This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

YouTube Outfoxes TV Foes

Imagine if WalMart (WMT) decided to end shoplifting by giving away the store.

Far-fetched? Well, a crude, digital equivalent of that scenario may actually be playing out.

General Electric's (GE - Get Report) NBC Universal entertainment division and News Corp.'s (NWS - Get Report) Fox unveiled a huge partnership Thursday aimed at creating an online video site.

The move has been portrayed as old media's latest bid to gang up on Google's (GOOG) YouTube.

NBC and Fox, after all, signed deals with major technology players including Yahoo! (YHOO), Microsoft (MSFT) and Time Warner's (TWX) AOL. And Google already is under attack on the YouTube front, thanks to last week's $1 billion lawsuit from Viacom (VIAB - Get Report).

But a look at the sums at stake in online and TV advertising suggests the big TV networks will feel the effect of this deal far more acutely than Google.

By offering their high-quality content online, NBC and News Corp. are giving consumers a way to watch their programs while avoiding their television broadcasts altogether. Indeed, while the grainy, minutes-long clips posted on YouTube may well have served as teasers for TV shows, what NBC and Fox are planning on offering could stand in as a good reason to avoid tuning in.

The online ad revenue the companies are banking on is a far cry from the amounts spent on TV ads. In 2006, video and graphic display ads -- the type News Corp. and NBC will likely rely on to generate revenue from their content -- garnered $4.9 billion in spending. But large advertisers alone spent $65.4 billion during the same year on TV ad spending, according to TNS Media Intelligence.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
VIAB $70.35 1.75%
GOOG $535.38 2.16%
GE $27.02 -0.84%
NWS $15.48 -0.06%
AAPL $127.60 2.28%


DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs