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As I was reading about CBS' $1.8 billion purchase of CNET on MarketWatch.com, I couldn't help but remember when CBS purchased MarketWatch.

Today, MarketWatch is owned by Dow Jones. And Dow Jones, of course, is owned by Rupert Murdoch.

Meanwhile, you have Norman Pearlstine (previously head a top honcho at Time Inc. and the Wall Street Journal) hired by Bloomberg, another online powerhouse.

The common denominator: Online is where many, if not most, people are getting their news.

This implies several things:

1) The continued deterioration of newspapers, and possibly soon, of magazines.

2) An acceleration of the massive shift of advertising from traditional media to the Web.

3) A growing recognition by TV powerhouses like CBS that the Internet is no longer just a vanity play or a way to promote their shows. It's a major piece of their future revenue as viewers fly from TV to the Web.

For those of you who missed iHollywood Forum and NXTcomm's Q&A with Survivor and Apprentice Producer Mark Burnett about the future of digital content delivery, just click on the image to the left to go a page with links to view the video. (About the middle of the page; Quicktime and Windows Media). NXTcomm is the replacement show for the giant Supercomm show, produced by the Telecommunications Industry Association and the U.S. Telecom Association. Burnett will be keynoting NXTcomm08, which is dedicated to the intersection of voice, data and content.

iHollywood Forum will be co-producing Communications Goes Green with NXTcomm on June 19 at the Las Vegas Convention Center. Keynotes include AT&T's Dorothy Attwood, Senior Vice President for Regulatory Planning & Policy and Chief Privacy Officer; and Verizon's Kathryn C. Brown, Senior Vice President
Public Policy Development & Corporate Responsibility.

If you're involved in IPTV, cable or broadcast TV content and infrastructure, and if environmental concerns are important to your business, this is the show for you.

Happy to report that Marshall Herskowitz joins us as a keynote for the upcoming Digital Media Summit on June 9-10 (combined with Music 2.0) Most recently President of the Producer's Guild of America, Herskowitz is also an Emmy-winning writer, director and producer, whose range extends from The Last Samurai to thirtysomething. In her keynote, Charlene Li, principal analyst at Forrester Research and author of Groundswell,will expand upon the book's theme of winning in a world transformed by social technologies-- a major theme of the conference... Look for other keynote announcements in the next few days...

Sprint Nextel and Clearwire's reported $12 billion joint venture to roll out ultra-fast wireless Internet access would be a significant boost to the cellular aspirations of Comcast, Time Warner Cable and Google.

The Wall Street Journal said the two companies have raised $3.2 billion in outside financing, including $1.05 billion from  Comcast, $550 million from Time Warner Cable, $500 million from Internet giant Google and  $1 billion from Intel. 

Cable companies are fretting at the wireless advantage of AT&T and Verizon, both of which have rolled out IPTV service to millions of customers over the last year. This combination, which reportedly will allow them to brand the service as their own, would allow them to add high-speed wireless to their TV, Internet and telephone options.

For Google, the deal helps cement its position as the dominant search provider in wireless in advance of an expected Google phone over the next 12 months.

Intel, which wil merge its broadband wireless services into Clearwire, gets a new breath of life for its data services, which have been sorely underutilized as subscribers flee its service.

According to the Journal, the new service will ultimately be as much as eight times faster than existing coverage.

Analysts are already pontificating about the prospects for Microsoft launching a new Yahoo bid if the search giant's stock continues to plunge.

But I wonder if history will judge the real story of the failed bid to be the end of Microsoft's last, best attempt to remain the dominant force in modern computing.

Google as clearly donned that mantle, as the Internet -- not the operating system -- becomes the central feature of most people's computing experience.

Yahoo's cozying up to Google reminds me of a kid hiding behind his Dad and telling the neighborhood bully, "Back off or he'll whup you!"

I was struck by software pioneer Mitchell Kapor's comparison today of Microsoft to IBM, weakened in the 1980s and early 1990s by its antitrust woes and the shift of the mainframe to personal computers.

