Viacom's Dauman Lays Out Future Strategy

In his first public appearance before the Wall Street community since being named Viacom's new head, Philippe Dauman asserted his independence. He said he has free reign to run things, and isn't a pawn for Sumner Redstone.

"He has left me alone to run this company," Dauman said. "He has confidence in me." Dauman also said yesterday that his long-standing, close relationship with Redstone allows him to flex his muscle. If Redstone attempts to micromanage or meddle in operational issues, he said, "I can push back."

Dauman was named president-CEO two weeks ago after Redstone--the controlling shareholder and executive chairman--ousted Tom Freston, citing frustrations about the company's lackluster stock performance. Dauman has been a Viacom board member since 1987, and served in a top executive post with the company (which includes MTV Networks and Paramount Pictures) from 1994 to 2000, before leaving to work as a venture capitalist.

"I didn't need to come back," he said. "I wanted to come back because I love this company. I felt an obligation to the people in this company to take it forward."

Speaking at a Goldman Sachs investor conference in New York, Dauman indicated that he would work to maintain the hallmark of Freston's legacy--"creative excellence"--while dedicating resources to an area that appears to have led to his predecessor's downfall: strategic Internet acquisitions. (Viacom's failure to acquire MySpace is said to have angered Redstone and contributed to his decision to terminate Freston.)

"I plan to reinforce [creative innovation]" he said, adding: "We are, at the beginning and end, a creative company."

While there has been some speculation that top executives loyal to Freston might follow him out the door, Dauman doesn't expect any mass exodus. "We have a great management team."

Ironically, in the acquisition area, he said he is not anticipating any deals as large as News Corp.'s $580 million MySpace purchase. Instead, he aims to do deals for under $100 million. The goal is to find the next MySpace or YouTube before the price tag balloons. "We need to create a process to identify these opportunities early," he said.

While acquisitions that complement existing online operations are critical, Dauman said the company has untapped organic growth. "We can encourage more innovation internally."

Dauman cited BET and Comedy Central as linchpins with "huge potential going forward." He said he is already in talks about establishing a BET Films line at Paramount, and is interested in expanding the brand globally--suggesting that BET would do well in the UK. On the domestic front, he says, advertisers don't fully "appreciate the reach of [BET's] audience."

Dauman said even with established brands, such as MTV and Nickelodeon, Viacom can bring in more ad dollars by offering advertisers opportunities to reach both targeted and mass audiences. A team dedicated to selling the aggregated reach of the Viacom cable networks is being formed.

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