Last year, I composed a not-so-bullish appraisal of NBC Universal's Jay Leno strategy. NBC Universal, which General Electric (NYSE: GE) has an 80% stake in, wanted to make sure that Leno's services did not wind up in the hands of a competing media entity when they handed The Tonight Show over to Conan O'Brien, so they bestowed upon him a talk program to be aired weeknights at 10 PM. It debuts tonight. I basically argued that NBC would survive without Leno, and that such an odd programming choice at 10 PM, when scripted intellectual assets are usually broadcast, might not be the optimal paradigm to engage.

Well, I still feel this is a risky move, but I do have to say that an article by Scott Collins over at the Los Angeles Times has piqued my interest in the expected economical benefit that Leno-at-10 might imply. Leno might not bring in a ton of eyeballs, but his profit margin could be acceptable given the lower capital necessary to fund his extravaganza.

Jon Stewart has devoted a considerable amount of airtime to bashing CNBC and its pundits for not doing more to warn the public about the stupidity and incompetence that led to disasters for retirement portfolios.

Now NBC Universal CEO Jeff Zucker is firing back, calling Stewart's attacks "incredibly unfair" and "completely out of line." He said that "everyone wants to find a scapegoat" and believes that blaming the financial media for the meltdown is "absurd."

I found myself writing about General Electric's (NYSE: GE) NBC the other day, specifically about CEO Jeff Zucker's apparent flummoxed realization that radical changes may be needed to stanch the ratings erosion that have plagued the major broadcast networks in this brave new media world. Now, I have another, equally interesting subject to look at: Jay Leno will be given a talk show after he hands The Tonight Show over to Conan O'Brien. The program will air on weeknights from 10 p.m. to 11 p.m.

As we all probably know by now, NBC was intent on having O'Brien take over Leno's position as a way of ensuring that he would stay at the network. Leno, as one would imagine, reportedly hated giving the job up. NBC, however, did not want Leno to head over to another network. Supposedly, Disney's (NYSE: DIS) ABC was perhaps interested in taking Leno on. So, the powers that be at the Peacock net have secured the services of Mr. Leno by offering him the chance to do something new: namely, distribute his schtick at an earlier time.

Okay, I'll tell you, I think this is a ridiculous idea. On many levels. Let's talk about level one: is this even going to work? Do people want to see Leno at 10 p.m.? Hey, maybe they will. But I get the feeling that this might be too much of a change for people used to seeing Leno at 11:30. Let's go to level two: why does NBC want to program what would essentially be two Tonight Shows? Won't there be some cannibalization going on here? You always hear media companies whining about cannibalization.

General Electric's (NYSE: GE) NBC is really feeling the heat of the recession. NBC Universal CEO Jeff Zucker thinks that reducing the number of primetime hours on the network should be considered a viable option for controlling costs and for adjusting to the current media landscape that seems to favor cable networks over traditional broadcasting entities like Disney's (NYSE: DIS) ABC and CBS (NYSE: CBS). He also speculates that reducing the actual number of days that the network programs may be necessary at some point.

I find all this very amusing. I think what Zucker is essentially saying is that NBC needs to think more like a cable network. I would agree, and have argued for this before. Let's face it, the broadcast networks are dinosaurs in many ways. They just can't compete in a world where cable channels are popular and are constantly repeating cheaply produced shows to keep costs at a sane level. Take Viacom's (NYSE: VIA) MTV as an example. How many times have there been marathons of The Real World? Likewise, if you come in late on an episode of Celebrity Rehab, you know you'll have other opportunities to catch the whole thing at another time. Not only is that time-shifting model convenient, it saves money, too.

This is how NBC should think. Sure, it'd be a culture shock, but what if hits like Heroes and 30 Rock were repeated a few times in a single week? That presents a problem, of course. The talent and production companies behind those shows would demand extra compensation. Well, that's where Zucker should come in. He needs to go to the Hollywood community and tell them that things just aren't working out these days for the network. Zucker has to be staunch and let everyone know what a bind NBC is in and that, for everyone's sake, license fees should better reflect the current reality. The networks have experimented with repeating shows during the week, but not to the extent I'd like to see. I mean, really, does Saturday Night Live only have to be seen on Saturday Night?

