Consumers Union’s new non-profit subsidiary Consumer Media LLC launches on Jan. 1 with newly acquired Consumerist.com as its only property but the announcement release stressed that it’s the first. Does this mean more acquisitions are on the way? “The short answer is we don’t know,” Ken Weine, VP-communications, told us. “We may down the road acquire or create new items.” Consumer Media is viewed as a way to expand the nonprofit’s consumer advocacy mission and to take advantage of a growth spurt in recent years. 

For now, the new subsidiary sets boundaries between Consumerist, acquired this week from Gawker Media, and CU’s Consumer Reports magazine and website. “The message we’re trying to project—and the reality will reflect this—is we’re not purchasing Consumerist to make it into Consumer Reports and we wanted for that, among other reasons, to structurally create some distance between the two.” 

But that distance doesn’t include a change CU’s policy towards advertising. Weine said the only ads on Consumerist will be house ads for Consumer Reports products. ConsumerReports.org has 3.3 million paid subscribers and provides a blend of premium and free content. Plans call for Consumerist to remain free. Weine: “As of now the only thing in Consumer Media is free content and that’s our intention.” So what’s the business model? Weine suggests stepping back first to see the business model for Consumers Union, which is 90 percent subscription supported. The business model for Consumerist is introducing more people—and younger people, as we reported yesterday when the sale became public—to Consumer Reports products but Consumerist editorially is also part of that overall consumer advocacy mission.

Although newspaper publisher Lee Enterprises (NYSE: LEE) missed its self-imposed Dec. 29 deadline to release its annual report, the company did get it in before the year was out. Lee, the struggling parent of the St. Louis Post-Dispatch, had good reason to wait until the last minute, posting a $879 million net income loss and over $1 million in impairment charges. Also, operating revenues were down 9.1 percent to $1 million from $1.2 million in 2007.

Earlier this month, Lee said that it faced several potential default triggers on its debt. The company notified the SEC that it would delay filing its annual report until on or before Dec. 29, because it needed more time to sort out the amount of non-cash charges it is taking to reduce the carrying value of goodwill and “other intangible assets.” Like many of its newspaper publisher rivals, Lee is carrying a large amount of debt related to acquisitions over the past few years. Lee borrowed roughly $1.5 billion to purchase Pulitzer Inc. three years ago. And so, to keep itself from defaulting on its debt, Lee is trying to get its creditors to waive potential violations of its lending terms. It also wants to extend or refinance $306 million of senior Pulitizer notes that are due next year. Without the waivers, Lee would face default, as the repayment schedule could be accelerated. The portion of Lee’s debt considered current was $456 million as of June 29. Lee had about $149.5 million in cash and equivalents as of Sept. 28 and has $168 million in borrowing room on its credit facility.

Other details from the annual report included:

—Online revenue slipped 1.7 percent to $55 million. The decline was attributed to falling online classified ad sales, which where partially offset by a 19 percent rise in retail advertising on Lee’s newspaper sites.
—Total advertising dollars fell 9.4 percent $783 million.
—Total classified was down 17 percent $234 million, led by autos, which declined 24 percent, and help wanteds, which dropped 22.3 percent.

Subscribe to Time Warner (NYSE: TWX) Cable and have a kid with a Dora addiction? Get ready to pop in DVDs. Need your daily fix of The Daily Show? You’ll have to go online or mobile unless TWC and Viacom (NYSE: VIA) call a halt to the latest round of cable chicken. That’s the game content providers who want rate increases—or in the case of the just-settled Belo-Charter situation, retransmission payments—and cable operators play with viewers in the middle. In this case, Viacom says it’s asking for an increase of less than 25 cents per month per sub for its 19 networks; TWC claims 13.3 million video subscribers. Unless the two reach a last-minute deal, the programmer said Tuesday night it will pull its networks from TWC at midnight Wednesday when the current three-year agreement ends and launch an ad campaign featuring Dora, Kenny, Sponge Bob, Steve Colbert and others.  That includes Nickelodeon, Comedy Central, MTV, and VH1. One source familiar with the situation calls it a “very low double-digit” increase but, as is usually the case with cable programming licenses, while Viacom is happy to toss around all kinds of stats in its statement, it’s not offering the current fee.

