NEW YORK — Advertisers and marketers, struggling to keep up with changing consumer habits, are about to make massive investments in new digital and out-of-home media platforms, according to a forecast out today from research firm PQ Media.

It says that companies will spend more than $160.8 billion in 2012 — up 82% from 2008 — on 18 emerging markets including online videos, store-based TV screens, sponsored events, TV and movie product placements, cellphones, video games and digital video recorders.

“Americans are spending more time out of the home, working late hours, communicating via wireless devices, shopping in malls and stuck in traffic,” CEO Patrick Quinn says. “There has to be some change in (ad/marketing) strategies to reach these people.”

He expects the new platforms to account for nearly 27% of all ad and marketing spending in 2012, up from 16% this year.

Companies will increase their sales budgets and shift dollars away from traditional media, including broadcast TV, newspapers and magazines, PQ predicts.

One risk in the forecast — which PQ calls the first comprehensive analysis of the alternative media market — is that some figures are based on data that are not time-tested nor universally accepted.

Quinn says he assumes that “businesses are going to create trade organizations and standard metrics.” Then, “Some variables could change.” Sectors that PQ expects to see the biggest gains by 2012 include:

•Online search. Spending will grow 113%, to $26.1 billion, for ads and services at giants, including Google (GOOG) and Yahoo, (YHOO) as well as smaller providers such as ClipBlast and Citysearch. The big attraction is that these sites, in addition to displaying ads, also generate leads as customers click through to a sponsor’s site.

•Event sponsorships. Companies will spend more than $33 billion, up 72% from last year, to attach their brand names to sports, music, theater and other events. The trend is already well underway: Sponsors paid more than $2 billion last year on pro football, baseball, basketball and hockey.

Here, too, companies like the opportunities events provide to connect with new customers.

•E-direct marketing. Marketers will spend $22.1 billion, up 121%, to pitch messages to consumers via e-mail and pop-up ads.

Lots of people respond to e-mails, especially those that offer special deals for products or services that they like. Still, many recipients also increasingly are turning to spam-blocking software to keep from being inundated with junk e-mail.

•Online video and rich media. Opportunities are opening to reach potential customers with ads in or next to Internet video clips. In addition, many sites provide interactive services — for example, clothing retailers make it possible for visitors to visualize how a shirt might look on them. Spending on these sites will grow 389%, to $12.2 billion.

Median home prices in the Central Valley have dropped to 2004 levels – or further, according to figures compiled by DataQuick Information Systems of La Jolla, a real estate information company.

But the president of a Sacramento company that matches distressed homeowners with investors and prospective buyers says this could be a signal for buyers to re-enter the market.

Patrick McGilvray, president of the Web-based company TheHomeBuyingCenter.com, a unit of Online Broadcasting Systems Inc., says the drop in prices means more average workers will be able to afford home ownership.

Gone are the sky-high prices of 2005, he says, and in their place are homes in the Stockton, Modesto and Sacramento areas priced as low as $100,000. Sellers are more realistic about asking prices, he adds.

“What we’re seeing out there is a return to sanity in terms of housing prices relative to people’s incomes,” he says.

Mr. McGilvray says a key to success in today’s market for buyers is to be pre-qualified for a mortgage before they start home shopping. He says this allows buyers to move quickly when they spot the right property.

Mr. McGilvray talks about the Central Valley housing market in today’s CVBT Audio Interview. Please click on the link below to listen or to download the MP3 audio file to your computer or iPod.

http://www.centralvalleybusinesstimes.com/links/mcgilvray.mp3

http://www.centralvalleybusinesstimes.com/stories/001/?ID=8215

By Georg Szalai

NEW YORK — Time Warner’s AOL has agreed to acquire global social network Bebo, which has a total membership of more than 40 million worldwide, for $850 million in cash.

The company is one of the leading online social networking providers in the U.K. and is the top-ranked network in Ireland and New Zealand. It says it is No. 3 in the U.S.

Bebo said Thursday its users view an average of 78 pages per usage day.

AOL said that Bebo’s offers fit in with its existing services, such as AIM.

