Not to be left out of the social spotlight, AOL (NYSE: AOL) is making a few social announcements of its own. The company says that users of AOL Mail will now be able to view and send status updates on sites like Facebook, Digg, YouTube, Flickr and Twitter from within their inboxes if they add a plug-in; AOL also says that users of AIM will be able to chat with friends who are IMing within Facebook (via AP).

The announcements come a day after Google introduced a new feature that lets Gmail users post and share updates online. But while Google’s service aggregates messages a user has sent out on Twitter, YouTube, Flickr as well as some other sites, it doesn’t let Gmail users send out messages to those sites from within their inboxes. Therefore, the AOL announcement is a reminder that Google’s e-mail competitors are not sitting still and in some ways may have an advantage here.

Indeed, although it lacks Gmail’s luster, AOL Mail remains more popular than its rival, according to comScore (NSDQ: SCOR). And, via its Lifestream service, AOL had already been letting its users track and send out updates on various sites from both within AIM and the AOL home page.

As we outlined before Google’s big announcement, both Yahoo (NSDQ: YHOO) and Windows Live Hotmail already let users share status updates and track activities around the web (with some notable differences). Unsurprisingly, therefore, both of those companies took advantage of the Google (NSDQ: GOOG) news Tuesday to let everybody know that they were first.

Related

• Google Tries To Get Social With 'Buzz'

Fox and Time Warner (NYSE: TWX) narrowly averted retrans Armageddon on New Years Eve. Will Disney (NYSE: DIS) and ABC manage the same feat during the search for retransmission fees for the network and its affiliates? “We’re pretty resolute,” CEO Bob Iger told analysts during the Disney FYQ1 call, serving notice indirectly—but firmly—to distributors.

He added: “It clearly would not be our preference to see that our signal was taken down.  And we’ll do whatever we possibly can through negotiations to avoid that.  But we also believe that we have an obligation to derive value from the great investment that we make in these programs, whether they’re local in nature or whether they’re national in nature.  We have every intention of doing just that.”

Retrans isn’t the only potential area for conflict or blank screens where programming should be. Cablevision (NYSE: CVC) and Scripps just illustrated how a failure to reach licensing agreements can result in a Food Network malfunction. No major active negotiations now but Iger has the pitch ready when ESPN affiliate agreements come up, pointing to ratings payoffs from programming investments and raising a favorite claim that the network adds local ad value: “The distributors do quite well with ESPN, not just because of the overall value that we deliver, but the ads that they sell on a local basis are worth considerable amount to the individual distributors, and ESPN generates more advertising revenue than any other channel in the cable universe.”

ESPN360.com rebrands: Meanwhile, look for ESPN to continue to roll out why-we’re-worth-whatever-it-costs examples. For instance, it will rebrand broadband ESPN360 as ESPN3.com, starting with a marketing campaign in April and, according to the WSJ, live streaming of the Yankees-Red Sox opener. ESPN360.com goes to broadband subscribers through their ISPs. The reach doubled last year to 50 million households via new deals with Comcast (NSDQ: CMCSA), Cox and Charter; (NSDQ: CHTR) it’s in roughly two-thirds of U.S. broadband homes.

The rebranding, which will come with some tech enhancements and possibly some cross-device functionality, emphasizes the “network” concept. ESPN360.com offers up to 20 events at a time, live and on demand, with more than 3,500 events a year.

Related

• Disney's Iger Takes Big Swig Of iPad Kool-Aid
• News Corp, Time Warner Cable Reach Deal Without Blackouts; Scripps Still On Bubble
• Let The Flames Begin: Disney Calls Out Cable Operators On Retrans

iFollo, a site that lets members share stories about their run-ins with celebrities, has raised $1 million in a funding round from real estate investor Robert Trump, who is also a backer of game publisher ZeniMax Media. On iFollo, anybody can post an anecdote about meeting a celebrity and rate them (A sample entry from today: a member describes Blink 182 as the “biggest Jerks EVER!” because of an interview he or she did with the band once on the radio).

iFollo pitches itself as a counter to other celebrity fan sites, which it contends “provide little value, because they are primarily discussion boards and unstructured blogs, many of which have repetitive content.”

But iFollo—which launched late last year—so far doesn’t seem to have much content or a very active community. So far today, only four experiences have been posted; they’ve been viewed a cumulative 27 times. Here’s the release.

Google’s “sort of temporary detente” with the Associated Press is progressing: now new AP stories have started showing up on Google (NSDQ: GOOG) News—this one, for example, about AP itself—as first noticed by WSJ. It comes after a nearly seven week gap and continued negotiations on the licensing terms.

