NEW YORK (Reuters) - Investors could be forgiven for wondering if they had stepped into the wrong conference on Tuesday -- old media executives talked up digital strategies even as Internet media leader Yahoo warned of an unforeseen advertising shortfall.
It appeared that old and new media companies had swapped roles for a day.
While many blue chips slipped on Tuesday, a handful of media stocks rose about 1.5 percent after top executives at Walt Disney Co., Viacom Inc. and Time Warner Inc. declared at the conference commitments to exploit the Internet to serve viewers anywhere, on any device.
Meanwhile, Yahoo Inc. watched its shares fall 11 percent after disclosing at the Goldman Sachs-sponsored event that two key advertising segments -- autos and financial services -- were weaker than expected.
The panic selling of Yahoo appeared to do little to shake the resolve of media executives, some of whom once considered the Internet little more than an interesting sideshow.
What's up for one-time Internet-skeptic News Corp. next year? "To continue to drive into the digital transformation," Chief Executive Rupert Murdoch told investors during a morning presentation. Murdoch's own stock on Wall Street has surged after buying one of the fastest growing Internet properties, MySpace.com, last year.
Disney CEO Bob Iger took the opportunity to reveal it had sold $1 million of movie downloads on Apple Computer Inc.'s iTunes just a week after Disney movies were offered.
Iger predicted "more and more people will be watching TV, or TV-like content, on personal computers," and hailed Apple's forthcoming offering, iTV, as "a game changer in many respects." iTV will stream content, such as music and movies, to home entertainment systems.
Even Viacom, whose stock was punished by the recent, sudden departure of CEO Tom Freston, and whose new CEO, Philippe Dauman, shed little light on changes at the company, saw a lift in its share price after speaking broadly about the Internet.
"We are in the early days in the digital age," Dauman said, in his first public appearance after the September 5 ouster of Freston. "I'm looking at small acquisitions, only if they complement what we're doing internally."
EARLY SIGNS ENCOURAGING
Time Warner, whose 2002 merger with AOL is now a cautionary tale for how not to complete a deal, is now closely tracked by Wall Street for how well it improves its online division.
Time Warner stock still trades below levels reached after investor Carl Icahn called for its breakup in February. But it rose on Tuesday after the company said a plan to offer most AOL services for free was yielding better-than-expected results.
Some 40 percent of new users of the free AOL services were first-time AOL users. "That means there is demand for AOL beyond the existing base," Time Warner Chief Operating Officer Jeffrey Bewkes said.
Advertising growth, a key barometer of the success of AOL's new plan, is also "very robust," he said.
While AOL contributed less than 20 percent of Time Warner's 2005 annual revenue, getting the Internet business right will boost the fortunes of the entire company, investors have said.
The newest top media CEO also framed it this way.
"I really believe as we go forward," Viacom's Dauman said, "we wont be talking about the traditional strategy, or the digital strategy, it will be one strategy."
(Additional reporting by Paul Thomasch and Michele Gershberg)
