|While uncertainties about regulation, the economy and the new digital realities are impeding deals, media moguls at Allen & Co.'s annual summit this week also appear chronically stumped about how to radically transform or purge their legacy assets while effectively integrating new digital businesses.
Rubbing elbows with fellow moguls can spark ideas, but implementing them back home is a formidable task. So-called new media acquisitions are usually layered atop existing operations, making for challenging integration. Comprehending the nuisances of digital interactivity and what it means in the vast media spectrum is equally challenging.
Look at the disastrous results of media players trying to embrace social networking. AOL is practically giving away Bebo after paying $850 million for it in 2008. News Corp. is dogged by speculation that it must jettison MySpace, which it hasn't known what to do with since CEO Rupert Murdoch acquired it for $580 million. Murdoch's primary focus now is creating paid-content streams.
Facebook, Twitter and other new billion-dollar players at the heart of social networking are still trying to determine how to develop revenue streams without violating user privacy and exchange. These relative newcomers are looking over their shoulders at the next new way to combine social networking, location, commerce and entertainment as exhibited by Foursquare, Groupon and Liberty Media's Lockerz. The landscape is littered with missed and failed new media deals because of integration misfires.
Newfangled media doesn't come with directions. There is no owner's manual on how to transform established media companies into digital paragons. Apple CEO Steve Jobs, whose closed ecosystem of iPads, iPhones, iTunes and iAds has been the catalyst for mobile connectivity, was as relevant to the Sun Valley conversation as if he was there. Jobs, one of the few media moguls to have successfully reinvented his company for the new media age was a no show.
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