“Bebo is the perfect complement to AOL’s personal communications network and puts us in a leading position in social media,” chairman and CEO Randy Falco said. “This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers.”

The deal is the latest in an AOL spending spree. The company said it has spent nearly $1 billion on online advertising acquisitions, including of such companies as AdTech, buy.at, Lightningcast, Quigo, Tacoda and Third Screen Media.

Bebo also bolsters AOL’s international growth. It has launched 17 international Web sites over the last year and plans to expand to 30 countries outside the U.S. by the end of 2008.

Bebo was founded by Michael and Xochi Birch. It has 11.4 million unique users in the U.K.

By MICHAEL LIEDTKE

SAN FRANCISCO (AP) — Google Inc.’s long-anticipated acquisition of online ad service DoubleClick Inc. is expected to turn the Internet search leader into an even more powerful marketing vehicle that’s fueled by better insights about consumers.

The $3.1 billion deal, completed Tuesday after nearly a year of regulatory wrangling, also may intensify the pressure on Microsoft Corp. and Yahoo Inc. to resolve their stormy courtship so they don’t risk further distractions while Google tries to sprint further ahead in the race for Internet advertising.

Google took control of DoubleClick a few hours after Europe’s antitrust regulators removed the final stumbling block by approving a deal that was first announced 11 months ago.

U.S. regulators cleared the transaction in December, casting aside objections from Microsoft and other companies that argued DoubleClick would give Google too much control over online advertising and potentially sensitive information about consumer behavior on the Internet.

Besides opening up new opportunities, Google’s takeover of DoubleClick will create more challenges for a management team already grappling with concerns about how the slowing U.S. economy will affect the company’s earnings growth this year.

Google Chairman Eric Schmidt acknowledged in a statement that the biggest acquisition in the company’s 9 1/2-year history probably will trigger an unspecified number of layoffs after years of relentless hiring. The looming job cuts will be concentrated in the United States, although Schmidt said offices in other countries could be affected.

New York-based DoubleClick has 1,500 employees with offices in France, England, Germany, Ireland, Spain, Australia and Spain. Mountain View-based Google employs nearly 17,000 workers, up from 1,600 just four years ago.

Google’s recently slumping shares soared with the rest of the stock market Tuesday, gaining $26.22, or 6.3 percent, to $439.84. The company’s stock price remains down by 36 percent so far this year.

DoubleClick is expected to broaden Google’s already extensive reach in the $40 billion Internet advertising market.

Google has been the market’s most dominant player so far, generating more than $16 billion in revenue last year. Most of the money flowed in from short, written ads that Google places alongside search results and other Web content.

DoubleClick specializes in placing more dynamic, multimedia ads, a form of marketing that is expected to become more important in the next few years as big companies spend more money promoting their brands online.

With somewhere between $300 million and $400 million in annual revenue, DoubleClick isn’t expected to have a significant impact on Google’s profit this year.

But the addition is bound to give Google an important advantage over its rivals, said Russ Mann, chief executive of Covario, which helps manage and analyze online advertising campaigns.

“Google is going to be like a runaway locomotive coming full steam ahead now,” Mann said.

Standard & Poor’s equity analyst Scott Kessler isn’t convinced the deal will pay off for Google as quickly as some might think, largely because the company doesn’t have a track record of mining big profits from its past acquisitions. For instance, Google paid $1.76 billion for online video leader YouTube in November 2006, but the site still isn’t producing significant profits.

“It’s definitely a big deal, but whether they can execute on the potential remains to be seen,” Kessler said.

But just the prospect of Google growing even stronger now that DoubleClick is in its fold could be enough to prompt Microsoft to step up its pursuit of Yahoo or withdraw its offer to spend the money on other expansion opportunities.

“Everyone knew the (DoubleClick) deal was coming, but (the consummation) probably contributes a degree of urgency because now it is real,” Kessler said.

Microsoft has offered to buy Yahoo for more than $40 billion, but the unsolicited bid has been at a standstill for the past month because the two sides can’t agree on a price.

