In the March 13th edition of Business Week an article on Comcast, Deal or No Deal reads: “Wall Street has wondered when the Comcast (CMCSA) chief executive and serial acquirer might make a play for another big media prize.
The chatter picked up last fall, just before America’s largest cable company confessed that it would add fewer subscribers than expected in the fourth quarter. Some investors worried that, with growth slowing, Roberts might try to pick off Yahoo! (YHOO) or NBC Universal (GE)—diversifying away from cable by wading into the murky waters of “content.”
“In January, dissident shareholder Glenn H. Greenberg warned Roberts to stick to what he knows best: distributing TV, Internet, and phone service over Comcast’s 125,000 miles of pipe. As far as Greenberg was concerned, buying a Web site, cable network, wireless outfit, or other “noncore” business would “fritter away” the more than $2 billion in cash that Comcast generates annually. Greenberg, the boss of Chieftain Capital Management, a $5 billion investment fund that owns 2% of Comcast’s stock, brazenly questioned whether Roberts should be running the company.
The broadside jolted the normally unflappable Roberts into action. In a mid-February conference call with investors, he vowed to reinstate Comcast’s dividend after a nine-year hiatus and repurchase $7 billion in stock by 2009, two moves designed to put more of Comcast’s money into shareholders’ hands. His 88-year-old father and Comcast founder, Ralph, even gave up his hefty compensation package. And Roberts promised that Comcast “was not spending any time on any of the large, transformative acquisitions” that Wall Street had been buzzing about. “
Does Wall Street Have it Wrong?
Now consider if Comcast, as a utility, empowered users to create “Their Space”, with broadcast feeds, connections, blog integration and publishing capabilities across all networks etc (i.e. VRM vision) plus with the add on of a self publishing video feature where individuals create their own “broadcast, channels and content” which can be viewed on “Their Space” which appears on cell phones and Cable TV and all this is integrated into a robust search engine both online, offline and on TV. You would end up with convergence of all media and empowerment of user generated media which could be broadcast across all mediums through “Their Space” empowered by Comcast.
This strategy enables Comcast to stay true to their core competency, a utility, but expands the value and functionality of the “utility” across the entire internet, the entire cable viewers and increases relevancy through search functions. Collectively this is a leap frog ahead of everything in the market today, everything.
Comcast is now in voice, wireless and broadcast services centric to their utility. Add the functions and features above, empower users and brands with greater reach and utility and what do you gain? Everyone’s Space at the click of a mouse or the click of a remote channel changer!
Rather than spending billions of shareholder value on acquiring an old media company why doesn’t Comcast simply spend millions rolling up the social computing space and converging user generated content into their distribution channels across all mediums, all media and with reach to over 100 million subscribers? Now that would be disruptive and it would start the race all over again at zero. However, Comcast gains would surely create a rise in shareholder value and Wall Street should applaud such a move.
Comcast, are you listening? Do you want to know how to do this? Call us.
We tried to reach you but couldn’t get through the automated IVR system nor find an email to an executive.
What say you?