Google has the same statement it had last week: that is has a licensing agreement with AP, and discussions to modify/extend it are ongoing. AP says they have nothing to add to that statement. This follows AP’s new agreement with Yahoo (NSDQ: YHOO) News, as we reported last week.

Related

• AP Signs New Licensing Deal With Yahoo
• AP Reportedly Close To New Licensing Deal With Yahoo
• Google News Stops Hosting New AP Content

Baidu (NSDQ: BIDU), the Chinese search giant which stands to gain the most if Google (NSDQ: GOOG) goes ahead and pulls out of China, had a standout fourth quarter, as it completed the roll-out of its new Phoenix Nest ad system and benefited from an uptick in online ad spending.

The company had surprised analysts last quarter by issuing lower than expected guidance for the fourth quarter because of the switch to Phoenix Nest. But Baidu said that the ad system had put in a “better than anticipated performance”—driving the results, which were above the company’s guidance and analyst forecasts.

Baidu’s revenue jumped 39.8 percent to $184.7 million and its net income increased 48.2 percent to $62.7 million. Next quarter, Baidu expects revenue to come in at between $176 million and $181 million—also above analyst expectations. The company’s stock is up more than 9 percent in after-hours trading.

Bob Iger wasn’t on stage for the iPad launch last month, but the Disney CEO just gave a demo spiel Steve Jobs, the company’s largest shareholder, would applaud about a “really compelling” device that could be a game changer. Volunteering and replying to analyst questions about how Disney plans to use the new Apple (NSDQ: AAPL) tablet, Iger reeled off a series of iPad uses that are either likely or already in progress: a companion to ABC’s Lost, an ABC News app, a digital books app for Disney, an enhanced version of the popular ESPN Sports Center app, and apps for Marvel (NYSE: DIS).

Some might be adapted for iPad, some created. Iger said the iPad platform will “enable us to really start distributing product that is different than the product you typically see.” For instance, Disney was working on a version of its still-nascent Disney Digital Books for iTunes and iTouch. “Suddenly this device comes along,” offering an “even more robust platform” for possibilities like read-a-longs, simple animation, music come to life.

“We think it could be a game changer in terms of enabling us to create essentially new forms of content.  And obviously it will be a great device to play games on and to watch videos, because of the quality of the screen, but the interactivity that it will allow on a portable device with such a high-quality screen is going to enable us to really start developing product that is different than the product that you typically see on an internet-connected computer or on a television set.” Disney’s decentralized philosophy when it comes to apps—each unit handles its own—should give that creativity some room.

Even if it takes off like a Buzz Lightyear rocket, the iPad would still be a very small part of Disney’s digital revenue. Iger noted during the call that Disney exceeded “nicely” about $2 billion in digital revenues across the company in 2009. (That works out to about 5.8 percent of Disney’s $36 billion 2009 revenue.) That’s all in—commerce, games, video, everything—with theme parks alone making up about half. But, he reminded later, “We think digital media, while clearly it’s significant, it’s still evolving. I’m fond of saying it’s still the beginning of the beginning and that’s how we look at it.”

Changing game theory: Disney’s overall gaming strategy also is evolving. Instead of creating video game titles to span devices and consoles, the company has learned that some programming does best on the more common devices and is adjusting accordingly. Disney-branded games do better on the Nintendo Wii and DS, not on high-end consoles, Iger explained. The higher-end games are more expensive to make and face Disney faces more competition then when it started its original game development.

Explained Iger, “While we’re going to continue to make games for the high end, we’ll be very, very judicious in how many and which ones we choose.” The ratio will continue to run about 80 percent Disney branded. But Disney may also have some more opportunities; Iger sees recently acquired Marvel as “a brand that we think would do extremely well on the higher-end consoles.” At the same time, Disney is stepping up casual gaming. 

The groundwork has already been laid and now it’s official: RealNetworks (NSDQ: RNWK) is spinning off music service Rhapsody in the hopes of giving both companies a better chance at success. Real will reduce its interest in the Rhapsody America joint venture to below 50 percent to match Viacom’s, giving up control of Rhapsody and making room for more investors. Real will contribute some cash; MTV Networks (NYSE: VIA) will put in advertising. The new company, which will operate independently, will be known as Rhapsody.