Meanwhile, TWC cites online access as a reason not to pay an increase. Spokesman Alex Dudley told the WSJ: “They are asking for huge increases and we don’t know how we are supposed to sell this to our customers in this economy. ... Their content is no more valuable on the first of January than it is today, especially because they are putting most of their top-rated content on the Web for free.” For good measure, Dudley suggests the ad downturn is the reason for the increase demand: “Their business model is failing, so they’re trying to prop it up on our customers’ backs.” To which I have to say, poppycock. Cable nets routinely ask for price increases in good times and bad. Cable operators routinely say no until, usually, the two reach a settlement. That’s how the game is played. Is pushing back this time TWC’s way of helping its customers, as Dudley would have it, or of preserving its own cash flow as it prepares for a spin off from parent Time Warner? Is Viacom seeking a larger increase because of the economy? Doesn’t really matter in the long run.

The timing may be particularly good for Viacom, since it dovetails with a TWC fee increase in New York City, LA and other markets. It also comes as people are relying more on entertainment at home. But don’t underestimate the potential backlash from viewers irked by both players in this game of chicken, particularly at a time when people are looking for reasons to cut back. Will subscribers switch to satellite or Verizon’s FiOS because they can’t get Dora or Jon Stewart on Time Warner? Some might, particularly if it stretches out. Will some shrug and find something else to watch—or go to places where Viacom isn’t paid by the sub? Yes. Will either company come out truly ahead? Doubtful.

Update: A little detail on what TWC pays for video programming, its highest expense: as of Sept. 30, TWC’s video costs were up 7 percent year-over-year to $23.58 per sub compared with $21.94 and accounted for nearly half of the cable operator’s expenses. According to the Q3 10-Q, programming costs rose both because of contractual increases and an increase in the number of subscribers getting expanded programming. In the 10-Q, TWC said it expects its profit margins will continue to narrow because of increased video programming expense: “Video programming costs represent a major component of TWC’s expenses and are expected to continue to increase, reflecting programming rate increases on existing services, costs associated with retransmission consent agreements, subscriber growth and the expansion of service offerings. TWC expects that its video service margins as a percentage of video revenues will continue to decline over the next few years as increases in programming costs outpace growth in video revenues.”

Consumers Union is buying Consumerist.com from Gawker Media, according to the New York Times—meshing the non-profit publisher’s interest in expanding its reach to a younger online crowd with Nick Denton’s latest blog diet. (The Times, the average age of a print Consumer Reports sub is 60 and ConsumerReports.com is 50, while the snarkier Consumerist draws from the 18-49 crowd.) Kevin McKean, VP and editorial director of Consumers Union, told the NYT the blog would be part of a new division, that the current editors would stay on and that the style would stay the same. Two contributors who were laid off by Gawker will rejoin the site in January. No terms disclosed.

Consumerist went on the block in November, a few weeks after layoffs across Gawker Media, and Consumer Reports had been suggested as a possible—and natural—buyer. Denton told the paper he hopes to sell Hollywood gossip blog Defamer but plans to hold onto Gawker, Jezebel, Gizmodo and others. During the past year, Denton, who went public with his pessimism about online advertising ahead of the curve, sold Wonkette, Idolator and Gridskipper, then turned Valleywag from a standalone blog into one writer and a department on Gawker.com.

Update: From the release: The new non-profit is called Consumer Media LLC and the ownership change takes effect Jan. 1. The three-year-old site claims monthly traffic of 10 million-plus page views; for some reason, CU thinks it’s relevant to say that exceeds sites “operated by many daily newspapers.” Well, yes, and it’s lower than many, too. Neither detail says much about the site. (I understand this reference better after a chat with a CU spokesman—to them, it’s a sign of how fast the site was able to grow without a known brand like an existing newspaper. On the other hand, it was part of well-known web brand Gawker Media.)

