Viacom's Caught the Ad Network Bug

MTV Networks (VIA) is about to launch a patents-centric ad network. That’s not a bad idea at all. In fact, MTV can leverage its relationship with advertisers and target sites outside of MTV Networks’ portfolio to generate a lot of value.

That’s the theory. In practice, ask yourself if a competing media company like NBC Universal (GE), CBS (CBS), News Corp. (NWS) or Walt Disney (DIS) would really welcome MTV owning the relationship with advertisers and users on its sites.

Al Qaeda has a higher likelihood of celebrating American Presidents' Day than that scenario people. Let me say one thing: media companies probably hate Google (GOOG) and YouTube et al., but they also hate one another. They won’t say that, so I will say it for them. The “bad blood” between GooTube and Old Media is, what, 5 years old?

• John Malone and Barry Diller have hated one another for years.

• John Malone and Rupert Murdoch? Ditto.

• Rupert Murdoch and Sumner Redstone? Ditto.

The point is, on the personal front, there are a lot of obstacles for these “networks” to succeed, but the biggest one is business:

Ad networks succeeded because they were independent upstarts that posed no threat. Last year that all changed when Right Media sold for $750M, Blue Lithium for $300M and so on.

Since those deals, every one is getting into the ad network business:

• Last week Comcast (CMCSA) and a consortium of 3 newspapers got in on the fun.

• Last year, News Corp. said that they would too.

I know what you are thinking: Ash, these media-company-driven-ad-networks don’t really expect to get any real estate on other media companies’ websites, they are going after the long tail.

Bullshit. The long tail won’t make any impact on the finances. Companies like SpecificMedia, for example, blew up exponentially because they managed to get real estate on sites like ESPN, not HangoutForLocalSportsFans.com.

I suspect this is the latest strategy du jour infesting media companies, a month or two ago, they were launching their own UGC sites (how did Spike and iFilm fare?); in a month or two, this too shall pass.