The SEC filing comes scant weeks after the resignation of founder Rob Glaser as CEO but was well in the works before he gave up the operating role, keeping that of chairman. Acting CEO Robert Kimball described the decision to remove Rhapsody “as a significant first step in making RealNetworks a more focused and profitable company”—stressing that the digital music service is, from Real’s perspective, being given everything it needs to succeed as “the largest pure play digital music service in the market.” I’m sure he means it but in reality that may be a stretch. What would give Rhapsody the ability to succeed on its own when it hasn’t been able to thrive under so many other circumstances?

The details: As part of the transaction, RealNetworks will contribute $18 million in cash, along with the Rhapsody brand, to the new company, while MTV Networks will contribute a $33 million “advertising commitment.” MTV Networks and RealNetworks will each get two board seats; there will also be an independent director agreed upon by both firms. A spokesman tells us that the existing Rhapsody management team will stay in place. The spinoff is expected to be completed late this quarter.

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• Rob Glaser Out as RealNetworks CEO; Robert Kimball President and Acting CEO
• RealNetworks' COO John Giamatteo Quietly Resigns
• MTVN And RealNetworks Talking On Reorg of Rhapsody Music JV; Could Include Spinoff/Sale
• RealNetworks Lays Off 12 At Rhapsody; Less Focus on Desktop Client & Edit

SpinVox’s CEO Christina Domecq had to pay back £125,000 to the company after an investigation in to her use of corporate finances, according to a detailed 70-page filing made by new owner Nuance to the SEC.

The investigation was ordered by SpinVox’s board in July, when, after paidContent:UK lifted the lid the company’s financial troubles and heard such claims from staff, a dossier of complaints was handed to the board by shareholders, advisers and suppliers.

The SpinVox accounts released by Nuance are brutal; they are a sea of red ink, showing little inclination to protect the managers of the company it acquired in December. Amongst other things, they reveal the conclusion on CEO’s unaccounted expenses: “The company did not adequately capture all necessary information to administer PAYE properly and to identify expenses that were personal to the CEO.”

That meant it failed to pay UK tax properly on “benefits in kind for employees including the CEO, benefits and expenditure that could fall to be treated as personal for the CEO and incorrect application of taxation to bonuses for the CEO”. Her Majesty’s Revenue & Customs fined SpinVox, but fines could keep coming, the documents warn. The company was without a full-time CFO for 15 months while this went on—filling that gap might have helped make the accounts more transparent.

The documents concede that: “Bonuses were satisfied partly by the company meeting the cost of various personal expenses of Ms Domecq. Employment taxes withholding PAYE was not deducted on bonuses declared. The effect of these matters was to create a current account between the company and Ms Domceq.” The company even owed Domecq £72,000 at one point.

—Transfer of company funds: (1) SpinVox had paid £96,032 in 2008 to Ojala Ltd, “a company owned by a trust of which Ms Domceq is a discretionary beneficiary, in respect of its purchase and sale of shares in the company”. (2) SpinVox also paid up £38,400 in rent for a property used by Domecq, under an Ojala rental agreement, between February and January 2009.  (3) SpinVox had paid a total £153,000 for translation services to Celtic Communications, a company of which Domecq and co-founder Daniel Doulton were former directors.

As well as paying back £125,000, Domecq also agreed to “revise certain of her employment terms” after the investigation, the documents state.

—Staff’s stock-for-salary was worthless: Much of this started to go public when we reported that staff were being offered share options in place of salary while SpinVox weathered financial woes in July and August 2009; the offer was accepted by most. But those options were useless: “During the nine months ended 30 September 2009, the company granted 104,000 stock options to employees of the company. The 2009 stock option grants were valued using a Black-Scholes option valuation model and determined to have an insignificant value”.

Indeed, by the time the owners of SpinVox’s massive debts were paid off in Nuance’s acquisition, there was literally nothing left for employees.

—Company defaulted on loans: Management admitted in September that they failed to comply with loan covenants.

—Massive losses: January-to-September losses hit £56.4 million - a quarter higher than the year before.

—Nuance got a bargain: Although the acquisition price was $102.5 million, after debt repayments, Nuance only paid a “nominal consideration” for SpinVox. But it now plans to “rationalise and reduce” combined SpinVox-Nuance staff.