We are saddened to learn that Bob Nylen, a co-founder of Beliefnet.com and the first board member of online health company Waterfront Media, died Dec. 24 of cancer at the age of 64.  Nylen may best be known in publishing circles for cofounding the award-winning New England Monthly with Dan Okrent but he also played a major role in the two online content companies over the past decade. As Beliefnet co-founder Steven Waldman recalled in a memorial on the site, Nylen served as president when the site was founded in 1999, raised the funding, and volunteered several times for pay cuts during the struggles to keep it going (including Chapter 11 bankruptcy). Beliefnet was acquired by News Corp earlier this year. Following Beliefnet, he was the first board member of Waterfront Media; co-founder and CEO Ben Wolin said he was instrumental in helping the company through the last six years. The Boston Globe has more details about the Vietnam veteran’s life; he earned two Purple Hearts and a bronze star.

Photo Credit: Beliefnet

With a $400 million revolving credit line expiring in May, the New York Times Company (NYSE: NYT) continues to put its fund-raising ducks in a row. The latest: an SEC filing setting the stage to secure debt or raise equity. The terms in the prospectus are as vague as possible—an unspecified amount, indeterminate price—and meant to allow the company to move fast should it go this route. Times spokeswoman Catherine Mathis explains: ‘In these difficult markets, the company wants to ensure that it has maximum flexibility and, accordingly, is filing a shelf that would permit it to offer both debt and equity.” The Washington Post Company (NYSE: WPO) filed a similar prospectus in November for possible debt securities.

At the same time, the chatter continues about a sale of the NYTCo’s 17.5 percent stake in New England Sports Ventures, including the Boston Red Sox, and the possibility of a mix that would include the Boston Globe. The latest: denials by Boston Herald publisher Patrick Purcell and Boston ad exec Jack Connors of scenarios laid out in an FT report. The FT said NYTCo began discussions with Connors two weeks ago. Connors is now telling the Globe: “There’s nothing to it,’’ Connor, who was part of a 2006 effort by former GE chairman Jack Welch: “I’m not buying the Boston Globe. I’m not buying anything that the New York Times owns.’ ‘The Herald variation involved the Ottaway chain and reducing Boston to a one-paper town; Purcell, who owns the Herald,  is joining News Corp (NYSE: NWS) to head the chain.  He called the report ““completely unfounded and not rooted in reality.”

Photo Credit: Robert Scoble

• New York Times Reportedly Shopping Red Sox Stake; Looking For $200 Million In Tough Market?
• NYT’s November Revenues: Bleed is Still On
• NYTCo Wants To Raise Up To $225 Million From Mortgage Or Sale-Lease Of Times HQ
• NYTCo Relents, Trims Dividend; Does It Go Far Enough?

Two news bits about the Nintendo Wii snuck out during yesterday’s Christmas Day lull: Nintendo announced that the Wii would finally be getting video downloads, and Amazon (NSDQ: AMZN) said that the console topped its holiday best-seller list.

—Nintendo teams with Dentsu for Wii video service: Nintendo has partnered with Japanese ad agency Dentsu to roll out a video distribution service on the Wii. Reuters says the service will offer both free (ad-supported) and subscription-based shows, though no specific series were named. NewTeeVee reports that the VOD feature, tentatively named the Wiinoma Channel, may not appeal to console owners that have become accustomed to broad show libraries: as it stands, the Wii won’t be used to access third-party content over the Web, just the clips that Nintendo approves.

There also weren’t any details about when the service would be available outside of Japan, though it’s in Nintendo’s best interest to scale it out globally at some point. The company has sold roughly 34.6 million Wiis worldwide, and just 7 million of those units were sold in Japan (per Gamespot)—compared to 13.4 million in the U.S. alone.

