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Sizing Up Media's Mixed Bag

As Advertising Week heats up in New York, The Hollywood Reporter sizes up the big media picture. Yahoo may acquire Facebook, YouTube is finally cutting deals that attempt to deal with its complicated copyright issues, and Time Warner's AOL seems headed in the right direction--it's dumping its subscription business and focusing more on selling ads. Companies like Facebook and YouTube are fetching $1 billion-plus price tags because Madison Avenue is falling over itself trying to cash in on the phenomenon. An ad veteran like Yahoo could provide the perfect bridge for transitioning a social network like Facebook from college-age time waster to ad bonanza. But would it do so at the cost of the site's integrity? Won't kids soon become bored with Facebook and move to the next social network? That's the billion-dollar question. Yahoo has a history of cumbersome acquisitions--Geocities and Broadcast.com come to mind. What about YouTube? Will it be sued to pieces by Universal Music Group, or will it be able to acquire the necessary licenses and create sufficient ad inventory to keep copyright holders and their lawyers at bay? It's interesting, the trade mag notes, how "advertising remains the undisputed lifeblood of an industry that doesn't yet have its arms around how it can be created, placed, priced and otherwise reinvented in the new digital age." Alterations in form, function and value proliferate, and the industry could use some settling with respect to new growth territories, like social networking and online video. Robust online ad growth has not been enough to keep media stocks humming along. Indeed, traditional media companies' struggles (News Corp. and Disney notwithstanding) are mirrored by troubles at Internet giants like eBay and Yahoo. The bedrock of the ad business, moving forward, has to be quantification. Search-engine marketing, despite click fraud, has to be the model. Until then, expect fits and starts

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