»  What the ad revenue generated from SI swimsuit edition means fiscally for the rest of the year. [MarketWatch]

»  EBay rolls out new search features in a new, open testing site. [Bits]

»  Was Google’s Super Bowl ad popular or not? It depends on where you ask. [AdAge]

»  ComScore’s latest digital media report shows growth in search, social media and display ads, and reduction in e-commerce spending. [MarketWatch]

»  Yahoo’s newly filed patent could mean the company is developing a “search via SMS” feature. [VentureBeat]

»  Showing no signs of leaving, Google (NSDQ: GOOG) invests in Chinese media firm with Disney (NYSE: DIS) and has yet to pull out its search operations. [ReadWriteWeb]

»  Ken Doctor’s Q&A with our founder, Rafat Ali, on how paidContent found its niche. An excerpt from new book Newsonomics.  [Nieman Journalism Lab]

O’Hara is being tasked with expanding the company’s media and interactive ventures, while continuing to grow the core sports cards, collectibles and entertainment products business. Eisner has leveraged the Topps brand across his other ventures. His Tornante company produces a web series called Back On Topps starring comedians and twins the Sklar brothers. The series has the twins running a fictionalized version of the trading card company. More at B&C.

Google (NSDQ: GOOG) is trying once again to make a social play with the introduction of a new service that makes it easy for users of its products to post and share updates online. A new tab in Gmail, called ‘Buzz,’ which will roll out over the next several days, lets users share status messages, videos, photos and links. The updates can be shared across the web (they appear on a user’s Google Profile page and are indexed by Google) or just with select contacts. A mobile version of Buzz lets users tag their locations when they post—and quickly see Buzzes sent from locations near to them.

Buzz is a direct assault on Facebook and Twitter, which have grown rapidly by making it easy for people to share information about themselves with contacts—and it’s clearly inspired by both of those services (Just two obvious examples: To send a ‘Buzz’ directly to a friend’s Gmail inbox, you use the ‘@’ function, and there’s also a list of recommended users to “follow”—both features that Twitter has pushed). And, indeed, during a question and answer period following the launch this morning, Google executives were repeatedly asked about Buzz’s similarities to those services. In response, Buzz product manager Todd Jackson said Google tries “not to pay too much attention to competitors.”

Google’s past social initiatives, including its Orkut social networking service, have had limited success (although co-founder Sergey Brin dismissed that assertion during the announcement)—but Google should obviously benefit from Buzz’s ties to Gmail, which has more than 100 million unique users worldwide. Remains to be seen, however, if people who are already so used to sharing updates on Facebook and Twitter will also want to do so on yet another service.

Related

• Following Rivals, Gmail Will Add Status Updates

Yahoo (NSDQ: YHOO) is closing yet another one of its properties down: The company is pulling Yahoo Tech, the consumer-focused tech site it launched four years ago. In a note posted on the site (via Business Insider), Yahoo says the site will close down on March 11. Visitors will instead be redirected to the Yahoo News tech section, which until now has been basically straight up tech news (almost all from the wire services). A Yahoo spokeswoman says that the blogs and product reviews on Yahoo Tech will move over to the Yahoo News tech section.

This is the latest in a long list of properties Yahoo has shut down over the last year, including GeoCities, Jumpcut and Farechase. A Yahoo spokeswoman says that the company decided no longer to maintain a standalone tech site because it is “increasing investment in some areas while scaling back in others” as part of its effort “to build products and services that deliver the best possible experiences for consumers.”

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• Yahoo Acknowledges It Might Shut Down MyBlogLog

With Facebook’s Beacon ad targeting debacle a distant memory for most, Tim Kendall, Facebook’s director of monetization, tried a soft sell on publishers and marketers at Borrell Associates’ Local Online Advertising Conference.

The social net is bent on growth—it just reached 400 million users—and Kendall’s message is that small local advertisers should follow suit. Local marketers, who generally strive for a more personal relationship to their customers, should feel an obvious affinity for Facebook. The social net’s message is that it sees advertisers and users fairly equally: they’re all part of the same ecosystem. Plus, there’s the way Facebook features like status updates and fan pages blend concepts of personal and professional marketing messages. “From the beginning, we weren’t going to do an ad product in the traditional interruptive way,” Kendall said. “We were going to make them in the same way we’ve used other features. We can create ads that are indistinguishable from content.”

Beta reseller program, where Facebook will launch a reseller program with two or three marketers. Facebook will work with them on marketing and training in how to use the program.

During the Q&A, an audience member asked about the social net’s approach to the classifieds business. Facebook is currently working with Oodle. Kendall: “Classifieds will exist on Facebook, but we won’t build it ourselves. If Oodle or others want to build a classifieds app, we’re in favor of that. But that will be the extent of our involvement.”

