Conversations at the Heights of Media-Tech

McGraw Hill's Media Summit last week yielded thought-provoking insights from three top CEOs

On Mar. 18 and 19, media and technology professionals convened in New York for the fourth annual McGraw-Hill Media Summit, which BusinessWeek helps sponsor. The conference featured Microsoft (MSFT) Chief Executive Steve Ballmer, interviewed by BusinessWeek Editor-in-Chief Stephen J. Adler; NBC Universal (GE) CEO Jeffrey Zucker, interviewed by Executive Editor Ellen Joan Pollock; and Viacom (VIA) CEO Philippe Dauman, interviewed by Los Angeles Bureau Chief Ronald Grover. Excerpts:


On the economy: The principle we're operating on is that the economy will contract and reset. And it may take a while before we know exactly at what level we reset. Then we'll begin again what I'll call regular growth. I don't know how long it'll take—could take one, two, three, four years before we get back into what I could call a normal growth pattern.

On Microsoft's search strategy: I think we've done a very good job of going from nowhere to having a very good product. But we've still got a lot of work to do, no question. We will have a brand [in search]. Our brand will carry with it our differentiation [from Google (GOOG) and other rivals]. And if we only get 15% or 20% of people who like [the product] over the next few years, that'll be a significant step up from where we are today, and then we'll continue to build from that base.

On a potential acquisition of Yahoo! or Yahoo's search business: This is not about Yahoo's (YHOO) technology. It's about volume, because you can improve your product faster if you have more users. The more users you have, the more data you have about what users are interested in. And the more users you have, the more advertisers you get. I did have a discussion with [new Yahoo CEO Carol Bartz] to welcome her and tell her we wanted to chat. And I'm sure we'll have a chance to talk. I think a fairly compelling set of economics underpins the idea of a search partnership. And unless I'm fooling myself, over time, I'd expect there's a good opportunity for a deal.

On competition from Apple: Apple (AAPL) gained about one point [of market share in the PC business]. But I think the tide has turned. Let me just say, the economy's helpful. Paying an extra $500 for a computer in this environment, I think that's a more challenging proposition for the average person than it used to be.


On comedian Jon Stewart's takedown of CNBC anchor Jim Cramer: Everybody wants to find a scapegoat. I'm upset that my 401(k) isn't what it was. You're upset that your 401(k) isn't what it was. And we all want to blame somebody, and that's human nature. But to suggest that the business media or CNBC was responsible for what is going on now is absurd. I'm incredibly proud of the job they've done and I think the criticism of CNBC was totally out of line.

On how the Web is changing the broadcast model: Technology has changed everything. Digital video recorders have changed the way people watch prime-time television. The Internet has changed the way people consume video. Advertising is not what it was. We're not going to give up on the legacy businesses: news and information, the broadcast network. But if we don't acknowledge that my 11-year-old son [is] consuming content differently, we'll go extinct.

On the disparity between online and broadcast revenues: What we've lost in viewers and ad dollars on the [broadcast and cable side] is not being made up in any way, not even close, on the digital side. I don't know that we ever get to the one-for-one dollar replacement. But that's O.K. if you can fix your cost structure.

On NBCU remaining part of GE: NBC Universal has benefited greatly from being part of GE. GE has given us great discipline, and I think [that] has allowed us to see things before others see them. Nothing lasts forever, but I believe we will be there.


On being a pure content company: Whatever device people are going to be using, wherever they use it, they're going to want to see great content. We have great brands: Nickelodeon, MTV, Comedy Central, Spike, BET, VH1, and so forth. And when you have a portfolio of great brands, you are able to attract viewers.

On people ditching cable: We're not seeing it. People tend to want to keep their television connection. They may downgrade. But it's a dramatic step for somebody to cut the cord, and very few people would do it.

On putting content online: We're very respectful of our partnerships with Time Warner Cable (TWC), Verizon (VZ), DirecTV (DTV), Dish Network (DISH), everybody else. So we don't put the entirety of our programming online [the same] day [it appears on TV]. We experiment. We find we can draw more viewers to shows. And it reinforces on-air viewership. We want to be ubiquitous. And we're working with companies like Time Warner Cable to make sure that the way we distribute content evolves the way the consumer wants.

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