—Wii fuels Amazon’s “best ever” holiday sales: What recession? Online shoppers helped Amazon rake in its best holiday sales season in 14 years—with nearly 73 items ordered per second on Dec 15, its peak day—per a company press release. Amazon called out the Wii specifically in terms of its holiday success, saying: “the Nintendo Wii dominated the top sellers in video games and hardware including the Wii console, the Wii remote controller and the Wii nunchuk controller.”

Earlier this month, eMarketer lowered its social media ad spending outlook for 2008 through 2013, with revised forecasts for News Corp.‘s MySpace and Facebook. In an update, the online research firm offers details for why the two nets will take in less money this year:

—Slower growth overall at FIM: eMarketer lowered its MySpace ad revenue forecast for 2008 by more than 22 percent—from $755 million to $585 million—partly because of slowed revenue growth at parent company Fox Interactive Media (NYSE: NWS) (FIM). Over the course of News Corp.‘s past fiscal year (which includes half of 2007 and half of 2008) FIM’s year-over-year revenue growth sputtered from 87 percent at the end of Q2, to 55 percent in Q3, to just 23 percent in Q4. The downward trend continued in the company’s most recent earnings report: for the quarter ended September 30, 2008, FIM’s revenues were up just 17 percent year-over-year, and eMarketer expects the trend to continue. Just don’t tell that to MySpace CEO Chris DeWolfe: at the Reuters Media Summit he said that the social net hadn’t really seen “any impact” from the financial crunch and that he expected revenues to grow next year.

—Facebook picks utility over revenues: Though eMarketer revised its Facebook ad revenue forecast for 2008 by more than 20 percent (down from $265 million to $210 million), the social net also lowered revenue projections on its own, per BusinessWeek. Citing a source familiar with the company’s finances, the article said Facebook brass had initially hoped to generate between $300 million and $350 million in revenues for 2008—but lowered that forecast to $250 million to $300 million, and chose to focus more on developing user-facing features than advertising products.
More after the jump.

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Two of the rare digital media IPOs planned have done something not that rare these days: withdrawing their IPOs. NameMedia, the domain name media company headed by Kelly Conlin, previously CEO of Primedia and IDG, and Eyeblaster, the online rich ad format company, have both filed notices with SEC to withdraw their planned IPOs. Both cites the usual, “market conditions”.

NameMedia filed its S-1 in November last year, with an intent to raise about $172 million. The Waltham, MA-based company offers two main services, monetizing unused domains and facilitating domain name sales.

Meanwhile, Eyeblaster, the NYC and Israel based company, filed for a $115 million IPO in March this year.

Other digital media related companies that have withdrawn their IPOs recently include LocalMatters, Synacor, and Focus Media (NSDQ: FMCN) (which sold part of its company this week to Sina). When will CurrentTV, the only media related IPO pending that I know of, withdraw?

• Domain Name Marketplace NameMedia Files For $172 Million IPO
• Vertical Content Firm MoreFocus Bought By NameMedia
• Primedia/IDG CEO Kelly Conlin Heads New Domain-Names Based Media Company
• Rich Media Ad Firm Eyeblaster Files For A $115 Million IPO
• Online Ad Firm Eyeblaster Gets $30 Million Funding

Gannett (NYSE: GCI) flagship USA Today is the latest paper to be sold through Amazon’s Kindle. The top-selling U.S. paper has yet to show up is now available at the Kindle Store but Amazon told Kindle subscribers on Christmas morning that they’ll be able to download the Dec. 26 edition for free. USA Today, which doesn’t publish on holidays, only offers weekday editions so the first issue for sale will be Dec. 29.  We’re checking on the subscription and single-issue prices. Single Kindle copies tend to go for 75 cents while monthly costs vary: the New York Times, published daily, is $13.99 a month, while the Wall Street Journal (six days) and the Washington Post (daily) run $9.99. Publishers get the bulk of the revenue share with Amazon (NSDQ: AMZN). Update: USAT is $11.99 a month.