Both Microsoft and Yahoo had opposed Google’s acquisition of DoubleClick, arguing that it could stifle competition in the online advertising market and potentially compromise consumer privacy.

Representatives of both Microsoft and Yahoo declined to comment Tuesday.

Google’s pursuit of DoubleClick had a domino effect almost as soon as the two companies announced their marriage plans last April. Within a few months, Microsoft, Yahoo and Time Warner Inc.’s AOL had spent more than $7 billion snapping up other online ad networks and tools to mount a counterattack.

Besides helping Google build a one-step shop for advertisers and Web publishers, DoubleClick also brings a wealth of information about consumer behavior accumulated through years of tracking online surfing.

Coupled with the knowledge Google has gleaned from analyzing its users’ search requests, DoubleClick’s data will provide an even better understanding about what appeals to each individual consumer.

Google, which has embraced “don’t be evil” as its motto, has pledged to vigilantly guard the information. Management believes the data will lead to more relevant and less annoying ads, making the Internet more enjoyable.

“We will be able to help publishers and advertisers generate more revenue,” Schmidt wrote. “That in turn will fuel the creation of even more rich and diverse content for Internet users everywhere.”

But consumer watchdogs are worried about too much power — and information — being concentrated at a single company.

The Center for Digital Democracy, a privacy advocate, said regulators’ failure to impose safeguards had “helped strengthen a growing digital colossus that will now be in a dominant position to shape much of the global future of the Internet.”

By RYAN NAKASHIMA

The Walt Disney Co. expects to collect $1 billion in revenue from online content this fiscal year, a significant rise from estimates for fiscal 2007, CEO Robert Iger said Monday.

Iger told analysts the company has been “fairly aggressive” in expanding onto the Internet to extend consumer contact with its most popular franchises and create new revenue streams.

“If we’re not there, (people) will just access someone else’s content,” he said in comments Webcast from Bear Stearns’ 21st Annual Media Conference in Palm Beach, Fla.

Disney’s online revenue came from advertising during its ABC network hits such as “Lost” and “Grey’s Anatomy” that are rerun on ABC.com; ads on sites such as ESPN.com; subscriptions to online games; downloads of movies and music; and e-commerce that is not related to its theme parks.

Online sources account for less than 3 percent of company revenue. Disney posted total net income of $4.7 billion on $35.5 billion in revenue last year.

The last time the company estimated digital revenue was in June 2007, when chief financial officer Tom Staggs said he expected the company to post more than $700 million for fiscal 2007, which ended in September.

The company does not break out online revenue in its quarterly earnings releases.

Last month, Disney announced it had created a special studio to develop short-form dramatic and comedy series exclusively for broadcast on ABC.com and Google Inc.’s YouTube.

By Michele Gershberg

WILMINGTON, Delaware (Reuters) - As a legal battle between Barry Diller and John Malone headed to court on Monday, the biggest surprise may just be that two of the media industry’s largest personalities have let their dispute get this far.

IAC/InterActiveCorp Chief Executive Diller and Liberty Media Chairman Malone are fighting over the future structure of IAC under a plan to spin off four of its largest units.

Long-time business partners, their relationship turned bitter when Diller proposed a structure that would dilute Liberty’s voting control over the spin-offs.

Both Diller and Malone are known for their strong wills and complex deal-making, but people who have followed their business dealings are surprised they were unable to settle their differences before the trial in Delaware Chancery Court.

“Diller and Malone have had a relationship for 20-plus years,” said April Horace, an analyst for Janco Partners who has long covered Malone’s Liberty Media. “Malone usually negotiates something … It does surprise me that this particular time he has not been able to.”

In the meantime, IAC’s outside shareholders continue to see their investment bleed value over fears that the spin-off will be delayed, Diller will be ousted or IAC will be forced to swap assets with Liberty at a lower price to end the dispute.

IAC shares have slid 21 percent since the two companies sued each other in late January. At least two shareholder lawsuits have been filed against IAC’s board, one of them also naming Liberty Media.