“I.B.M. came out of those years still large and enormously important to its customers, but I.B.M. was displaced by Microsoft,” Kapor told New York Times reporter Steve Lohr. “I.B.M. was no longer the defining company.” 

Microsoft is far too important a company to be driven out of business -- at least in the forseeable future. But is Microsoft the 21st century's IBM?

Nuru Rimington-Mkalif

Nuru Rimington-Mkalif is a 21-year-old, unknown, London-based filmmaker who suddenly finds himself represented by William Morris Agency and positioned to make a Hollywood feature film -- because of an online contest. 

Filmaka.com, the online studio created by former Fox TV chief Sandy Grushow and "Bend It Like Beckham Producer" Deepak Nayar, selected Rimington-Mkalif from among hundreds of online contestants. The site relied on a combination of online peer review from 3,600 members and the opinions of people like actor Bill Pullman ("Sleepless in Seattle") and producer Laura Bickford ("Traffic")

"I never allowed myself to think I would win," Rimington-Mkalif said in an interview. "I just focused on getting it done."

Rimington-Mkalif was one of 15 finalists who were told to create a short film around the theme "The Secret Adventures of..."

Filmaka will fund production of the film from backers such as Aramid Entertainment, and India's Future Capital Holdings.

Studios often spend tens of millions of dollars to develop films that aren't made or pay established talent to direct and produce it. This approach provides an alternate channel -- as well as easy transition to making webisodes or TV shows. fX, the Fox cable channel, is also using Filmaka to scout for talent. 

Google News Milken Global Conference

Former Wall Street Journal Publisher Gordon Crovitz  phrased the problem facing newspapers succinctly: "Print revenue has declined much faster than online can be built up," he told the audience at the Milken Global Conference. "We're trading newspaper dollars for online nickels."

The newspaper business is a microcosm of the dilemma faced by all traditional media: How do you move to a new medium you know is your future, when the financial model isn't worked out?

Philadelphia Inquirer Publisher Brian Tierney, for example, told how he traded a $700 two-day ad in the newspaper ad for a $300 online spread for a week -- and explained that it was the right decision because the client and readers were better served.

So how will he stay in business?

First, "focus like a laser beam" on costs. He's cut 40 or 50 journalists from the staff as well as a number of ill-defined positions, eliminating about $40 million in costs along the way. (I wonder, though, if that's an example of curing the problem and killing the patient).

Second, know his market and push it aggressively online. "When you read about Philly, we want to dominate that market," he said.

By being that kind of local resource, he estimated, the Los Angeles Times has generated more than $100 million in ad revenue. It's "not a pipe dream" to push the Inquirer's online ad revenue from $25 million to $75 million.

I read just now that liberal agitator MoveOn.org has attracted 3 million people to vote online for its "Obama in 30 Seconds" contest to pick which Obama advertisement gets picked for national TV.

And I suddenly realized that the long-predicted democratization of content distribution may finally be underway. As I see online contest after contest (See my posts this week on Filmaka.com and Massify.com and others to come on songwriting and comic book contests) bring in hundreds, thousands, millions of ordinary folks to vote on their favorite content,  submit themselves to the will of the masses and create hits, I'm thinking perhaps we have reached the cross-over point, where we're finally at the cross-over point -- where  advertising executives, record executives, studio chiefs, publishers are only one piece of the content food chain, not the sole arbiter of what content the public sees and hears.

The extraordinary success of American Idol -- with its millions of fans who create a built-in audience for home-grown stars like Kelly Clarkson --is clearly the original source for this contest craze. But it's now clear that the model can translate into virtually any medium some segment of the population cares passionately about.

We already know user-generated content on sites like YouTube can attract millions of viewers. Now we know users can also determine what Hollywood or Madison Avenue create.

This doesn't mean the suits go out of business. It actually means they may have a much less expensive way of figuring out who's a star, what content sells and creating an audience. And, in true Hollywood fashion, you can bet the studio suits will take credit for the idea once they've watched the smaller guys flounder their way to success.