Often requested by Kindle users, USAT is only the 21st U.S. paper and the 28th paper overall to show up in the device store. Some publishers, including the NYT, have talked about their surprise at the service’s success but it’s hard to gauge just how meaningful that it. Amazon also has received considerable publicity from the likes of Martha Stewart raving about reading the Wall Street Journal on her Kindle (no ink to rub off) and others who talk about substituting print editions for Kindle subscriptions. (I don’t subscribe to any Kindle newspaper editions, preferring to keep my print subscriptions and download single issues while traveling.)

Kindle launched in November 2007 in time for the holidays but what should have been a breakout season for sales this year has been hampered by recurring supply problems credited, in part, to a popularity boost from an endorsement by Oprah Winfrey and a discount through her show. New models at $359 are currently out of stock at Amazon, with shipping estimated in 8-10 weeks; refurbished models are available sporadically. Amazon is encouraging would-be owners to sign up now to get a place in line when delivery resumes. The company doesn’t release the actual number of units sold or the volume of Kindle content sales.

Top five newspapers on Kindle sorted by bestselling: NYT, WSJ, WaPo, Financial Times, Chicago Tribune.

Full disclosure: paidContent.org has been available through the Kindle Store since launch.

Last week, Cablevision (NYSE: CVC) finally admitted defeat for the once highly ambitious Voom HD service, announcing that it would close the domestic service early next year rather than continue with its own cable systems as the only distributor. Today, the company estimated in an SEC filing that shutting Voom down in the U.S. would result in a Q4 charge of between $45 million and $65 million as it writes down programming, equipment and other assets. Of that, some $25-to $27 million in cash will go to cover programming fees. Cablevision and its Rainbow Media Holdings subsidiary, which includes Voom, blame Dish Network’s decision to drop the service for its demise; Cablevision sued the company for $1 billion for breaching a distribution agreement earlier this year that dated back to when it was EchoStar (NSDQ: SATS).

• Voom Goes Boom In U.S.; Rainbow Cancels HD Service

Faced with a $400 million revolving credit agreement due in May and falling ad revenues, WSJ.com reports that the New York Times Company (NYSE: NYT) is getting serious about selling its 17.5 percent stake in New England Sports Ventures LLC. NYTCo is the second-largest shareholder in the holding company, which owns the Boston Red Sox, Fenway Park and 80 percent of New England Sports Network. Attributing the story to two sources familiar with the discussions, the paper says NTYCo told NESV partners of its interest in selling last month and has been pursuing potential buyers. (Update: An NYTCo spokeswoman declined comment.) The company acquired the stake in 2002, before the team won two World Series; the current value has been estimated at $166 million and could be worth at least $200 million in a sale. Can it get top dollar in this climate? Sports franchises attract passionate investors and Red Sox fans go off the meter, so, yes, it’s possible. But the pool of potential investors surely is much more shallow now than it was earlier this year when NYTCo was being pressured by activist investors to sell.

One idea being floated—although not clear if the company is pitching it—would be to package the sports interest with the Boston Globe in a sale. That may have worked two years ago when former GE chairman Jack Welch was interested in a vanity project and credit was easier to obtain. (Today, the first thought that comes to mind when I hear something like that is of a scalper who throws in the tickets with a $1,000 pencil to make the sale legit.) The Globe produced money for the NYTCo for years and may be a true community asset but as an investment today, well, it’s a heck of a write off. NYTCo took a $166 million write-down for its New England Media Group in Q3 and expects another adjustment for Q4. The company acquired the Globe with parent Affiliated Publications in 1993 for $1 billion in cash and stock.

