• The Hollywood Reporter, Wednesday, December 13, 2006 11:04 AM

There's a prevailing but misguided notion out there among big media firms that the status quo is best. This is dangerous thinking in the digital age, where innovation is the key to survival. The adoption of this conservative strategy has led to the departure of several high-ranking media executives, most notably Yahoo COO Dan Rosenweig, and Ross Levinsohn, president of Fox Interactive Media.

"In the Internet, more than any other media business, it's all about risk-taking," Levinsohn said. "And when you kill that spirit, you lose your strategic focus, and that can lead to product degradation and the inability to attract the best minds." FIM is expected to generate its first profit of $100 million in fiscal year 2007 on revenue of $600 million, $250 million of which will come from News Corp.'s new search relationship with Google.

Yahoo is the best example that big-media bigwigs don't necessarily know how to run online companies. Several traditional media hires have proven to be busts for the Web giant. Yahoo is now forced to play catch-up as it revises its focus, which is expected to shift more heavily to the bottom line, which could stifle innovation.

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