Filmaka promises to create A-list directors out of ordinary people who submit videos online. Massify.com is pulling the same stunt with actors, urging its community to vote on who should get the top 20 acting slots in a horror film.

In a contest ending today (Friday), aspiring actors uploaded auditions to the site that were then judged by their peers. Whether those votes actually count toward who gets cast is a question I can't yet answer; as I write, the site is down to "tally votes" and I haven't yet had a chance to interview the founders.

 Actress Deborah Geffner ("All That Jazz", "Monk", "ER", "Infestation", among many others) heard about the site when her agent told her she should audition for a horror movie called Ghosts in the Machine. The audition, which was filmed, went like any of the dozens of others she's done. Then the casting director told her an online community would vote on whether her audition was worth considering -- and she would have to upload the video herself.

"I thought that was the real horror movie," she said. "It took me four days to do it."

Check out her audition below.

I've been writing the last few days about the Hobson's choice faced by TV networks and other content providers: either cannibalize the revenue from your TV programs  by airing them with less profitable ads on the Web; or keep them on TV -- and watch users copy them and post them for free on the Web.

At the 11th Annual Milken Institute Global Conference on Monday, I'll have a chance to flesh out the paradox on a panel with Eric Feng, Senior Vice President of Audience and Chief Technical Officer, Hulu.com; Albhy Galuten, Vice President, Digital Media Technology Strategy, Sony Corporation of America; Andres Jordan, Vice President, Innovation, T-Systems (Deutsche Telekom North America); and Gene Meieran, Senior Fellow, Technology and Manufacturing Group, Intel.

Hulu.com -- NBC Universal and Fox's joint venture that offers full-length episodes from more than 50 broadcast networks and more than 250 TV series, from The Simpsons to Miami Vice -- has clearly decided a good offense is better than a play-scared defense (a la record labels). 

Sony's Albhy Galuten --probably the only Grammy-winning songwriter who's equally at home in high technology -- knows better than most the trade-offs content creators must consider to survive in the digital age.

You can sum it up as surfing: put out enough free content to make sure you have a stake in whatever business model comes down the pike; but not so much that you destroy your core business.

A suitable analogy for a Southern California conference.

Apparently, pulling new episodes of "Gossip Girl" from the Web didn't hurt CW's re-launch of the show on Monday, although whether the show benefits in the long-term remains to be seen. CW said the freshman show's Nielsen ratings were 25% ahead of its season average and its third-best showing ever on Monday night. CW decided to pull new episodes of the show from the Web in an effort to bolster its TV audience, where its real advertising dollars lie. The experiment is being closely watched by other networks such as ABC, NBC and Fox, which have largely made their hit TV shows available for free on the Internet.

The Nokia N91 music phone

Nokia and Sony BMG's announcement today that buyers of select Nokia phones will get complete access to the Sony BMG's entire music catalog is a model that's likely to be repeated over and over in the years ahead.

Financial details weren't disclosed. But presumably Nokia -- which signed a similar deal a similar deal with Universal Music Group earlier this year -- is paying a hefty licensing fee for this interesting marketing vehicle: $20 (my number) for every phone sold? Not a bad idea.

Traditionally, music executives have decried the idea of allowing their songs to be "loss leaders" for other products, arguing that music is "devalued" if customers don't pay for it. They've now suffered enough pain that any payment mechanism has to look attractive.

This one still has holes: users can't burn the songs to CDs or iTunes, the two most popular ways of listening to digital music. But they do get to keep the music they download after 12 months.

If you think about it, there aren't too many consumers products that wouldn't work for free music downloads, so long as consumer products companies are willing to pay the freight -- and the labels take the plunge.

Filmaka, the filmmaking site run by former Fox TV chief Sandy Grushow and "Bend it Like Beckham" producer Deepak Nayar, plans to announce its first contest winner on Monday, according to a spokeswoman. The winner will get financial backing to make a film and representation by the William Morris Agency. More in earlier blog .

