Martha Stewart's daughter Alexis and Jennifer Koppelman Hutt, co-hosts of a show on Sirius Satellite Radio, are teaming up for a new television parody of vintage Martha Stewart Living episodes. The title? Whatever, Martha!

Surprisingly, the show has the blessing of Martha Stewart, who is not normally known as a barrel full of laughs. She told The New York Times that "They promised not to be mean, and I had to trust them. I'm not going to have a heart attack."

The half-hour show, set to debut on Fine Living on September 16th, will feature old clips from Ms. Stewart's show alongside sarcastic commentary from her daughter and Ms. Hutt. There are no clips available online but it sounds similar to ESPN Classic's Cheap Seats.

It's nice to see that Martha Stewart has a sense of humor. Given that shares of Martha Stewart Living Omnimedia (NYSE: MSO) have gone from $20 to $8 in a little more than a year and a half, she will need it. The debut of the new show is symptomatic of the problems the company is facing: Stewart went from an icon to a cliche, and now she completes the cycle by becoming a joke.

With the recent resignation of its CEO following the completion of the Emeril acquisition, this is a company in turmoil. Given its lackluster ability to generate profits during its prime, it seems like a stock worth avoiding.

MAJOR PAPERS:

• In a diversification move, Martha Stewart Living Omnimedia Inc (NYSE: MSO) will reportedly acquire the media and licensed properties of well-known TV chef Emeril Lagasse for $45M in cash and $5M in stock, according to the Wall Street Journal.
• According to the Wall Street Journal's "Heard on the Street," the current quarter for Lehman Brothers Holdings Inc (NYSE: LEH) will not be good and it also has a sizable amount of commercial real estate loans which could lead to bigger write-downs. The latest estimates are of an approximate $1.3B write-down, above recent estimates, and higher than the $830M in the fourth quarter.

OTHER PAPERS:

• The Australian Financial Review reported that General Electric Company (NYSE: GE) has emerged as a new contender for Allco Finance Group's transport leasing, property and power assets.

WEB SITES:

• Motorola Inc (NYSE: MOT) is suing Research in Motion Limited (NASDAQ: RIMM) claiming the company violated seven U.S. patents covering mobile-communications technology, Bloomberg reported. Research in Motion also filed a suit against Motorola claiming the company infringed on Research in Motion patents.

With its stock sitting in a toilet that would make the housekeeping goddess cringe, Martha Stewart Living Omnimedia (NYSE: MSO) is looking for something to boost its operations.

Fortune reports it has learned that the company "has held recent talks with two prominent tastemakers, the fashion designer Cynthia Rowley and Jonathan Adler, known for his home décor, with the aim of building multifaceted brands around these personalities that span television, publishing and the internet."

The talks have reportedly broken off, but CEO Susan Lyne has said that she is on the prowl for acquisitions. Acquisitions have a bad habit of failing to generate value for the acquirer, and Fortune notes that "The pressure to do a deal will intensify this year, as MSO prepares to take a hit on several fronts." And therein lies the problem.

The company has historically been unable to generate a profit, and that's not going to get any better in the near future. An acquisition driven by what amounts to desperation is unlikely to change that. And signing a big star will cost a lot money, and the value of that star's brand will tend to aggregate to them, not MSO -- that's the nature of licensing deals.

Bottom line: If you want to buy shares of MSO, it should be because you're bullish on the future of the company as it is now, not because you're hoping that a management team that has failed to generate value can make a killer acquisition that will restore the company to its once high-flying status.

Dow Jones & Co. (NYSE: DJ) expects to reach an agreement to sell itself to Rupert Murdoch's News Corp. (NYSE: NWS), ending a months-long soap opera that's tried the patience of media nerds like myself, according to CNBC's David Faber. No word on the final terms.

Looks like all of the chest pounding and teeth gnashing by Murdoch's many detractors, including members of the Bancroft family which owns Dow Jones, failed to stop the Australian media mogul just as I expected. The Bancrofts had no other choice. Saying "yes" to Murdoch, was much more lucrative and less potentially litigious than saying "no." There is no doubt that minority shareholders would have sued the Bancrofts for turning down Murdoch's $5 billion offer since the stock would have beeen sent into a tailspin from which it would never recover.

Worries about Murdoch are justified. You can expect the complaints about the tycoon's meddling in the Journal's editorial practices to surface in about six months to a year, perhaps sooner. It will be subtle and difficult for most readers to notice but it will happen. Though many Dow Jones journalists are cringing at the thought of working for Murdoch, they have little choice but to put up with him. Dow Jones pays well in an industry famous for paying poorly. Plus, most media companies aren't doing much hiring because of the current business conditions.

Since Dow Jones appears to have gotten a ridiculously high price for its company, Wall Street will wonder why small media companies such as the New York Times Co. (NYSE: NYT), E.W. Scripps Co. (NYSE: SSP), Martha Stewart Living Omnimedia Inc. (NYSE: MSO) and Gannett Co. (NYSE: GCI) can't do the same.

They better come up with an answer quickly.

Things are looking up at Martha Stewart Living Omnimedia (NYSE: MSO). Recently released fourth quarter 2006 figures show a whopping 5X profit growth over fourth quarter 2005. Fourth quarter 2006 revenues rose 15% to $97 million, while operating income increased to $14.6 million, up from $2.5 million in fourth quarter 2005. 2006 EPS were 31 cents per share for the quarter, up from 6 cents per share in 4Q 2005.

For FY 2006, revenues increased 36% to just over $288 million, with much lower operating income loss of $(2.8) million, compared to a loss of $(78.3) million in FY 2005. All segments of the Martha Machine show healthy growth, from magazines and TV shows to home fashions. Ad revenue was up 26% to just about $24 million, circulation at all Omnimedia publications was up -- Martha Stewart Living, Everyday Food, Body + Soul, and Blueprint, with an overall 11% increase in the number of ad pages.

Ratings for both the Martha Stewart TV and radio broadcast increased, and Martha Stewart products have moved into Macy's and beginning in early 2007 over 900 Michael's arts and crafts stores. In the spring, Martha Stewart Colors paint program will begin to roll out at Lowe's hardware stores nationwide. The company forecasts FY 2007 revenue in the $330-340 million range.