Is Comcast (NASDAQ: CMCSA) getting ready to buy General Electric's (NYSE: GE) NBC Universal? Hard to say. According to our sister site DailyFinance, it looks like the rumor of this theoretical event might be just that -- a rumor, nothing more. Then again, maybe there's something to it.

It seems likely, though, that Comcast does want to clinch a deal with some big media company. Remember when Comcast wanted to buy Disney (NYSE: DIS)? Quite frankly, it wouldn't surprise me if it ends up taking NBC Universal off GE's corporate hands. But which group of shareholders would this benefit the most?

I caught an item over the weekend at paidContent about paying for content. Come to think of it, what else would you expect to find over at that site? All joking aside, paying for content in the digital age is actually a very serious issue for media investors. If you're a shareholder of Disney (NYSE: DIS) or General Electric (NYSE: GE), as I am, then you know both of those businesses have ample exposure to intellectual properties that management would like to exploit over the web. For a fee, of course.

The paidContent piece discusses research apparently conducted by a News Corp. (NASDAQ: NWS) subsidiary that suggests consumers would be willing to pay for stuff on the internet. All I can say is, I hope the research turns out to be accurate.

In Chris Anderson's new book Free: The Future of a Radical Price, he makes a compelling argument for why many products and services should be free (or, will inevitably become free). Of course, the driving force of this trend is Google (NASDAQ: GOOG), which has figured out how to generate billions from free offerings.

So, this is why it's puzzling that Google is thinking about building technologies to allow for the purchase of content. What's going on here? Well, it may be that Google realizes it needs to be more political in how it deals with much-needed constituencies, such as the newspaper industry.

Viacom, Inc. (NYSE: VIA), a media company that competes with entities such as The Walt Disney Company (NYSE: DIS), General Electric Company's (NYSE: GE) NBC Universal, and Time Warner, Inc. (NYSE: TWX), held its annual shareholder meeting last week. An article from The Hollywood Reporter recounted a few tidbits from the gathering.

As you can imagine, the CEO, Philippe Dauman, was pretty happy about the company's stock performance. He pointed out that it has been strong against the broader market this year. While that might be comforting, the longer-term performance of Viacom shares has not been so rosy.

So, I just read that Lions Gate Entertainment (NYSE: LGF) purchased TVGuide.com and TV Guide Network from Macrovision Solutions Corp. (NASDAQ: MVSN) for over $250 million. Here's the press release. The question I have is: Why would Lions Gate want to do this?

I know I'm going to be called pretty ignorant by some for even thinking to disagree with this move, but nevertheless, I disagree with this move. The reason is simple (to me, at least). If I were a shareholder of the company, I think I'd rather have management focus on creating content as opposed to spending a lot of money to buy up a platform. Sure, these TV Guide properties have a high level of brand equity and are indeed widely distributed. But a quarter of a billion dollars is a lot of money, a sum that could have been allocated toward new movie franchises and content acquisitions.

Does Lions Gate really want the hassle of integrating the TV Guide portfolio into its business? Won't that distract the company from focusing on its desire to build a great library of movies and television shows so that it can become an attractive buyout candidate someday? I mean, let me get specific for a second. Take the Saw franchise. That's getting a little long in the tooth, isn't it? I look at that quarter-billion bucks and see a bunch of seed money for a ton of new concepts. If only a few made it to Saw-level, then I can only imagine that it would help shareholder value.

Technology insider blog, TechCrunch, ran a thought-provoking post yesterday about Google (NASDAQ: GOOG) entitled, The Google Set-Top Box. The article speculates that the search-engine giant may leverage its new open-source operating system, Android, to address TV advertising in a revolutionary way. Google is already testing a new ad platform for TV with Echostar (NASDAQ: DISH), being propped up with data provided by a recent deal with Nielsen. But this just addresses the way ads are bought and sold. According to TechCrunch, almighty Google's ambitions for television go way beyond just ad delivery.

In short, the article posits that Google's aspirations for the mobile phone can be applied to the set-top box, itself essentially a computer. Android's open-source application platform can be used to help promote and support new developments that would turn TV watching more like Internet browsing. "In many ways," says Google's head of TV development, Vincent Dureau, "we think that television is becoming like the Internet in that there is a multiplication of channels. This creates challenges for viewers, advertisers and creators."

So, what does this mean in practice?

I wrote a rather starchy little article about Netflix, Inc. (NASDAQ:NFLX) on January 2, 2007. In that article I stated that it seemed obvious to me that Netflix has a limited future. I did however leave the subject a tiny bit open ended by suggesting that Netflix should merge in with the growing demand for streaming broadband video. An excellent article by Rick Aristotle Munarriz over at The Motley Fool gives me reason to believe that it's quite possible Netflix is preparing for just such a merger to secure its future.

While Mr. Munarriz's article takes Netflix to task for its choice to remove graphical ads from its subscriber site, I myself find the choice to be wise, timely and oh so smooth. Yes, it means Netflix will bypass a proven revenue source but we really need to look at the bigger picture here. First off, if you were to poll consumers who regularly use the Internet for any variety of purchases or tools, you would get the overwhelming reaction that when given a choice they'd really rather not deal with superfluous advertising on their favorite sites. Add to that the fact that Netflix aborted the ad proposition before it had become a measurable portion of its already stout financial statements. It ran the test, it got its results, it decided it wasn't a program it wanted to use... brilliant work Netflix.

An excellent article appeared in Red Herring written by Alexandra Berzon. In her article, Alexandra describes a recent, albeit small, misstep by Google Inc. (NASDAQ: GOOG) whereby it began placing Google-leaning content tips at the head of search results. An outcry arose and our friends at Google quickly disengaged the "service."

This situation brings two things to the forefront of my thinking. First, why can't eBay Inc. (NASDAQ:EBAY) react in similar timely fashion to its membership outcries when it receives them? Secondly, what does Google's attempt here signal in the realm of content manipulation? Setting aside the eBay angle and the business aspects of Google's decisions, let's quickly address the impending danger of content manipulation.

Soon, you may not have to miss a moment of your kid's first school play, even if you're at work.

The convergence of digital-age technologies continued Tuesday with the marriage of a Web video service and a mobile phone carrier.

Web video service YouTube, a unit of Google Inc. (NASDAQ:GOOG), and mobile phone giant Verizon Communications Inc. (NYSE: VZ) announced Tuesday a deal that will enable Verizon's cell phone subscribers across the nation to access YouTube's videos. The deal is part of YouTube's mobile service, expected to be launched later this year.

YouTube will deliver a sample of the most popular videos to Verizon Wireless' V CAST subscribers in the United States. As of November 2006, YouTube had amassed the largest community for online video entertainment. Verizon has 57million mobile phone subscribers.

Wall Street's initial response to the deal was favorable, as it will expand each company's service area and brand awareness, which should provide increased opportunities for revenue. Verizon was up 20 cents to $34.45 on the news, while Google was down 60 cents to $484.01 in early afternoon trading Tuesday.

Investment Analysis: Are YouTube, via Google, and Verizon suitable for the typical investor? Yes, if you can tolerate a low amount of risk. Consider buying GOOG in stages, 25% of your position for each of the next four weeks. For VZ, buy half your position today, then wait to see if it holds at $34. If it does, buy the other half of your position. If it doesn't hold $34, delay your remaining 50% purchase until VZ shows signs of resuming its ascent.

Post courtesy of theflyonthewall.com. (Subscription required)