“I think the stock is worth $40 and it trades for $19.50,” said one IAC shareholder who did not want to be identified due to a company policy on discussing holdings. “It’s just insane unless you think you’re going to get completely screwed by Malone in some form that you can’t even dream of.”

Sanford C. Bernstein analyst Jeffrey Lindsay still believes the spin-off plan is the best possible outcome for outside shareholders, but he recommends waiting until some white smoke is visible from the proceedings in Delaware. While IAC shares are cheap at this point, they could represent a value trap.

“We can still see downside for IAC investors, especially if a value exchange is made to persuade Liberty Media to forgo its super-voting rights,” Lindsay said in a note to clients on Friday.

Diller moved quickly to calm nerves at the company. “At the end of the day, it’s purely a business dispute,” Diller told employees in an internal memo originally posted online by digital media blog paidContent.org. “We are highly confident in our legal position and are looking forward to proving our case to the judge.”

HSN SWAP

Malone and Diller had long discussed a potential swap for IAC’s home shopping network HSN, and possibly other assets, in return for Liberty’s stake in IAC, but were unable to agree on the proper value to ascribe to the assets. Liberty holds about 30 percent of IAC but controls 62 percent through a second class of super-voting shares.

What they have swapped is cutting remarks since the legal battle began, with Diller at one point referring to Liberty executives as “insane” and Liberty accusing the former television and film executive of staging a corporate coup.

Even though back-channel talks continued in recent weeks, the two sides remained far apart on how to reach a settlement, a source familiar with IAC’s thinking told Reuters last week. As of Sunday night, no imminent agreement appeared to be in the works.

“John is like a big cat in the Serengeti. He’s pretty fierce and he can lay in wait for quite a while for his prize,” said Mark Robichaux, editor of industry trade Broadcasting & Cable. Robichaux wrote a biographical portrait of Malone in the 2002 book “Cable Cowboy.”

But by taking their battle all the way to court, both stand to lose at least part of their demands, Robichaux said.

Liberty is unlikely to prevail in its request to oust Diller and six of his close associates, including wife Diane Von Furstenberg, from the IAC board, while Diller may not be able to go ahead with the spin-off without a major concession to Liberty on price or control.

By AMY WESTFELDT

NEW YORK Gov. Eliot Spitzer, the crusading politician who built his career on rooting out corruption, apologized Monday after he was accused of involvement in a prostitution ring. He did not elaborate on the scandal, which drew calls for his resignation.

His stoic wife at his side, Spitzer told reporters at a hastily called news conference: “I have acted in a way that violates my obligations to my family.”

“I have disappointed and failed to live up to the standard I expected of myself,” he said. “I must now dedicate some time to regain the trust of my family.”

Spitzer’s involvement in the ring was caught on a federal wiretap as part of an investigation opened in recent months, according to a law enforcement official who spoke to The Associated Press on condition of anonymity because of the ongoing inquiry.

The New York Democrat, identified in legal papers as “Client 9,” met last month with at least one woman in a Washington hotel, the law enforcement official said.

The prostitution ring, identified in court papers as the Emperors Club VIP, arranged connections between wealthy men and more than 50 prostitutes in New York, Washington, D.C., Los Angeles, Miami, London and Paris, prosecutors said. Four people allegedly connected to the high-end ring were arrested last week.

The club’s Web site displays photographs of scantily clad women with their faces hidden. It also shows hourly rates depending on whether the prostitutes were rated with one diamond, the lowest ranking, or seven diamonds, the highest. The most highly ranked prostitutes cost $5,500 an hour, prosecutors said.

The scandal was first reported on The New York Times’ Web site.

Spitzer spoke hours later. Stunned lawmakers gathered around televisions at the state Capitol in Albany to watch, and a media mob gathered outside the office of Lt. Gov. David Paterson, who would become governor if Spitzer was to resign. It took opponents only minutes to call for his resignation.

“Today’s news that Eliot Spitzer was likely involved with a prostitution ring and his refusal to deny it leads to one inescapable conclusion: He has disgraced his office and the entire state of New York,” said Assembly Republican leader James Tedisco. “He should resign his office immediately.”