Taking the podium during day two of Borrell Associates’ Local Online Advertising Conference, McClatchy (NYSE: MNI) chairman and CEO Gary Pruitt described his mixed feelings of ease and discomfort standing there. On one hand, he was happy to be wearing jeans instead of the suit he usually wears for appearances before Wall St. bankers and analysts. The discomfort was due to the fact that he was a newspaperman speaking at an internet conference. He regained his contentment by channeling Darwin as he discussed the position of heading a newspaper in the digital age. “We don’t need to be the strongest to survive, we just need to be able to adapt, and that’s something we’ve proven we can do,” he said. During the course of 45-minutes, he also discussed his comfort with the ad-supported model for McClatchy, as opposed to the industry’s current interest in paywalls.

Some of the other points he touched on:

Pruitt dismissed the notion of newspapers’ irrelevance because of the expanding choices from social media sites and other digital outlets. “If you can hold on to your audience, you can be leading local media provider in your market, even with the proliferation and fragmentation of the entire media landscape.”

While he also touted the diminishing upsells from print to digital, he noted that the majority of online revenues still comes from existing newspaper advertisers. But over time, he expects that to change. “The percent of internet-only ad dollars will grow because of self-serve vehicles and classifieds. We don’t need it to be 50/50 for us to have the same cash flow. Digital has a higher profit margin because of the lower costs from not having to print and distribute it compared to print.”

As he has said last week during McClatchy’s Q4 earnings, Pruitt has little interest—at the moment—in paywalls. “I get that newspapers are very used to a subscription model.‘It works for print. Why not insist that people pay online?’ The reason is, the internet is based on a broadcast model of ad support and it’s hard to buck that system. We’re not ideological about paywalls. We’ll continue to experiment and will try paid models. We will copy the success of those who crack the code. But the current model is working for us right now.”

When pressed on his view of paywalls, he answered by citing a quote from philosopher Bertrand Russell. “When Russell was asked, ‘Would you die for your beliefs? ever the pragmatist, the philosopher answered, ‘No, I might be wrong.’ That sums my view up pretty well.”

Another area where Pruitt parts company with many major publishers is on the topic of Google (NSDQ: GOOG). Whereas News Corp (NYSE: NWS). CEO Rupert Murdoch has inveighed against Google News’ ability to subvert the WSJ’s online revenues, Pruitt is all for this “virulent competitor that’s been taking ad share from media.” He went on to say that search engines don’t take content without McClatchy’s permission. “Yahoo (NSDQ: YHOO) and Google have supplied 20 percent of McClatchy’s traffic,” Pruitt said. “We are vigilent on protecting our content.”

McClatchy’s recent profit swings have come after a very difficult period for the company, and it continues to struggle with the effects of the recession and the debt from its purchase of the Knight Ridder newspaper chain almost four years ago. While many question the wisdom of the Knight Ridder acquisition, Pruitt did give the company high marks for a number of other moves the company took years ago.

In particular, the decision to acquire geo-based domains like Miami.com and Alaska.com, which are two of its geo-portals. Pruitt: “The Miami Herald started Miami.com as an edgier guide to dinging and nightlife in South Beach. Meanwhile, Alaska.com offers tourist information. They both go further than the newspaper can go in serving that kind of general cultural information. And many others have tried. It’s not easy. After all, how many people here remember Microsoft’s Sidewalk or AOL’s Digital Cities?”

MySpace has begun rolling out 30-second audio ads, as the News Corp (NYSE: NWS). site continues its shift from a general social network to an entertainment showcase. The ads are being powered by CBS-backed TargetSpot. A rep for TargetSpot told paidContent that MySpace Music will place the audio ads alongside display ads. Specifically, the spots will be placed within MySpace’s catalogue of audio tracks. Eventually, TargetSpot hopes to attach ad support to the site’s e-commerce offerings, personal music players and user and artist playlists. But a rep said they aren’t there yet. TargetSpot promises that the ads won’t be too intrusive. The trade-off for MySpace Music listeners is that after the first listen, they will be able to listen to at least another 100 streams without hearing another commercial.

MySpace is under significant pressure to grow its revenues. During News Corp.‘s Q4 earnings call last week, CEO Rupert Murdoch didn’t touch on the MySpace unit’s revenues—which are included in the general “other” category—saying only that he was somewhat pleased by the site’s ability to stabilize traffic declines.

The TargetSpot audio ads probably won’t move the needle that much this quarter, but it certainly points MySpace in a direction that might help it make good on News Corp.‘s continued support.

A MySpace rep told us that this is just one example of several concepts the site is working on. “We’re testing some new ad products and the response from our users has been positive.  As always, we’re interested in hearing feedback from our community and the advertising community as we roll out new functionality that creates the right balance between user experience and commerce.”

