• by David Goetzl  @dgoetzl, May 12, 2008

As NBC Universal holds a quasi-upfront today and looks to tout the range of its company assets, online properties will no doubt play a prominent role. But late last week, CEO Jeff Zucker said NBCU is having trouble turning the Internet into a significant profit generator, even as its audience increases in this space.

In short, the money is not following the consumers. For example, he said traffic on NBC.com has "exploded," even as ratings on NBC have declined. But he added that "our ability to monetize it quickly enough has not kept pace with the transition ... from the broadcast network to the Web site."

However, Zucker promised the network would "get there." Engines will include both changes in advertising and "the way we go to market."

He made his comments in an interview with FT.com, the online site of the Financial Times.

Regarding the NBC network, Zucker said he is concerned that the writers' strike may lead to a long-term decline in ratings--evidenced by the audiences' slow return to serialized dramas. "I fear that some of that audience did go away from some of those programs," he said, adding that the full answer will come in the fall.

Zucker called it a "very unfortunate strike that was not in the long-term interest of anybody in Hollywood, including the writers."

After today's presentation, NBC will enter the upfront selling period, a market clouded by an uncertain economy. Last week, Merrill Lynch analyst Jessica Reif Cohen predicted that NBC's prime-time haul would drop between 1% and 13%, compared to a year ago when it brought in $1.8 billion.

"It's something that we all think about, we all talk about, we're all worried about," Zucker said of the economy.

With regard to national advertising, he said NBCU has "not really seen any falloff" yet. Still, in the recently completed first quarter, NBCU's broadcast TV operations--the NBC network and its 10 owned-and-operated stations--posted flat revenues, although operating profits were up 3%.

Some of the economic findings were attributed to lower ratings from the writers' strike, but the economy did impact the O&Os, where ad spending was down 11%. (Many other station groups are suffering the same fate.)

Zucker said: "We haven't seen any signs of any real economic slowdown outside of our local television stations, where the local media marketplaces are clearly affected by things like auto, retail and housing." As for the coming Beijing Olympics on NBCU properties in August, he noted that the controversy surrounding political issues in China has not deterred any advertisers. "We haven't seen any pullback on the part of advertisers or sponsors."

He added that NBC news outlets will cover any controversial political activity during the Games as "legitimate news stories" and won't "shy away." The "Today" show and evening news will be broadcast live daily from China.

But he said the aim for prime time is to focus on "the opportunity to cover the sporting events."