Fetch DVD! Video

The Motion Picture Association of America, tireless in its attempts to educate  youngsters about the evils of stealing movies, has adopted a unique new approach: DVD-sniffing dogs.

Lucky and Flo, "the world's first-ever" DVD-sensitive canines, paid what the MPAA termed a "fun and exciting" visit to Clover Avenue Elementary School in Los Angeles.

If children are entertained by the notion that Hollywood dogs will rip their faces off if they download films, we've got a problem in society more serious than piracy.

Filmaka's Nayar

With TV pilots costing millions of dollars, why not test the product and your directors first on the Internet?

That's what Filmaka.com, launched today by former Fox TV chief Sandy Grushow and "Bend it Like Beckham" producer Deepak Nayar, aims to do. And along the way, it aims to build an audience for the website by hosting online competitions for directors and writers for TV pilots and online series.

The site plans to announce its first contest winner on Monday, according to a spokeswoman. The winner will get financial backing to make a film and representation by the William Morris Agency.

While in beta, Filmaka has amassed a community of more than 3,600 aspiring filmmakers from 95 countries and started production on about 40 Web series, according to the Los Angeles Times.

The beauty of the approach is that even if Filmaka doesn't find any talent (and there aren't many examples yet of online recruiting launching TV hits), it still captures a big Web audience of consumer hopefuls. FX may be thinking the same thing with its "You have an idea for a TV comedy; we have a TV network" on Filmaka.

Filmaka's model closely follows the one developed by Veoh.com, the video-hosting site backed Michael Eisner, Goldman Sachs and other A-list Hollywood and media investors. United Talent Agency signed on to that deal.

An interesting potential payoff for Veoh and Filmaka: move web content to  TV. D-Link today announced a new device that allows Veoh users to stream their favorite Web shows through their TV sets.

You can bet every network in town will be carefully watching Gossip Girl's ratings when the show resumes on Monday.

That's because fifth-ranked CW is doing the unthinkable: pulling the web-spawned show's free Internet stream for this season's remaining shows in an attempt to boost the number of viewers.

Behind CW's move is simple math. The U.S. networks reeled in $42.3 billion in TV ad revenue last year. By contrast, total Internet ad revenue -- that means networks, newspapers, dedicated websites and everybody else -- was about $21 billion in 2007. Up 25%, yes, but still apparently not enough to counter-balance the cannibalization of TV shows on the web.

Translation: if CW adds a million viewers for Gossip Girl on TV, it will make a lot more money than if it adds a million viewers on the Internet.

The move by CW, a joint venture of Warner Bros. and CBS Corp., comes as the other networks fall over each other to make their fare available for free online. Hulu.com -- NBC Universal and Fox's joint venture that opened to the public last month -- brags of offering full-length episodes from more than 50 broadcast networks and more than 250 TV series, from The Simpsons to Miami Vice. Most major TV networks stream at least some prime-time content for free on the Internet.

Whether CW's move is more than a finger in the dike -- or even works at all -- is anybody's guess. But everyone in Hollywood undoubtedly is applauding CW's noble experiment in reverse logic, and thanking their lucky stars they're not the ones taking the bullet.

While it's easy to see what AOL gets out of a potential merger with Yahoo!, it's harder to see what Yahoo! gets.

Digital Cities/AOL's own former managing editor, after all, recently called the challenge of reviving AOL -- 20 million of whose users have fled since 2002 -- akin to "making a Marc Jacobs purse out of a sow's ear."

AOL seems sadly lost in the broadband age. The very thing that powered its initial rise to prominence -- its $9.99 dial-up service -- has now become a liability in negotiations with potential suitors. Its own search capabilities are touted as "enhanced by Google".

Were Yahoo! to combine with AOL, it may choose to grab AOL's remaining 10 million members and its workable sub-brands,

and, taking its cue from Time Warner's Life Magazine, allow AOL to gently fade into the history books.