Wednesday, April 04, 2007

Time Warner Shares Gain on Positive View

Time Warner Shares Gain on Positive View
Tuesday April 3, 4:01 pm ET
Time Warner Shares Up After Analyst Reiterates 'Buy' Rating, Citing Strength After Spinoff

NEW YORK (AP) -- Shares in media conglomerate Time Warner Inc. rose Tuesday after Citigroup said investors are undervaluing the stock after the company spun off its cable operations.
Time Warner comprises online unit AOL, Warner Bros. studios, cable networks such as HBO and CNN, and publishing properties including Sports Illustrated and Time magazines. Last month, the company broke off its cable operations, giving investors the chance to place a value on Time Warner Cable, the second largest cable operator in the country, independent of the conglomerate's other assets.

Citigroup analyst Jason Bazinet said Time Warner's remaining assets are "inexpensive," and predicts the stock can add about 20 percent in the next year. He rates it "Buy" and assigns a price target of $24.

Time Warner shares rose 44 cents, or 2.2 percent to close at $20.51 on the New York Stock Exchange. In the past year, the stock has ranged from $15.70 to $23.15. Before Tuesday's trading, the stock was off about 20 percent from its 52-week high.

"To our surprise, the pull back in Time Warner shares is almost exclusively tied to movements in Time Warner Cable," Bazinet wrote. "In effect, Time Warner is trading just like a cable stock."

While Time Warner still owns 85 percent of the cable company, those assets comprise just 40 percent of the company's enterprise value, which adds equity value, or market capitalization, to debt.

The analyst argued that, based on calculations of debt, equity value and free cash flow, the implied value of the company's stock is $11 per share, well below his price target.

Time Warner Cable stock closed up 20 cents, at $37.25 on the NYSE.

Sorrell: Only 50% Of Ad Money Targets Traditional Media

WPP's Sorrell: Mobile and New Media to Lead Ad Spend

By Enid Burns | April 2, 2007

“Start experimenting with mobile, test, refine, repeat,” was the advice offered by Sir Martin Sorrell, chief executive at WPP, at the Mobile Entertainment and Advertising Summit held by the GSM Association.

Sorrell reported about half of WPP-owned media buying agency GroupM's business in advertising is spent on traditional media, while the other half is spent on outdoor, new media, market research and public relations. “Those other areas are growing by and large faster than those traditional media,” he said.

Newspaper is the media most threatened by new media, followed by radio and TV, though “cable and satellite give more flexibility,” he said. “Probably the least affected is outdoor and cinema, though the question is raised as to how we’re all going to consume films [in the future].”

New media, and especially emerging channels like mobile, must define standards and reporting practices. “For good or evil, clients are going to not make big decisions in media unless they have measurable data to back it,” Sir Martin said.

A forecast released by GroupM late last year places mobile ad spending in the U.K. at £30 million, or $59 million, for 2007. Mobile is becoming a priority for the larger Internet companies like Yahoo, Google and eBay. “Today there are twice as many mobile phones as Internet connections,” said Sir Martin.

He added growth will be driven by the decline of mobile data costs, adoption of mobile search, and higher data speeds enabled by 3G networks. The opportunity for marketers lies in finding ways to lower the cost of data services through advertising.

On a global scale, growth in the ad spend will come from developing countries, Sorrell said, adding that he prefers to classify the identified countries as quickly-growing markets. He said to look beyond the "BRIC" nations -- Brazil, Russia, India and China -- to “neo-BRIC” countries like Pakistan, Latin America, Africa and the Middle East. “We’ve seen mobile developments in Africa and elsewhere,” he said. “Latin America and Africa, those two will become not just politically important, but economically important.”

News Corp., Offline, Online Content King

Start spreading the News (Corp.)
Rupert Murdoch's News Corp. has been the best performing media stock this year and analysts expect the Fox and MySpace owner to remain ahead of the pack.
By Paul R. La Monica, editor at large
April 2 2007: 1:09 PM EDT

NEW YORK ( -- Some TV critics are wondering if the continued success of Sanjaya Malakar, the woefully out of tune contestant on Fox's "American Idol," will be what finally causes ratings for the hit show to tank.

Yet, investors in Fox's parent company don't seem to be too worried that "Idol's" popularity has peaked. Shares of News Corp (Charts)., which owns the Fox television and movie studios and social networking site MySpace, are up about 10 percent this year.

By way of comparison, shares of rivals Walt Disney (Charts) and Viacom (Charts) are unchanged, CBS (Charts) is down about 2 percent and Time Warner's (Charts) stock has fallen 9 percent. (Time Warner is the parent company of

Analysts say the ratings surge at Fox, which went from fourth place in the 18-49 year-old ratings race at the end of 2006 to leading in the advertiser-coveted demographic since "Idol" rejoined Fox's primetimes schedule in January, is a key reason behind the success in News Corp.'s stock.

News Corp. now appears poised to win the 18-49 ratings crown for the third straight season. And the company's network television unit accounts for about 20 percent of total revenue.

"As long as 'American Idol' stays strong, things will continue to work fine for News Corp.," said Alan Gould, an analyst with Natexis Bleichroeder.

