Comstock stays but will GE sell NBC?

Posted by: Diane Brady on September 5, 2007

I was interested to read a piece in this morning’s New York Post about Beth Comstock heading from NBC Universal back to GE headquarters. The article quotes insiders who assert that Comstock had been marginalized during her “tumultuous two years” in the job and that executives were questioning her ability to lead NBCU’s integrated media.

GE spokesman Gary Sheffer tells me that the rumors are not true, adding that “digital will hit $1 billion in revenue in 2008, one year ahead of schedule.” That’s one sign of success, of course, but the overall unit only managed to eke out a 2% profit growth in the second quarter while areas like infrastructure and commercial finance really rocked.

The issue isn’t so much whether Comstock will head to another part of GE (at some point she almost certainly will). It’s whether GE will continue to hold on to NBCU itself. One bet is that the company will look to sell it after the Beijing Olympics next year. It’s too valuable an asset to offload before then, because of the advertising revenue and the window it gives GE to get more business in China. But the unit has long been a headache, from the choppy integration of NBC and Universal (Hollywood and Fairfield feel far apart), grumblings about rise of NBCU boss Jeff Zucker, and the disappointing performance of the core NBC network.

Comstock herself came into a challenging position at NBCU. After doing a much lauded job as chief marketing officer at GE (where she spearheaded an innovation push but left just as those efforts were starting to gain some momentum), she headed over to the digital job at NBCU. Tumultuous might well describe the atmosphere, less because of Comstock than the state of NBC. Everyone was struggling with digital. Then there was the politics. She came in as the third person to head up digital media in two years and inherited several colleagues with key digital responsibilities—not to mention the natural tendency to cast a jaundiced eye on any import from headquarters.

For all the attention to the dubious $600 million iVillage acquisition (which even GE chairman Jeff Immelt is hard-pressed to praise), it’s not fair to characterize Comstock’s tenure as a bust. NBCU has been a leader in gaining an audience for its content on the Web (and not just because of Justin Timberlake’s ‘D**k in a Box’ video). The current war with Apple over the pricing of content on iTunes could well work out in NBCU’s favor. The GE unit also just announced a content deal with Amazon.com’s Unbox.

Comstock still carries the aura of being an outsider to some folks in the industry and she has yet to pull off the kind of home-run success expected of a rising star within GE. But her overall track record is strong and she remains a favorite of Immelt. Her future looks assured. The real question is what happens to NBCU.

Reader Comments

Ron Mwangaguhunga

September 5, 2007 12:45 PM

Very fair. Almost everything I've read has painted Comstock as a failure. Everyone is struggling with digital.

SDH

September 5, 2007 1:56 PM

Comstock is getting a hard time due to the fact the she is a digital media outsider. But at the end of the day she has done better than the two people before her.

DCB

September 6, 2007 2:33 AM

CEO's demand pay cut...
HMO's request government regulation...
Corporation lobby for higher taxes...
LBO profiteers give the money back...
Saudi Arabia endorses Kyoto...
Bush & Cheney resign...
China ask US to impose steep tariffs...
Peacock Immelt to sell/spin-off NBCU?
Yea, right!

Ldyandrea

September 6, 2007 11:30 AM

Lots of this information could go a long way to explaining their attempt to extort a ridiculous price increase on iTunes for NBC Universal programming. Their revenues are down, and GE puts pressure on NBCU to boost them considerably, regardless of whether its the smart thing to do or not. If the timing of this is correct, it also sounds like Comstock's change of address happened in the wake of the break down of contract talks between NBCU and Apple. Personally, I disagree and I don't think this will turn out well at all for NBCU. Amazon Unbox is still in its infancy, doesn't serve iPod customers, and iTunes has way to huge of a customer base to ignore. NBCU does so at its peril, and I think that will become apparent when they see their abysmal sales figures for video downloads at Amazon next year.

Mark "The Hobo" Watson

September 6, 2007 9:49 PM

Don't expect GE to kiss NBC Universal
bye-bye any time soon.

Thomas

September 6, 2007 11:49 PM

That's the problem I see in today's companies. People moving around like they're baseball players. But as any businessperson knows, different sets of skills are needed depending on the job. How can anyone judge a person's performance in that short of time, good or bad? He or she would know little to nothing and depend on other people who actually have worked in the industry/market longer than, you know, two years. Sheesh. Networks or media outlets who know how to employ talent better can run circles around NBC. And they do.

Good luck to Ms. Comstock. If she keeps moving around like this she'd just build a long list of mediocre stints and little to show for them in the end. But hey what do I know?

Caleigh

September 7, 2007 12:11 AM

Great article. I know so many new media ppl who are hating their jobs/lives right now -- and I think this stems from the fact that many companies don't really have a tenable strategy. Everyone is struggling with digital.

Mark "The Hobo" Watson

September 7, 2007 6:28 AM

Should GE sell or spin off NBC? If that
worst-case scenario happen, will Peacock
Immelt become a victim of any divestment
of NBC Universal at some point? Why not?
Now what? I disagree with NBCU's unlikely performance because of box-office flops such as "And Now I Pronounce You Chuck & Larry" and the NBC
Movies of the Week "Along Came Polly" and Disney-ABC Domestic Television theatrical "National Treasure." However,
people familiar with the situation say
NBC Universal could throw in the towel;
as GE continues to focus on consumer and industrial products and consumer and commercial finance. I convince all GEers to visit http://www.ge.com and
http://www.businessweek.com for continuing coverage on the possible sale
of NBC Universal.

Tony Fotia

December 7, 2007 9:10 PM

Have sold my GE stock and will not buy GE products as long as NBC remains a left wing, Communist TV Network. When, and IF, GE is no longer connected to NBC, I'll consider buying GE again.

Post a comment

 

About

How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

BW Mall - Sponsored Links

Buy a link now!