Related

• News Corp. Murdoch: Content Is Not Just King, It's The Emperor; MySpace Traffic 'Stabilizes'
• Post-Imeem, MySpace Music Is Suddenly the Bad Guy…

In case you didn’t get it the first few times, yes, IAC (NSDQ: IACI) Chairman and CEO Barry Diller still believes the search market will consolidate—and no, he isn’t trying to make it happen. He told analysts on the Q4 IAC earnings call: “I don’t know what form that consolidation will take but right now (but) Ask’s not for sale. We’re not selling it in any process and I expect that will continue.”

Diller did note that the changing competitive dynamics in the search business (ie Microsoft’s big push with Bing—which continues to drive up its market share) should help Ask once its search-advertising deal with Google (NSDQ: GOOG) expires in two-and-a-half years. “We’re in a better position now competitively than when we made the Google deal in that there is definitely another player that is certainly wanting to compete in as serious a way as you can and is putting large sums behind it,” he said.

In the meantime, IAC won’t be trying to compete with its rivals on the airwaves. Diller said that the company would not be doing any offline marketing for the search engine in the future in “any material way.”

As for the $1 billion loss—as in the amount of value IAC just wrote down on Ask.com and its other search business—it’s too big a number to ignore but no one at IAC is dwelling on it. Diller would rather focus attention on the $200 million or so in cash flow IAC generated in 2009 or the $100 million in smallish investments or the 25 percent stock buyback since the 2008 spin.

Why the write down? CFO Tom McInerney laid it out as a simple accounting fact of life. Every year in the fourth quarter, IAC has to gauge value and perform certain accounting tests. Long-term growth expectations for search came in lower and the need for an impairment charge kicked in.

Some other, non Ask.com, highlights:

—Mergers and acquisitions: Diller said the company still didn’t see “an acquisition of size out there.” He said there was “too much froth” in the valuations that VC firms are putting on their investments and doesn’t expect that to change. One business that IAC has talked about being interested in is Yahoo (NSDQ: YHOO) Personals—but Diller wouldn’t provide any updates on that.

—Stock price: Asked which of the company’s myriad properties would be the biggest positive surprise over the next few years, Diller lamented that the company was “so generally under-appreciated,” adding that its businesses are “selling for very little.” When another analyst followed up by asking what would change that, Diller said the company needed to deal with the $1.7 billion in cash it has on its books. A sign of things to come? The company doubled its stock buybacks during the quarter, compared to the prior quarter.

Related

• IAC Writes Down Search Business; Takes $1 Billion Loss For Q4

Penton, the trade publisher, has filed for Chapter 11 bankruptcy protection. The pre-packaged reorg, agreed by its lenders, will help it erase debt by $270 million. In addition, some existing shareholders will make a “significant new investment” in the company, which will provide additional working capital to fund operations and improve Penton’s overall liquidity. The agreement also provides for an extension of the maturity on the company’s senior secured credit facility through 2014. The company expects that it will finalize the capital restructuring and emerge from Ch 11 within 30 to 45 days.

Penton, based in NYC, is owned by PE firms MidOcean Partners and U.S. Equity Partners II, an investment fund sponsored by Wasserstein & Co. Penton said no change in ownership will happen as a result of this reorg, and there will be no disruption of its print, digital and event properties. Release after the jump. More details on the Ch 11 here.

—————————-
Penton Media Reaches Comprehensive Debt Restructuring Agreement with Its Lenders
Owners to Make New Investment and Maintain Control

Company’s Operations Will Continue Without Interruption, and Publication, Digital, and Trade Show Schedules Will Be Unaffected

NEW YORK—(BUSINESS WIRE)—Penton Media (“Penton” or “the Company”), a leading business-to-business media company, announced today that it has reached an agreement with its lenders on the terms of a restructuring that will reduce the Company’s debt and strengthen its balance sheet. Once finalized, the restructuring will result in the elimination of $270 million of the Company’s debt. In addition, certain of Penton’s existing shareholders have agreed to make a significant new investment in the Company, which will provide additional working capital to fund operations and improve Penton’s overall liquidity. The restructuring agreement also provides for an extension of the maturity on the Company’s senior secured credit facility through 2014.

