DirecTV (NYSE: DTV - option chain) shares are basically flat today, but with today's market that is great performance. The company announced a deal Friday after the close that DTV and AT&T Inc. (NYSE: T) will launch a co-branded satellite television service that will be available to AT&T customers beginning after T's current deal with Dish Network (NASDAQ: DISH) expires early next year. Terms of the deal were not disclosed, but this is a big move for the smaller company and DISH is down more than 13% currently. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on DTV.

DTV opened this morning at $26.05. So far today the stock has hit a low of $26.05 and a high of $27.30. As of 12:25, DTV is trading at $26.54, down one cent (-0.04%). The chart for DTV looks neutral and S&P gives DTV a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider an November bull-put credit spread below the $22.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in just eight weeks as long as DTV is above $22.50 at November expiration. Direct TV would have to fall by more than 14% before we would start to lose money. Learn more about this type of trade here.

DTV hasn't been below $22.50 since February and has shown support around $24.50 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in DTV nor DISH, but he does control a bullish hedged position on T.

Google (NASDAQ: GOOG) and General Electric's (NYSE: GE) NBC have struck a partnership in which the search-engine juggernaut will sell some commercial inventory on a few of GE's cable properties. Examples of cable channels in this initiative include Sci-Fi and MSNBC.

This is a win-win situation for both Google and NBC. As the article states, Google gets to expand its ad-brokering universe by having access to cable inventory and reaching beyond its very successful web paradigm. For its part, NBC leverages the expertise of Google and its relationships.

It's kind of ironic when you stop and think about it -- media companies want to go beyond TV and stake a claim on the web, and Google wants to do the opposite, namely grab a piece of a more traditional pie. Nevertheless, the synergy here is quite clear, and if the slowing economy continues to challenge the advertising marketplace (as it undoubtedly will), a partnership like this one can only help the companies involved.

Yet, there's a side to this story that goes beyond the partnership itself that I find very interesting. Google can actually measure metrics that describe how a commercial is received by the public. It can do this because of a hook-up between it and DISH Network. Google can capture data from set-top boxes and analyze the stats behind broadcast-ad campaigns. This represents a great benefit for the industry as a whole.

For every person who had to wait forever for Time Warner Cable, Inc. (NYSE: TWC) to pick up the phone, for every customer who had to slog through an automated voice menu, then stew waiting to talk to a person, for every family that went days without TV or internet, Los Angeles City Attorney Rocky Delgadillo struck a blow Friday. On behalf of the city of Los Angeles, Delgadillo sued the top cable provider for southern California, saying its service was so bad it constituted fraud and deceptive advertising.

The city wants $2,500 for each instance, double if the victim was old or disabled. Part of the problem in Los Angeles stemmed from the company's complicated task of absorbing Comcast and Adelphia customers, not everyday business. Consumers had filed their own civil suit a while back.

Time Warner Cable stock dropped $1.23, or about 4%, Friday on somewhat heavy trading. The damages could add up to potentially millions of dollars. Or it could be one of those lame settlements that give customers useless coupons.

The direct impact of the civil suit isn't as much of a big deal -- yet -- as the broader implications. What if other cities or customers sue? How is this suit going to influence the opinion of someone who's deciding between Time Warner and Dish Network or DirecTV? Between Roadrunner and wireless broadband? For a long time, cable providers could offer lousy service because there was basically no competition. Now, they have to behave better or lose customers. Now that could be real money.

MAJOR PAPERS:

• Three years into its $35B takeover of Nextel, the Wall Street Journal reported that Sprint Nextel Corporation (NYSE: S) is considering selling or spinning off the troubled unit. Few details were available and a deal is not imminent.
• The Wall Street Journal also reported that pressure is mounting on Citigroup Incorporated's (NYSE: C) CEO Vikram Pandit to show that he can turn around the troubled bank. Executives believe Pandit, who has been praised for his cautious and deliberate approach, has been taking "too long" to make crucial decisions.

WEB SITES:

• According to a person close to Google Inc (NASDAQ: GOOG), Reuters reported that Google and Yahoo! Inc (NASDAQ: YHOO) are still "hammering out the intricacies" of a potential advertising and search deal. The source said no final agreement has been reached yet.
• ABC News learned that if Rupert Murdoch does not testify in a lawsuit accusing one of his companies of "corporate espionage," it may cost News Corporation (NYSE: NWS) hundreds of millions of dollars, a federal judge overseeing the trial said. News Corp has denied any wrongdoing, and lawyers maintain Murdoch had no direct knowledge of the unit's alleged hacking into EchoStar Corporation's (NASDAQ: SATS)/DISH Network Corporation's (NASDAQ: DISH) security code and posting it on the Internet.

TiVo Inc. (NASDAQ: TIVO) saw a smaller loss than expected in the fourth quarter just reported on yesterday. The DVR pioneer's net quarterly loss was $6.36 million compared with $19.5 million in the year-ago quarter. Much of the difference was due to TiVo's shift away from making its own hardware and set-top boxes to licensing its technology to cable and satellite operators.

