% profit after only two years.

That’s how fast revenue is moving.

And adding to the expectations of more sales are announcements from Gemstar-TV Guide that it will soon start listings for online movies.

Motivated by the negotiations between YouTube and Paramount and CBS, the YouTube deal with the BBC, the NHL, the NBA and other sports and media entities, News Corp., parent of Fox and TV Guide, and NBC-Universal, are going to launch their own movie site.

This may also explain why Time Warner, TWX, is assessing its strategy for its AOL subsidiary and why networking equipment makers such as Cisco, CSCO, Avaya, AV, and Juniper, JNPR, are predicting good profit increases in the next two years. Transmitting more video content requires more and better equipment. 

This also explains why Microsoft is going to sell an enhanced version of its Xbox game unit and why there are expectations of strong sales for Apple’s iPhone.  

With all these shifts in revenue and customer patronage, most of these companies will benefit.  However, for the big ones like Time Warner, TWX, Viacom, VIA, CBS, CBS-A, News Corp., NWS-A, General Electric, GE, the owner of NBC-Universal, another $50 million to $100 million helps but is not major.  The same holds true for the revenue Microsoft, MSFT,  is gaining  as things stand, and, as I have previously pointed out,  Google, GOOG, is already predicting a significant profit increase in the next two years. 

In line with its customers, JDSU, JDSU, a major internet equipment parts supplier is saying it expects profits to pick up and Netflix, the internet DVD rental company, is saying it expects to show significant earnings growth of 20% to 30% per year in the next few years, prediciting two million more DVD customers next year plus revenue from online viewing. 

In many ways, this is a case of many good companies rising in a good tide of revenue.