“This capital restructuring is a positive, strategic step for Penton that is in the best interests of the Company and our employees, customers, and suppliers,” said Sharon Rowlands, Chief Executive Officer of Penton. “This restructuring will allow us to achieve a debt level that is more sustainable in the current economic environment. With a strengthened capital structure, we will be better positioned to fully leverage our operations, which have been and continue to be profitable. We have many opportunities to grow our business and increase our profitability which we are excited to execute on.”

“We are pleased to have reached agreement with our lenders and thank them for their support,” said Anup Bagaria and Tyler Zachem, Co-Chairmen of Penton. “Penton will emerge as a stronger company as a result of this transaction, and we believe that the Company is well-positioned for future success due to its market leading franchises and outstanding management team.”

The parties intend to implement the capital restructuring through a “pre-packaged” Chapter 11 plan of reorganization (the “Plan”), which has already been approved by lenders and is expected to be filed with the Court in the next few days. The Company expects that it will finalize the capital restructuring and emerge from Chapter 11 within 30 to 45 days.

BUSINESS AS USUAL

Penton intends to operate with business as usual throughout the restructuring and has solid cash flow and sufficient liquidity to meet its obligations. The Company will continue to offer the industry-leading products and services that its customers rely on and will do so on a normal schedule and with the same superior quality. The Company’s trusted print publications, events, and digital products will continue to provide customers with the information needed to compete and the connections needed to succeed.

Further, there will be no management changes or change in control of the Company.

“Operationally, nothing will change during this debt restructuring,” Ms. Rowlands said. “We remain committed to serving our customers and readers by providing them with the same high quality products and services we always have. In addition, we have taken steps to make sure our employees and independent contractors are unaffected by the Chapter 11 process. Employees will continue to be paid and receive their benefits without interruption.”

“We are taking this action voluntarily because we are committed to achieving our long-term vision for the Company,” said Ms. Rowlands.

The Company’s suppliers will be paid in the ordinary course for all post-petition goods and services provided to Penton. Further, the Plan provides for full payment of all pre-petition trade claims, so there should be no impact on Penton’s suppliers.

“I am extremely proud of the way our entire organization has responded to the challenging circumstances in the economy and in our industry, and this further contributes to my confidence that Penton has a very bright future,” Ms. Rowlands added. “I would like to thank our employees for their hard work and dedication, which is critical to our success. I would also like to thank our customers and suppliers for their continued loyalty and support. The entire senior management team, our owners – MidOcean Partners and Wasserstein & Co., LP – and our Board of Directors are committed to continuing to build on Penton’s strong foundation and valued brands to drive long-term growth and success.”

Rothschild Inc. is acting as financial advisor for the Company, and Jones Day is the Company’s legal counsel in connection with the capital restructuring. For more information about the restructuring, please visit: http://www.penton.com/restructuring.

About Penton Media, Inc.

As a leading, independent, business-to-business media company, Penton knows business and how to create and disseminate the vital content that moves markets. Penton serves the information needs of more than six million business professionals every month in industries ranging from Agriculture and Aviation to Electronics, Natural Products, and Information Technology. With the majority of the company’s properties ranked the #1 or #2 information source for their respective industries, Penton is where professionals turn to gain the critical insight, expert analysis, and relevant connections needed to compete and succeed. Headquartered in New York City, the privately held company is owned by MidOcean Partners and U.S. Equity Partners II, an investment fund sponsored by Wasserstein & Co., LP, and its co-investors. For additional information on the company and its businesses, visit http://www.penton.com.

Morningstar has done an unusual and small acquisition: it has bought financial blog Footnoted.org, for an undisclosed sum. The site, founded in 2003 by financial journalist Michelle Leder, pours over SEC filings and digs out various inside stories about companies. Besides the blog, it also has a premium service FootnotedPro which provides a deeper service for a fee.

Leder will continue to run Footnoted, and Morningstar will make some content from the site available on Morningstar.com, the company’s investment website. Also, the site will move from footnoted.org to footnoted.com. Additionally, Morningstar will also offer Footnoted Pro to its individual investor, advisor, and institutional clients. More details in release.

The deal is likely less cash and more based on future performance, as Leder hints in her own blog post about the deal:

“While I negotiated mightily for the keys to the Gulfstream, the corporate apartment in Paris, the company yacht, the lifetime consulting contract and, of course, a tax gross up — all crazy perks we’ve written about in various M&A deals — I came up empty handed. That’s because Morningstar doesn’t believe in those sorts of things. Nor do I. Instead, my reward will come if I’m able to grow the footnoted business the way that I envision, which is exactly as it should be and just another reason why I’m so excited to be joining Morningstar.”