Lately, I've been hearing a lot of chatter about General Electric (NYSE: GE) and its NBC Universal asset (here's one example). Specifically, there's been talk about the future of the movie and television business and its role as a productive member of the GE portfolio. There are a lot of pundits out there who would like to see it sold off; probably a lot of investors would like that, too. Thankfully, CEO Jeffrey Immelt isn't one of them; he has consistently and steadfastly denied that NBC Universal will be offered to buyers in the near future. I hope he retains such opinion, because I definitely think GE needs NBC Universal.

Sure, GE needs to sell things from time to time, the latest example being the conglomerate's desire to dump its appliance division (Peter Cohan agreed with this logic and recently wrote a piece about the subject). But it shouldn't get rid of NBC Universal. Ever. Well, maybe there might be some compelling event in the future that would justify a sale, but I really don't see that happening. Why? Because content is valuable, and GE needs to own a piece of it.

We live in exciting times. The media is changing. New distribution paradigms, driven by digital technologies, are forming all the time. Libraries of films and television shows are going to be valuable well into the future. Think about Universal and its film library. The Mummy, Jurassic Park, E.T., The Bourne Ultimatum, Jaws...you get the picture. NBC Universal will be able to monetize all these franchises and many, many more from the library, as well as ones that have yet to be produced, via the new digital economy.

General Electric(NYSE:GE)is blaming its huge Q1 miss on the financial markets, and Bear Stearns NYSE:BSC) specifically.

Two weeks before the end of the quarter, GE CEO Immelt did a webcast in which he said the quarter was great. Implication? Load up on the stock. And now everyone who did is hosed.

What happened? Jeff Immelt wants us to blame those nasty market conditions, the ones that were apparently unforeseeable two days before they occurred. Please. Jeff and GE shouldn't compound this disaster by further damaging their already clobbered credibility. The credit crunch started last summer.

But GE's problem isn't just the credit crunch and Bears' collapse. For example, NBC Universal was also a laggard. It posted revenue growth of 3% and profit growth of 3%; in January, GE had predicted 10% revenue growth and profit increases of 5-10%.

NBC U isn't the most important part of GE's portfolio, so it's understandable that during the earnings call this morning, analysts didn't demand an explanation of what happened with Jeff Zucker's unit. But we sure would love an answer. The best-case scenario for the NBC U division: Zucker and his lieutenants underestimated the effects of the writers strike. Worst-case scenario: It's reflective of a larger decline in the advertising business.

UPDATE FROM CONFERENCE CALL: Pathetic GE: Blame Bear Stearns For Our Mess.

See Also: NBCU: Strike Has "No Noticeable Impact" On Q4

Peter Kafka is managing editor at Silicon Alley Insider.

MAJOR PAPERS:

• The Wall Street Journal reported that a New York law firm that was hired to probe into a bribes-for-business scandal at Siemens AG (NYSE: SI) has been hindered by many obstacles including lawyers' missteps and lack of subpoena powers, people familiar said.
• Yahoo! Inc (NASDAQ: YHOO) is expected to reduce its workforce by as much as 5%, according to sources in the company and reported by the Financial Times. The company is reportedly going to lay off some 500-700 of its employees as soon as next Tuesday.

OTHER PAPERS:

• In an effort to save as much as $50M per year, General Electric Company's (NYSE: GE) NBC Universal head Jeff Zucker said the broadcaster would reduce its reliance on pilot episodes of new series on its NBC television station. Mr. Zucker cited the slowdown in the economy and the Hollywood writers' strike as reasons for cutting costs, adding that "it's clear we are in a recession in the United States," the New York Times reported.

WEB SITES:

• Real Clear Markets says that Google Inc (NASDAQ: GOOG) would have the most to gain from acquiring The New York Times Company (NYSE: NYT), a company that has declined in value by 70% over the last five years.

NBC Universal Chief Executive Jeff Zucker made it clear at a conference yesterday that GE (NYSE: GE) had no interest in selling the media business. Referring to GE CEO Jeff Immelt, Zucker said, "He has said numerous times that NBCU is not for sale. It is not for sale after the Olympics." Some press reports have indicated that GE would take the big money from the sports event and then dump the business on some sucker.

It is odd that the head of a GE division should have to make this kind of comment at all. The head of the locomotive division probably wouldn't make comments about the future of his business. Meanwhile, NBC Universal can go on operating as usual whether Wall Street thinks it is for sale or not.