But there's more to News Corp. than Fox, analysts say. Gould said that under chairman Rupert Murdoch, News Corp. has been perhaps the most successful of all the major media companies in terms of embracing digital media.

News Corp. bought MySpace parent company Intermix Media in 2005 for $580 million, a price that's now considered a steal.

"Strategically, Murdoch has been ahead of everybody. He's been looking at everything from a more global perspective than anyone else in the media business," Gould said.

David Joyce, an analyst with Miller Tabak & Co., said News Corp. should see a big boost in revenue and profits in its Fox Interactive Media unit, which includes MySpace, over the next few years, as an advertising revenue sharing agreement with search engine leader Google (Charts) kicks in.

Joyce added that he's not concerned that News Corp.'s recent decision to form an online video joint venture with GE-owned NBC Universal that will compete against Google's YouTube video sharing subsidiary will derail the partnership between MySpace and Google.

Analysts also said that News Corp.'s move to get out of the U.S. satellite television business was a wise one. News Corp. agreed late last year to swap its controlling interest in DirecTV (Charts) to Liberty Media, the conglomerate controlled by mogul John Malone, in exchange for Liberty's approximately 16 percent stake in News Corp.

News Corp. shareholders are set to vote on this transaction on April 3 and it is widely expected that they will approve the deal.

Joseph Bonner, an analyst with Argus Research, said getting rid of DirecTV accomplishes two things for News Corp. that shareholders should like. First, it allows News Corp. to exit the cutthroat U.S. satellite and cable TV market.

DirecTV has had difficulty competing with large cable companies like Comcast and Time Warner Cable, which are able to offer more services, such as Internet access and phone service, than the satellite TV providers.

News Corp. remains a big player in the global satellite TV market though, with a 39 percent stake in British Sky Broadcasting and full ownership of Sky Italia.

In addition, Bonner said Murdoch and other News Corp. executives no longer need to worry about meddling from Malone, who some feared would seek greater control over the company.

"The Liberty-DirecTV deal removes an ongoing issue about what was going to happen with News Corp. stock and control of the company. That cloud has lifted. News Corp. can move forward and not have more of management's time devoted to this," Bonner said.

Bonner added that News Corp. should also benefit from contract renegotiations with cable providers regarding its Fox News Channel. News Corp. was able to receive increased carriage fees from major cable companies due to the ratings success of Fox News Channel. Bonner said this should boost results in News Corp.'s cable programming unit, which accounts for 13 percent of overall sales and 26 percent of operating income.

Nonetheless, there are some concerns about News Corp. going forward. The company's movie business, which had a strong 2006 thanks to box office hits such as the "Borat" movie as well as sequels in the "X-Men" and "Ice Age" franchises, will face tougher comparisons this year.

This summer, News Corp. is releasing a "Fantastic Four" sequel, a fourth "Die Hard" film (and first since 1995) and the long-awaited movie based on Fox's long-running cartoon hit "The Simpsons." Gould said he's not sure if any of these films will be monster blockbusters.

News Corp. also faces a tough environment in some of its slower-growth "old media" businesses such as its newspaper and magazines divisions and HarperCollins book publishing unit.

Still, analysts said News Corp. should continue to outperform its media brethren. "They are the best of the media conglomerates," said Miller Tabak's Joyce.

Gould adds that even though the stock trades at a premium to its rivals on both a price-to-earnings and price to earnings before interest, taxes and depreciation and amortization (EBITDA) basis, the higher valuation is justified because of MySpace's growth potential.

To be sure, MySpace and other online assets are still a small part of News Corp. The company said in February when it reported fiscal second quarter results that Fox Interactive Media posted a slight loss in the quarter even though sales rose 70 percent from a year ago.

But News Corp. president and COO Peter Chernin vowed during the call that Fox Interactive Media would not only be profitable in 2008, but that operating margins should be about 20 percent.

"The key thing to watch will be the evolution of MySpace and Fox Interactive Media and how quickly those profits ramp up," Gould said. Offers Do-It-Yourself 'EZ Ads' Offers Do-It-Yourself 'EZ Ads'
by Judy Warner, Wednesday, Apr 4, 2007 6:00 AM ET

THE WEB SITE THAT A year ago was the buzz of cocktail parties, office meetings and cab rides will today introduce a bevy of new features intended to draw home buyers and sellers to its ad-supported site. today launches "EZ Ads" among other features to attract user-generated content to its real estate site, increase visitation, and generate revenue. Zillow's do-it-yourself ad capability allows anyone to create an ad and then purchase space locally by geography or ZIP code.

Another buzz-worthy addition to the site is a question-and-answer function that allows anyone to pose a question and view answers from anyone who chooses to respond. Visitors can then rate answers as "helpful" or "not helpful," and each contribution links back to a user's profile page--telling visitors, for example, if the question was answered by a local agent, or if the contributor frequently answers questions within the Zillow community.

"Today, some of the most colorful and important information about homes and real estate is trapped inside the heads of local experts--agents, homeowners and neighbors," says Lloyd Frink, Zillow president. "By allowing people to freely ask questions and share information online about homes, we hope to unlock, for the community as a whole, a powerful vault of data, such as an agent sharing insight into a neighborhood, or a potential buyer asking the shortest commute route downtown."