So far, TiVo has lined up Comcast Corp. (NASDAQ: CMCSA) as a large cable customer for its patented digital video recording software, and a partnership with private company Cox Communications is in the works as well. CEO Tom Rogers said, "The key for TiVo now is to secure new, legitimate distribution partnerships with cable and satellite pay-TV providers." Does this mean the end of the standalone TiVo box that pioneered the DVR market in the U.S.? Hard to say, but the focus of the company's efforts isn't pointed in that direction.

For the quarter, TiVo's sales revenue actually went down to $74.1 as hardware revenue declined in a large way to $23.9 million-- a 45% drop from the year-ago period. The company did add 33,000 net TiVo-owned subscribers in the fourth quarter, which was a significant drop from the 101,000 customers signed in the year-ago period. Adding to some slight misery for the company, TiVo lost 122,000 subscribers in the quarter due to competing products and service mainly sold by former partner DirecTV Group, Inc. (NASDAQ: DTV). At this time, TiVo has 3.95 million TiVo-owned customers.

MOST NOTEWORTHY: The Cable and Satellite Pay TV industry and FPIC Insurance were today's noteworthy initiations:

• UBS assumed coverage of The DIRECTV Group Inc (NASDAQ: DTV) and Comcast Corporation (NASDAQ: CMCSA) with Buy ratings and Time Warner Cable Inc (NYSE: TWC), Cablevision Systems Corporation (NYSE: CVC) and DISH Network Corporation (NASDAQ: DISH) with Neutral ratings.
• Suntrust is positive on FPIC Insurance Group Inc's (NASDAQ: FPIC) valuation and book value growth. The firm initiated shares with a Buy rating and $50 target.

OTHER INITIATIONS:

• Morgan Stanley started Citadel Broadcasting Corporation (NYSE: CDL) with an Equal Weight rating.
• UBS initiated Accuray Incorporated (NASDAQ: ARAY) with a Neutral rating and $11.50 target.
• Credit Suisse reinstated Ternium SA (NYSE: TX) with a Buy rating.

Google Inc. (NASDAQ: GOOG) has finally decided to test the waters of television advertising with a large partner, joining up with Charlie Ergen's EchoStar Communications (NYSE: DISH) satellite service yesterday to place commercials on the Dish Network's 125 national programming networks. This comes as no surprise really, as Google has been itching to get into the advertising business in a large way, beyond the web advertising business it currently dominates. Is this Google's big first test? You bet it is.

What will be interesting to watch is just how Google will take its online advertising platform and work it into the traditional television broadcasting business. The deal makes provisions for advertisers to use Google's AdWords automated auction interface to bid on Dish Network's TV ad spots. In what seems like a forgone conclusion with Google involved, advertisers can upload their TV commercials and select the desired time of day and channel -- very similar to how Google runs its web-based advertising network on the AdWords platform. Advertisers can then choose regional or national area coverage and can target the ad based on a show's demographics.

This is Google's biggest test yet of the ability to transition its advertising model from one medium to another (the "new" web to the "old" television), but make no mistake -- this is only a test. This blog post over at ZDNet echoes the same sentiment. I'm pretty sure Google is providing EchoStar a fat check in order for this high-profile test to begin. How it ends will be the important thing to watch, though -- if it does end.

Worried about the futures of companies with huge television and cable businesses, like News Corporation (NYSE:NWS), Viacom, Inc. (NYSE:VIA), Time Warner Inc. (NYSE:TWX) and General Electric Company (NYSE:GE), as American consumers supposedly watch less TV?

Count the sheer number of television sets around the country these days and it will ease your worries. In barber shops, tanning salons, grocery stores, day cares, massage parlors and pizza joints -- Americans love their television viewing time. In fact, TVs now outnumber the quantity of actual humans inside U.S. households. There are 2.73 televisions and only 2.53 actual people in the average American home.

This stat flies in the face of research that says television networks are losing throngs of customers to ad-skipping TiVo and Internet browsing, among other things.

Is television viewing on the decline? The number of TVs would *seem* to indicate that TVs are being utilized now more than ever.

New TV technology is a big part of that story. Huge and heavy CRT televisions are now being replaced by LCD TVs at a fast rate, which opens up new areas where TVs can be placed. It's hard to have a 15" TV on the kitchen counter, but you can throw a 15" LCD TV there pretty easily these days without compromising space. Why not watch The Food Channel while cooking up a Paula Deen recipe in the food center of every home, the kitchen? Paula would call that faintsy.

With half of American homes having three televisions these days -- and only 19% having just one -- it's hard to imagine the television going away anytime soon. That would be some packed landfills in the next decade if predictions of "the death of TV" were to come true!

It's the content that will come across those screens that is likely to change, yes? HDTV, cable television, DBS satellite and possibly WiMAX-TV will all be battling for each viewer while still trying to get viewers to watch advertising that gadgets will make an afterthought. So, how many TVs do you have in your household?