Spitzer, 48, built his political reputation on rooting out corruption, including several headline-making battles with Wall Street while serving as attorney general. He stormed into the governor’s office in 2006 with a historic share of the vote, vowing to continue his no-nonsense approach to fixing one of the nation’s worst governments.

Time magazine had named him “Crusader of the Year” when he was attorney general and the tabloids proclaimed him “Eliot Ness.”

But his term as governor has been marred by problems, including an unpopular plan to grant driver’s licenses to illegal immigrants and a plot by his aides to smear Spitzer’s main Republican nemesis.

Spitzer had been expected to testify to the state Public Integrity Commission he had created to answer for his role in the scandal, in which his aides were accused of misusing state police to compile travel records to embarrass Senate Republican leader Joseph Bruno.

Spitzer had served two terms as attorney general where he pursued criminal and civil cases and cracked down on misconduct and conflicts of interests on Wall Street and in corporate America. He had previously been a prosecutor in the Manhattan District Attorney’s Office, handling organized crime and white-collar crime cases.

His cases as state attorney general included a few criminal prosecutions of prostitution rings and into tourism involving prostitutes.

In 2004, he was part of an investigation of an escort service in New York City that resulted in the arrest of 18 people on charges of promoting prostitution and related charges.

By Alex Woodson

NEW YORK — Generate, the digital production studio run by former WB Network CEO Jordan Levin, has secured $6 million in financing from Velocity Interactive Group, the new-media investment group run by former News Corp. and AOL execs.

Generate, which manages clients and creates original content, was founded two years ago by Levin and had an exclusive production contract with MTV Networks, which yielded Web series “Home Purchase Club” on VH1’s Vspot among other offerings. That agreement, though, ended last fall, and the studio is looking to spread its content through different Web destinations or traditional media.

“We’re talking with all platforms,” said Levin, Generate’s CEO. “We view our job as creating quality content that uses digital primarily to incubate and feed ideas and tying advertisers in as partners to ride alongside that distribution strategy.”

Former Fox Interactive Media president Ross Levinsohn, a partner at Velocity along with former AOL CEO Jonathan Miller, said Levin has proved that he’s able to “produce cheaply and manage efficiently,” a must in the Internet world, as evidenced by the relatively small $6 million investment.

“It could set a new model for all media, and he’s willing to try that,” Levinsohn said. “He’s a risk-taker, and in any industry that’s trying to reinvent itself you need risk-takers.”

Levin’s management team includes former CAA executive Jared Hoffman and “Bernie Mac” producer Pete Aronson.

Velocity also recently invested in online video ad company Broadband Enterprises. Levinsohn said that stake, along with the one in Generate, “certainly resonate together.”

Generate also unveiled a new production slate. “Pink — The Series” is a follow-up to a Web show that bowed in September and has garnered more than 4 million views; “LaQuisha” is based on a character created on L.A. radio station KROQ-FM; and “Knockers” is a comedy show from sketch group Good Neighbor.

Generate clients include Trevor Moore from Whitest Kids U Know, a comedy troupe with a show on IFC. The company is also one of the producers of the “Andy Milonakis Show.”

By Rick Aristotle Munarriz

It seems as if Google’s (Nasdaq: GOOG) $3.1 billion acquisition of DoubleClick is finally going through.

Reuters is citing “people familiar with the situation” in revealing that the typically stingy European Union will provide unconditional approval for the deal.

It’s about time, really. The buyout was announced 11 months ago. In that time, Microsoft (Nasdaq: MSFT) paid nearly twice as much for aQuantive and Yahoo! (Nasdaq: YHOO) has sealed the deal on several smaller interactive marketing outfits.

Naturally, Google is going to be watched more vigilantly, given its global dominance in online advertising, where it outsells both Microsoft and Yahoo! combined. It’s the price that Google must pay for its success.

Will this make it harder for Google to snap up other decent-sized Internet advertising specialists? Of course. If striking a deal with Google means delayed closings and the potential of regulatory derailment, Big G will have to bid a premium for future acquisitions if its rivals are holding up bidding cards.