The Kelsey Group's Matt Booth, an analyst who covers interactive local media and was given a preview of the site enhancements, predicts that the EZ Ad tool in particular will prove popular because it depends on "self enrollment" and will attract buyers of local ads with credit card in hand. Inexpensive and simple to use, Booth predicts the feature will take off.

"I can see someone going in right away and buying up all the really good ZIP codes. If you're selling in Beverly Hills you want to be there and in the surrounding areas."

Seattle-based Zillow was launched a year ago by former executives. Its "Zestimate" valuation tool allows anyone anywhere to type in an address and find out what that home is worth. So far, interest in the site has exceeded expectations. Company founders had projected 1 million unique visitors by August, and instead saw 5 million unique visitors in just three weeks.

What has made the site attractive to advertisers such as Lendingtree, Washington Mutual, Bank of America and dozens of others is the quality of its visitors: 84% own a home, most are affluent, and they're concentrated on both coasts.

Last month, according to data compiled by Hitwise, Zillow ranked No. 7 in share of market for site visits in the real estate category. Judy Warner covers financial services. She can be reached via email at

Harper's Establishes Online Archive Going Back 157 Years;

Harper's Establishes Online Archive Going Back 157 Years; Prints Subs Include Access
Posted by David Kaplan

Tue 03 Apr 2007 06:29 AM Harper’s magazine, which published its first issue in June 1850, is making articles dating back 157 years available in a new online archive, Fishbowl NY reported. So far, the archive is available only to print subscribers of the monthly magazine. Those who pay subscriptions, which start at $16.97, will be able to view PDFs of articles at no extra charge. The Harper’s online database boasts thousands of interlinked topic pages from over a quarter-million page-scans. In addition to maintaining current, non-archived articles and features free on its website, Harper’s says it is looking for a solution for bloggers wishing to link to older Harper’s content.

In gathering all past issues, Harper’s relied on the Cornell University Library, which allowed the magazine use of scans from the publication’s first 49 years.
By putting its archives online, Harper’s takes a different approach than that of the New Yorker, which released its archives on eight DVDs in late 2005. Whereas Harper’s views its archives as an incentive for subscribers, the New Yorker saw a way to increase revenues directly. It’s worth noting that on the bottom of the New Yorker’s home page, under the heading “Coming Soon,” it says the site will offer most New Yorker articles since 2001 and selected pieces from before, as well as a searchable index, with abstracts, of articles since 1925.

Boomers Hip to Web Technology. Online for Needs, Not Entertainment

Boomers Hip to Web Technology. Online for Needs, Not Entertainment

According to a new study, by ThirdAge Inc. and JWT BOOM, with over 1,210 adults 40+ years of age, over 72% of ThirdAgers access the Internet from Broadband in their homes, which is significantly more than the national average across all age groups. And, over 82% of all respondents are researching or reading information Online on health and wellness for themselves and for their families.

Sharon Whiteley, CEO of ThirdAge, said "ThirdAgers (baby boomers and mid-lifers generally in their early 40's through mid 60's) are regularly stereotyped as being technophobes and slow to jump on the technology bandwagon. However... not only are they online, they're surprisingly a formidable presence on the Internet."

According to the survey, ThirdAgers spend time on the Internet are to:

Seek out information (92%)
Stay in touch with friends and family (95%)
Shop online (73%)
Browse the Web (95%)
Read articles (91%)
Research products before purchasing offline (86%)
What they're not doing is watching videos, writing blogs, playing games or downloading music, notes the report.

The report includes data that shows that

Close to 108 million people are over the age of 45, more than 40 percent of the population, with the majority of the buying power in the United States
They account for 70 percent of the U.S. net worth, controlling $9 trillion
In the next 15 years, the 50-64 age popular will grow by 50 percent and the 65-plus population will grow 32 percent
Traditionally coveted 18-40 Gen-X and Gen-Y populations will grow only 3 percent combined
Whiteley says "... many marketers... (are not) building a trusted relationship with people who are over 40... These generations have grown up in the information age; they will seek facts, data and peer input..."

Based on survey findings, over 96% share information and details about new discoveries with their family, 84% with their children, 83% with their spouses and 71% among their co-workers making this cohort one of the most active groups in the viral marketplace.

Research results also point to the fact that marketers would do well to understand the value of an integrated media plans when marketing to ThirdAgers as 92 % visit an online Web site after they've read about it in a print article. 89 % typically visit a Web site after seeing a print ad, and 83 % visit a site after seeing a television ad.

Additional topline findings about this market segment:

82% are using a desktop computer to connect online
17% are using laptops
73% are using Broadband to access the Internet from home
82% are using the Internet to seek information around health & wellness
69% get health & wellness information from doctors and medical professionals
79% would respond to promotional e-mails about products and services
92% have read about a Web site in a print article and then visited online
89% have seen a print ad and later visited the online site
83% have seen a Web site advertised on television and later visited it online
65% will visit a Web site address after hearing it on a radio