Back in November amid a flurry of unfounded rumors that the New York Times Company was shopping About.com, I pointed out that the publishing company would be much better off selling the NESV stake to raise cash and rid itself of a non-core distraction. I also admitted that what makes sense to me and to NYTCo’s operators doesn’t always dovetail. At an investor conference earlier this month, executives said About.com was not for sale but repeated assurances made throughout the year that they continue to look at the portfolio for assets that no longer fit and might be sold for other reasons. (To clarify: do I believe About.com is sacrosanct? No. Do I believe it’s being shopped? No. Is anything possible? Always.) any went public with a plan to raise up to $225 million against part of its 58 percent share of its mid-Manhattan headquarters.

Like much of the rest of the country, we’ll be taking a holiday break starting today. Until January 5, we’ll be publishing only sporadic posts and, of course, tracking any breaking news. The newsletter will also resume on the 5th. We thank you all for your continued support and wish you Happy Holidays.

Photo Credits: lackac; AKphotos; stock.xchng; soulchristmas

The New York Times Company (NYSE: NYT) has announced its November 2008 revenue figures across its various divisions, and the bleed is continuing:
—Revenues from continuing operations decreased 13.9 percent compared with the same month a year ago. Ad revenues decreased 20.9 percent and circulation revenues increased 4.2 percent.
—Ad revenues for The New York Times Media Group decreased 21.2 percent.
—Online ad revenues included in the News Media Group decreased 4.0 percent, as modest growth in display ad was offset by weakness in online recruitment and real estate ad. Year-to-date online ad revenues for this group were up 10.9 percent, compared with the same period in 2007.

For the overall online business: Total Internet revenues decreased 2.6 percent and Internet ad revenues decreased 3.8 percent in November. Internet businesses include NYTimes.com, About.com, Boston.com and other company sites. Year-to-date November 2008, total Internet revenues rose 8.3 percent and Internet ad revenues increased 11.6 percent compared with the same period in 2007. More here.

Intentions for this was announced in March this year, but got scuttled, and no one thought it would re-file in this kind of market environment: Penthouse Media Group, which now goes under a more innocuous name of FriendFinder Networks, has filed its S-1, with an intent to go public and raise about $460 million. Most of the raised money will be used to pay down its debt, related to its $500 million purchase of AdultFriendFinder.com parent Various Inc. last December. Besides the adult sites and magazines, the company also runs Bigchurch.com, a dating site for Christian singles, Cams.com and others. FriendFinder says it has about 270 million members across all its networks, and in this recessionary climate, who doesn’t need more companionship, whichever kinds, that seems to be the logic with the timing.

This is Penthouse’s second attempt at going public…the previous incarnation went public in 1993. The company filed for bankruptcy in 2003, and emerged from it a few months later.  The background of the company and its troubles over the years is documented here.

According to the S-1, FriendFinder’s net revenues, operating income and EBITDA for the first nine months of this year were $262.4 million, $36.1 million and $66.6 million, respectively. It has one million paying subscribers (77 percent of its revenues), and average monthly net revenue per subscriber (ARPU) was approximately $19.06. Almost 92 percent of its revenues now come from online.

On Penthouse the magazine: “We believe that Penthouse magazine plays a key role…Accordingly, in the past few years we made significant changes to Penthouse magazine in order to appeal to a wider customer base. We softened the magazine’s pictorial content to improve newsstand positioning and attract a wider national advertising base, and we added editorial content covering sports, music, video and gaming in order to attract additional categories of advertisers and new readers, primarily targeting 21 to 39 year old males. This resulted in the magazine re-entering sales channels in retail establishments. Our advertising base has expanded to now include tobacco, liquor, apparel, footwear, toiletries, men’s grooming, consumer products and direct-response companies.” Who knew?

The full S-1 is a fascinating read.

It intends to list on NYSE under the symbol “FFN.”