The argument for selling NBC is that the unit does not fit with the conglomerate's industrial and financial operations. That is true, but owning a network does mean tickets to the Super Bowl and the Oscars.

NBC is a $15 billion business with operating income running about $2.5 billion, making it a modest part of GE's overall earnings. Still, the business is about the size of CBS (NYSE: CBS), which has a market cap of $21 billion and debt of $7 billion.

For the $28 billion enterprise value of CBS, GE would sell NBC tomorrow.

Douglas A. McIntyre is an editor of 247wallst.com.

General Electric Co. (NYSE: GE) Chief Executive Jeff Immelt's has given Jeff Zucker plenty of chances to improve NBC Universal. Now, it's time for someone else to run the media conglomerate.

Though NBC's performance is showing signs of improvement, it continues to be one of the laggards in the GE portfolio. Investors are clamoring for the Fairfield, Conn.-based company to spin-off or sell the media conglomerate. NBC prime time ratings are stagnant and still overly dependent on the "Law and Order" franchise. While I am a huge fan of "Scrubs" and "My Name is Earl," I realize that the quirky humor of those sitcoms may not appeal to everyone.

Yesterday, Zucker reshuffled the top management at NBC, ousting programming head Kevin Reilly and replacing him with with Ben Silverman and Mark Graboff. Maybe Zucker thought Reilly, whose contract was recently extended, was working too hard. I'm surprised that Zucker didn't escape the axe himself.

Indeed, anytime a company fills a job that one person did with two or more people, that's a bad sign. It's a recipe for instability and will guarantee turf battles between high-powered executives. However, this does allow Zucker the chance to spread blame around to more people when things go wrong or don't go right fast enough.

Today's New York Post Business Poll asks readers to decide Jeff Zucker's main priority as the new president and CEO at NBC Universal, a media concern that is 80% owned by General Electric Co. (NYSE:GE). The overwhelming choice, with 64.3% of the votes, suggested improving the network's prime-time programming in an effort to boost ratings.

As he settles into his new role, Zucker (who formerly served as NBC Entertainment president) is faced with an uphill battle, with his network parked in fourth place. Once the king of "Must See TV" and number-one hits such as Cheers, Friends, and Frasier, the peacock network has lost some of its plume of late and currently lags CBS, ABC, and FOX (respectively home to the CSI, Grey's Anatomy, and American Idol juggernauts) in terms of viewers. The 2006-2007 season has brought some ratings disappointments, but also some pleasant surprises in the form of Heroes, the Deal or No Deal game show, and The Office, which nabbed the Emmy Award for Outstanding Comedy Series.

In a recent interview with Entertainment Weekly, a division of Time Warner (NYSE:TWX), Zucker expressed excitement and confidence in his new role (as one should) and noted that one of the keys to the network's comeback is showing patience and having faith with quality shows (e.g. The Office, which initially lagged in ratings).

Getting back to the poll, 11% of respondents are hoping Zucker breathes fresh life into the canceled Fear Factor. I refuse to comment on that -- the support behind that show always struck me almost as scary as most of its stunts.

Beth Gaston Moon is an analyst with Schaeffer's Investment Research.

Jeff Zucker appears to have won the race to succeed Robert Wright as CEO of General Electric Company's (NYSE: GE) NBC Universal. I'm not sure if this is good for GE shareholders.

Zucker, who famously produced the Today Show and extended Friends's popular run, has seen NBC's ratings stumble to fourth place. Although he has championed some shows that have done well -- such as Sunday Night Football and Heroes -- the reality remains that NBC used to be first and it's not anymore. A few weeks ago, CNNMoney reported that NBC was behind The Walt Disney Company's (NYSE: DIS) ABC and CBS Corporation's (NYSE: CBS) CBS in the Nielsen ratings for the coveted 18 to 49 year old demographic group.

In addition to the weak ratings, NBC's numbers are not too hot either. While its revenues grew 10% to $16.2 billion in 2006, its operating profit fell 6% to $2.9 billion. As a proportion of GE's total, NBC contributed to 10% of GE revenues in 2005 and 2006 during which time NBC's operating income contribution fell from 13% to 11% of GE's total. This performance is not bad, but it's not spectacular either.