Let’s just hope that DoubleClick is worth it. The one thing that is certain is that DoubleClick will fortify Google’s position in display advertising. Google’s stronghold has been text ads, which are easily created by anyone with keyboard-pecking skills. Companies like DoubleClick and ValueClick (Nasdaq: VCLK) have a healthy presence in graphical spots that are trickier to target given the limited inventory, but have the eye candy that is typically preferable in tough-to-monetize sites like social networking and gossip rags.

Google realizes that it needs to get up to speed in display advertising. Whether it’s through its own video-sharing workhorse, YouTube, or through social networking with its own Orkut and News Corp.’s (NYSE: NWS) MySpace, a dearth of interested click leads opens the door for impression-based brand awareness ads that pack a graphical punch.

So go ahead and eat up, Google. Savor the DoubleClick. Enjoy it too, because it may be a long time before your next substantial swallow.

By Daxim Lucas ACCORDING to industry experts, the local advertising business will continue growing this year, just slightly behind the overall uptrend for ad spending throughout the Asia-Pacific.

But nowhere is this growth more exciting — and more unpredictable — than in the realm of online advertising where the country lags far behind its regional peers in terms of total dollars spent.

According to the latest study of the Association of Accredited Advertising Agencies of the Philippines (4As), the total value of the local ad industry stood at $3.08 billion as of the last count.

Of this amount, only an estimated 0.2 percent was spent on online advertising.

This contrasts sharply with the level seen in highly developed markets like Singapore where 7 percent of ad spending went to online and outdoor advertising, with the former taking a significant slice of that pie.

But it is precisely the Philippines’ nature as a largely untapped and underdeveloped market — and its potential — for online advertising that has caught the attention of Internet giant Yahoo!.

Last week, the US-based Internet pioneer said it would open a Philippine unit which would allow it to be better position to profit from “the clear uptrend” in local online advertising as well as to help develop the market, at the same time.

“The potential we see here is tremendous,” said Yahoo! strategic consultant Cris Concepcion, who will help run the company’s local operations under general manager and IT veteran Jojo Añonuevo.

Concepcion explained that the local online advertising business, though admittedly miniscule at present, stands to grow by leaps and bounds especially as more Filipinos get their first Internet experience and go online each year.

“We are seeing local Internet penetration grow by 30 percent every year,” he said. “Already, there are over 20 percent of Filipinos online. That presents significant potential for us.”

Given the mixed fortunes Yahoo! is experiencing abroad, it is making a big bet on the Philippine “Internet ecosystem” where the company holds an estimated 85-percent market share, to a large degree due to the popularity of its Yahoo! Messenger online chat tool.

Thus, for the near- to medium-term future, its business strategy for the Philippines would be based on three big multi-year objectives: to make Yahoo! the starting point for the most consumers; become the “must buy” for the most advertisers; be a “partner of choice” by delivering industry-leading platforms for the most publishers and developers.

“[We] will add value to the Internet ecosystem in the Philippines by enabling users, advertisers, publishers and developers to create indispensable Internet experiences,” Añonuevo said.

On top of that, however, the company also wants to gain a significant portion of the advertising pie — by positioning itself as an indispensable advertising medium — and thus helping grow the pie further.

The officials explained that they want to ensure that the most effective and easiest marketing solutions are provided to advertisers in the Philippines, including the large brands and the small enterprises.

Finally, the company wants to be a “partner of choice” by delivering industry-leading platforms for most publishers and developers.

To enable developers to make most of its assets — its technology platforms and data infrastructure — Yahoo! will deliver industry-leading platforms that are open and flexible to attract the most publishers and developers, the company said in a statement.

“[Our] goal will be to create a motivated community of developers all building uniquely compelling applications that will benefit the Internet ecosystem and provide access to a vast array of highly personalized and relevant services to choose from,” it added.

Indeed, it is a big bet for a big company in a relatively small market. But local Yahoo! chief Añoneuvo has big hopes for the country.

“We believe the online business in this market has a lot of room to grow, and that it can grow to the levels of our regional peers,” he said.