• Penthouse To File For $250 Million IPO
• Penthouse Buys Adult-themed Social Net Various Inc. For $500 Million
• Penthouse IPO ... or AdultFriendFinder IPO?; Digital Acquisitions Planned

Facebook resisted a few days longer than MySpace but finally has given in to the RIAA’s demands that the Project Playlist app be removed for copyright violation. It’s been a real take-one-step-forward and two-steps-back few days for Project Playlist, which also scored a big win by signing a licensing deal with Sony BMG.

The RIAA sued Project Playlist back in April and yet the company has been able to increase its funding and attract top talent since then. The start-up announced funding from Bob Pittman’s Pilot Group (Pittman joined the board) and the hiring of former Facebook COO Owen Van Natta as CEO. Rafat called the service “borderline legal” at the time; Van Natta needs to get the other labels on board to move the needle to legal.

It’s an odd construct all around: Warner Music Group (NYSE: WMG), Universal Music and EMI are suing Project Playlist with the RIAA, Sony (NYSE: SNE) is a Playlist partner now, and all four are part of the MySpace Music JV. That last, of course, goes a long way to explaining why MySpace moved more quickly than Facebook when the issue was pressed. Facebook’s rationale via MediaMemo: “The Recording Industry Association of America (RIAA) initially contacted Facebook last summer requesting the removal of the Project Playlist application for copyright violation, and recently reopened those communications. We have forwarded the RIAA’s letters to Project Playlist so it can work directly with that organization and music labels on a resolution.”

MediaMemo: “The only surprise here is that it took Facebook this long to face up to reality: There was next to no upside for Mark Zuckerberg and company in fighting the big music labels, three of whom are suing Project Playlist. But there was plenty of downside: At best, the social network would end up squaring off against potential partners; at worst, it’s conceivable that it could end up being sued by the labels as well.”

Doing what they can to survive the tougher economy, websites are starting to relax the rules they place on the size and formats of the ads they run. A WSJ piece doesn’t find anyone admitting to resorting to the “unthinkable” (e.g., spyware). The changes spotted at major sites are more subtle and restrained than that. And they mostly represent a branching out of existing efforts, such as video sites like Veoh and Dailymotion making more use of pre-roll. In two other cases that have been evolving over the past several months, WSJ.com and NYTimes.com have been offering more online real estate space to web advertisers. Still, to listen to these and other web publishers and online ad sellers, the perilous economic situation has nothing—or perhaps very little, really—to do with these expanded ad moves.

—Plain banners won’t cut it: These times cry out for more than just a simple banner ad. Considering that display was already looking sluggish even before the global financial meltdown this fall, the miserable economy surely makes it easier for web publishers and marketers to push the ad format’s envelope a bit, even if it appears to rank as a poor excuse for doing so. For example, this summer saw the introduction of those Mac ads across the top of the NYT’s homepage. The new year will likely bring more “welcome page” greetings from advertisers on the NYTimes.com and other publishers’ pages. More interesting were the ads promoting the theatrical release of The Incredible Hulk on Break.com

—Mixing editorial and ads: There’s nothing new about ads that closely resemble posts on a given blog. But some, like online celebrity gossip PerezHilton are going much further in blurring the line between editorial and marketing. For example, Perez has appeared in a video on his site promoting the romantic comedy Bride Wars. Still, considering that Perez doesn’t operate a hard news site, and he’s become something of a celebrity in his own right, his audience probably won’t hold it against him as long as his shilling is entertaining. Henry Copeland, the CEO of Blogads.com, which helps sell ads on PerezHilton and others, calls the move “absolutely crucial,” again, not because of the economy necessarily, “but because there are so many billions of impressions out there.”

Edgar Bronfman, Jr.‘s Warner Music Group (NYSE: WMG) may not be close to settling its disagreement with YouTube over music video revenue but at least he’s out from under a $100 million lawsuit. The lawsuit, a hangover from the $2.6 billion leveraged buyout of the music company from Time Warner (NYSE: TWX) in 2004, was filed by former Simon & Schuster CEO Richard Snyder in 2007. Snyder claimed he wasn’t compensated properly for his role in bringing investment bankers to the deal and sued Bronfman personally. But the New York Supreme Court disagreed, dismissing the case Tuesday and ordering Snyder to cover the court costs. Warner CEO Bronfman said Snyder’s role was exaggerated. The court cited a statute (pdf, page 58)  that voids oral agreements to compensate for negotiations.

