bloggingbuyouts

While Warner Music Group Corp. (NYSE: WMG) withdraws from social music site Last.fm Ltd., Universal Music Group is further embracing the service.

Universal has added its catalog of videos to Last.fm's on-demand streaming service and has agreed to share revenue from advertisements running alongside clips. The deal also includes a provision that Last.fm will highlight UMG's videos exclusively for one month after the agreement goes into effect, bringing clips from Jay-Z, Amy Winehouse, the Killers, Kanye West and others into view.

Warner, the first of the majors to cut a deal with Last.fm, pulled its songs from the site's on-demand service earlier this month, although it continues to allow its songs to be streamed through Last.fm's personalized radio service. A source with knowledge of the situation says Warner felt that Last.fm had failed to deliver promised ad revenue and is trying to renegotiate the terms of its agreement. While Warner has taken equity stakes in other companies that provide on-demand streaming music, such as Imeem Inc., Lala.com Inc. and the MySpace Music joint venture, the source says Last.fm will likely have to cough up more cash rather than equity to keep Warner's music on the site. CBS Corp. bought Last.fm for $280 million in May 2007.

Continue reading at TechConfidential.com.

We haven't heard much from the Jana Partners LLC contingent following CBS Corp.'s May 15 announcement that it would buy CNet Networks Inc. for $1.8 billion.

Jana leads an investor group that wants to nominate directors and raise other matters at CNet's 2008 annual meeting. The firms have criticized the media company for failing to translate its strong brands into shareholder value.

Tech Confidential spoke with a person close to the proxy process who said that Jana and its investor group, which own roughly 21% of CNet, is still reviewing the transaction. At first glance, the deal supports Jana's reason for going after CNet, the person said.

Continue reading at TechConfidential.com.

The Associated Press reports that CBS Corp. (NYSE: CBS) is buying CNet Networks Inc. (NASDAQ: CNET) for $1.75 billion. This $11.50 a share deal is a 45% premium over Wednesday's closing price

CNet's Web sites include News.com, TV.com, Mp3.com, MySimon and GameSpot. And CBS expects to use CNet to tap into the internet advertising market. This deal raises the question of whether any CBS competitors will decide to get into the game of buying internet content companies.

Here are three possible targets:

• TheStreet.com (NASDAQ: TSCM) - This provider of business, investment and ratings content has $65 million in sales and a market cap of $236 million.
• TechTarget (NASDAQ: TTGT) - This provider of online content for buyers and sellers of corporate information technology (IT) products has $95 million in sales and a $531 million market cap.
• WebMD Health Corp (NASDAQ: WBMD) - This provider health information services to consumers, physicians and other healthcare professionals, employers and health plans has $332 million in sales and it's market capitalization is $1.7 billion

I think traditional media companies buying Internet ones could become a trend. It would only take two more such deals to make it one.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Rainbow Media Holdings, a Cablevision Systems Corporation (NYSE: CVC) programming subsidiary, announced today that it will acquire 100% ownership of the Sundance Channel. Sundance is currently owned by NBC Universal, which is owned General Electric (NYSE: GE), and Showtime Networks, which is owned by CBS Corporation (NYSE: CBS), as well as various entities controlled by Robert Redford.

The exchange will be valued at approximately $496 million and consists of a tax-free exchange of 12.7 million GE shares held by Rainbow and given to General Electric and cash given to CBS and Redford entities for their interests.

Sundance began in 1996 under the direction of Robert Redford, with the goal of creating a channel that brings dedicated viewers while promoting artistic freedom of expression through various films, series, and documentaries. It now reaches some 30 million subscribers and with the acquisition, Sundance will join Rainbow's portfolio of channels, including AMC, IFC and WE.

Jon Ogg produces and edits the Special Situation newsletter for 247WallSt.com.

Sumner Redstone, Viacom Inc. (NYSE: VIA) Chairman, has reportedly forced his daughter Shari off its board. And Dealbook reports that with Shari gone, the chance of keeping Viacom in the family has evaporated.

Sumner Redstone, 84, is nothing if not a survivor. Back before he owned Viacom and CBS Corp. (NYSE: CBS), in 1979, he found himself in room 341 of Boston's Copley Plaza Hotel when the place caught fire. So Redstone climbed out on the ledge and held on with one arm while severe burns covered nearly half his body. The gnarled claw of that hand is a testament to his survival instincts.

But Redstone has also managed to alienate his family. He divorced his long-time wife Phyllis a few years ago -- she alleged he was fooling around with the much younger ex-wife of former hairdresser and now producer, John Peters. And his son Brett sued him arguing that Sumner and Shari forced Brett off the board of their privately-held movie theater chain, National Amusements. But the chance for keeping Viacom in the family looked good when he appointed his daughter Shari to the Viacom board.

I don't know why they had a falling out -- possibly disagreements over National Amusements about whether to spin-it off (Sumner) or invest further in it (Shari) -- but with Shari rumored to be on her way out, there are many media companies that would love to own Viacom. News Corp (NYSE: NWS), General Electric Co.'s (NYSE: GE) NBC Universal, The Walt Disney Company (NYSE: DIS) and Time Warner Inc. (NYSE: TWX), owner of this blog, all come to mind as possible suitors.

With Viacom up 3% on the news, let the bidding begin!

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns General Electric stock, has consulted to News Corp.'s chairman, and has no financial interest in the other securities mentioned in this post.

CBS Corp. (NYSE: CBS) took another step into the internet world yesterday with its $280 million purchase of online social networking/music site last.fm. This follows last week's acquisition of the internet stock market show WallStrip.

last.fm acts as both a music guide and internet radio/music distribution site. Members allow the site to track their PC/iPod listening habits, and the site customizes streamed content of new music matching their tastes. last.fm also allows artists and labels to upload new music (with accompanying permissions), so they can (hopefully) build a following.

The UK-based site began five years ago, and now claims 15 million members.

CBS still owns the largest radio network in the U.S., and I'm interested to see if and how they might integrate last.fm into this business. The two seem to be, to some extent, competing technologies, one in decline (radio), one ascendant (internet). The sale came as a surprise to some pundits who had speculated Viacom (NYSE: VIA), until recently part of the CBS empire, was prepared to offer as much as $450 million for last.fm.

last.fm could provide CBS with a valuable platform for distributing content and a channel to retain advertising flowing to the internet. However, at present, no one site clearly dominates the music networking world. While CBS now has a seat at the table, the fight for ears and eyeballs will continue to grow more interesting.