Warner Music Group (NYSE: WMG) CEO Edgar Bronfman Jr. couldn’t have made it more clear - the music industry wants to ween itself off its Apple (NSDQ: AAPL) dependency, and it will get do just that when iTunes comes under massive competition pressure from new unlimited and mobile services…

“Digital growth has slowed following iTunes’ introduction of a variable pricing model in April 2009,” he told analysts on WMG’s Q1 earnings call. “It couldn’t have come at a worse time,” Bronfman said. “(It was) agreed in summer of 2008 before the financial crisis even hit - Apple went through that price increase in April, but in the face of the worse recession since the Depression.”

The CEO acknowledged that it was the labels which called for the new multi-tier pricing structure, which has nevertheless been a “net positive”, and: “It’s difficult to know, even today, if it is just consumer resistance to a higher price points or if taking a pricepoint of 30 percent more at such a fragile time (is to blame). I don’t think there’s been another company to have taken such a price increase in the 2009 period.”

One thing’s for sure - Bronfman’s tiring of an Apple that both remains critical for the labels and which is nevertheless branching out from music alone. “We’re seeing tremendous interest in Apple products,” he said. “But there’s more competition in the Apple ecosystem now, with apps, video content and other things on which the gift card money can be spent. What we’ll see is the very significant growth of access models… These models will be one of the long-term drivers of digital revenue.” He also spoke fondly of mobile.

“The subscription models that we are promoting will create much more value over time than the per-play or per-purchase models,” he said. “The number of potential subscribers dwarves the number of people purchasing music on iTunes.

“There are a lot of people who see the extraordinary value that Apple has created ... you’re going to see a lot of people try to emulate that value.” There’s no shortage of services vying to provide users with unlimited monthly music - Rhapsody’s already doing it, Spotify is making waves in Europe, Mog.com launched such a feature in December and Rdio is due for beta launch.

“If you watch this space, you’re going to see accelerated competition for ... consumers,” Bronfman said, seemingly pleased to welcome channels other than just iTunes. “There are going to be quite a lot of players engaged in trying to win those hearts and minds. One of the tools or weapons they’re going to be using is content - music will be an important part of that play.”

Bronfman appears to recognize the popularity of music consumption, if not sales, and is clearly seeking relationships with unlimited-subscription providers, whether music services or ISPs, which would give the labels dependable income, as opposed to per-track purchases, from services like iTunes, that can twist in the wind.

It’s here that he jumped on to Rupert Murdoch’s bandwagon. “The comments that Rupert Murdoch has made, around the role of content and the necessity for content to be fairly recompensed as new business models emerge, are well thought out and reasonable, looking forward,” Bronfman said.

And this line, lifted almost wholesale from Murdoch’s own earnings call last month “Content is going to have more pricing flexibility over time - the only thing that drives iPods, Kindles, Zunes and other devices is content - the power of content in (MacMillan’s) little fracas with Amazon (NSDQ: AMZN) was clearly evident. You’ll see an increase in pricing flexibility for content companies.”

In that vein, another grumble about Apple: “Book publisher pricing on iPad gives much more flexibility than the music industry has on any Apple devices.”

Despite Bronfman’s eagerness for unlimited-access competitors to iTunes, free streamers shouldn’t expect to win the same favour. “Free streaming services are not a positive thing for the industry and, as far as Warner Music Group goes, will not be licensed. It is not the kind of approach that we will be supporting in the future.”

That kills dead any prospect Anglo-Swedish service du jour Spotify might have had for launching its ad-supported service in the U.S. - but we already knew such label preferences were likely to mean Spotify could only bring its subscription offering to the Stateside market; it’s currently seeking carrier partners with whom to do just that.

IAC (NSDQ: IACI) bit an accounting bullet in Q4, taking a $991 million impairment charge for its search & media business—including Ask and excluding Citysearch. Without that after-tax charge and an unrelated write down for $12.2 million, IAC would have turned in earnings per share of $.20, an 88 percent drop from the same quarter last year but still beating estimates.(Q408 net last year was affected by a one-time pre-tax gain.) With those, IAC lost just over $1 billion, or $7.94 per share. Not to worry, it still has that $1.7 billion of cash waiting for just the right occasion.

Those are the eye-popping numbers—and we’ll have more about the reasons when Chairman and CEO Barry Diller meets with analysts later this morning. But that’s not the whole story for Q4. Revenue was up five percent to $367 million, while operating income before amortization rose 47 percent to $41.4 million on cost savings for the sales or shutdowns of businesses and better results from the Search and Match segments.

Earnings release | Webcast

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