Dealbook: “‘Today’s decision confirmed what we have said all along – that Dick Snyder’s claims were nothing more than a work of fiction,’ Mr. Bronfman’s attorney, Orin Snyder, said in a statement.”

—Departing Time exec’s online/offline disappointment: Ed McCarrick, who leaves Time magazine after 35 years this week to go to Omnicom barter unit Icon International, tells AdAge’s Nat Ives that one of his biggest disappointments was not being able to change advertisers’ habits about selling beyond the paid subscription. Two years ago, McCarrick began trying to convince marketers and agencies to buy against the entire audience across print, digital and mobile. But “when you go in and have conversations, 99.9% of the time, with an agency—or even a client, for that matter—you talk about audience primarily. I don’t think that’s changed.”

—YouTube tries to cure pharma marketers’ “Excedrin Headache”: YouTube’s sponsored contests are pretty run of the mill at this point. But the Google-owned video channel hopes its Excedrin video challenge promoting the painkiller’s curative speed this fall will open the doors to a marketing category that’s remained averse to YouTube ads: big pharma. YouTube is trying to use the campaign—emphasizing Excedrin’s control on the placements—as proof that being surrounded by user-gen won’t cause the heavily-regulated drug makers any huge headaches (pardon the pun).

—Publishers Clearing House hopes to win digital sweepstakes: Speaking of contests, Publishers Clearing House has parked the Prize Patrol Van with its over-sized checks. Instead it is taking its sweepstakes to Twitter, the iPhone, MySpace and Facebook, offering prizes ranging from $100 to $2,500. Realizing that many younger consumers might not even know what PCH is, the company has bought time on MTV’s The Real World to promote the digital contests. Still, the gambit is long on hope, short on strategy. As Alex Betancur, VP/GM of the PCH Online Network concedes: “The truth of the matter is, we have no idea how we would make money on Twitter.”

—You can judge a company by its website: When consumers were asked how they define a company’s brand, they say it’s the entity’s web presence that provides the best look. An unpublished survey by brand consultant MS&L and audience researcher GfK Roper surveyed 6,000 consumers in the U.S., U.K., France, Italy, Sweden and China on the issue found that U.S. individuals were most likely to consider a company’s website when making a determination about a company’s values.

Another sign of how newspapers and other media outlets are trying to change models in tough times ... In one of the highest-profile examples of news sharing between major media, the Baltimore Sun and the Washington Post have agreed to share some sports and Maryland coverage. Both papers have been trimming staff to cut costs as revenues drop; the Sun is under the extra financial pressure of being owned by the bankrupt Tribune Co. The agreement leaves room for each paper to retain its exclusives and for dual coverage. Articles in areas where the two consider themselves direct competitors—Maryland state government, for instance—also are carved out. But the two will no longer block use of national, international or feature articles carried by the Los Angeles Times-Washington Post (NYSE: WPO) News Service in the competing paper. The Post outnumbers Sun subscribers roughly 3 to 1 (622,714 to 218,923) with some overlap. Release.

On the digital side, according to the AP, the agreement allows online sharing but only after articles appear in print in the originating paper.

WaPo: The arrangement starts Jan. 1. “Robert J. McCartney, the Post’s assistant managing editor for Metro news, said his staff would coordinate with Sun editors on stories in some areas of Maryland. ‘So, if a story broke on Eastern Shore or in Western Maryland, then we’d talk with the Sun and figure out who was in a better position to send a reporter, and both papers would use that reporter’s story. ... Of course, both papers can send their own reporters if they choose.’”