Shortish version:

• Aereo, which distributes broadcast TV programming over the Web but doesn’t pay the broadcasters to do so, has won a couple of important legal victories in federal court.
• Now the IAC-backed company plans on expanding to 22 cities outside of the New York area, starting with Boston this month.
• CBS, one of the broadcasters that is suing Aereo, has said it will oppose Aereo every time it opens in a new market, with a new suit. Last month, CBS spokesman Dana McClintock warned of new lawsuits via Twitter (at least twice), and CBS CEO Les Moonves said the same thing during an earnings call last week.
• Aereo, which cites both men in its complaint, is essentially asking the same court that granted it its first legal victory — New York’s Southern District — to preemptively rule against CBS in any of the cities it has announced plans to enter this year.

And here’s the comment from CBS:

These public relations and legal maneuvers do not change the fundamentally illegal nature of Aereo’s supposed business. The issue of unauthorized streaming of copyrighted television programming is now being contested in the 2nd Circuit and the 9th Circuit, and wherever Aereo attempts to operate there will be vigorous challenges to its Illegal business model.

Still here? You must really want to read this thing! Here you go:

Aereo Complaint for Declaratory Judgment – FINAL FILED

The idea that we have to pay them to put their music on our radio stations is absurd …

– CBS CEO Les Moonves

Yesterday’s earnings call was no exception. Here’s the full exchange between the CBS CEO and analyst Anthony DiClemente, via Seeking Alpha.

Anthony J. DiClemente — Barclays Capital, Research Division

Okay. And then one for Les. You — I’m sure — you may have seen that Apple TV added Hulu onto its platform this week. I’m just wondering, when you think about Apple, are you in any way philosophically opposed to offering CBS on the Apple TV platform? And I know I — just from prior experience, I’m sure your answer will have something to do with getting paid for your content. But more specifically, is there anything you need to see or specifically anything you need to get in order to be convinced that that’s a smart strategy for CBS?

Leslie Moonves

Look, Anthony, you’ve — we’ve had this discussion many times before. You’re right, it depends what the terms are, it depends what we get paid for. It depends on what effect Apple TV would have on either our advertising, our syndication or our retrans, which are our three main buckets of revenue for our content. So if it fits in well, like Netflix did and Amazon did, we’re happy to discuss it. If it doesn’t and we’re — they’re using our content to build a business, we’re not quite as favorable to that. So the devil is in the details. I know it sounds like a pat answer, but it’s really true.

Even in the transcript, it’s funny to watch Moonves and DiClemente go through the motions on this one. But I’m highlighting it here because it illustrates that digital video no longer seems like a conundrum to CBS and all the other big TV programmers. It seems pretty routine.

There are two main options:

Sell the old stuff: Once CBS and the other networks have aired their shows on their own networks, they’re generally happy to resell them, at nearly 100 percent profit. Recent programming goes to a la carte “electronic sell-through” stores, like iTunes; older stuff will show up on subscription services. For instance, now that CBS has stopped showing “CSI: Miami” after a 10-year run, that show is likely to end up on Netflix, Moonves said yesterday.

Sell the new stuff: If you want to run the current shows that CBS and others offer — the way the pay-TV providers do — then you have to act like a pay-TV provider, too. That means buying all of their program bundles, at market rates. Which is what Google is doing with its new Google Fiber TV service. And it’s the same proposition that Intel and other would-be “over the top” services are considering now.

It’s possible that Apple tries some brand-new option that the programmers haven’t seen before, like it did three years ago, when it was pitching a $30-a-month package for stuff that had just aired. And the new “channel-as-app” model that’s emerging on Apple’s devices and others offers some room for experimentation.

But the new semi-conventional wisdom — embraced by folks like Time Warner’s Jeff Bewkes — is that if Apple wants to get deeper into TV, it will work with the TV guys on the terms they already know.

But as those services start to dabble in creating their own shows, big media companies could get another bump, by helping the new guys make new content.

CBS, for instance, makes about 20 shows at its own production facilities, primarily for itself. But the broadcaster may end up producing something for Netflix, CEO Les Moonves said today during the company’s earnings call.

Moonves didn’t offer any other details on the discussions, and said he wouldn’t until there was a signed deal. Netflix offered up even less information: “Anyone and everyone who produces content is looking to do deals with Netflix,” Netflix spokesman Steve Swasey said via email.

Last week, Netflix launched “Lillyhammer,” its first original series, and later this year it will debut “House of Cards,” a David Fincher/Kevin Spacey series. Twentieth Century Fox — which like this site is owned by News Corp. —  is also producing a new run of “Arrested Development” for Netflix.

The company has also reportedly reached a deal with Lionsgate to produce “Orange Is the New Black,” a new series from the creator of Showtime’s “Weeds.”

Meanwhile, Moonves says CBS continues to talk to other players who are in the market for the stuff he’s already made. Verizon and Redbox have already announced plans to launch a new subscription video service, and while Moonves wouldn’t name names — Google? Apple? — he didn’t dissuade analysts from anticipating more buyers for his stuff.

“There are a lot of conversations,” he said this afternoon. “It’s hard to predict whether they’ll be a major deal. But we’re talking to an awful lot of people.”

The video rental company has a new licensing deal for shows from the teen-centric CW network, which is jointly owned by CBS and Time Warner’s Warner Bros. studio.

This one has been in the works for quite some time, despite the fact that Time Warner CEO Jeff Bewkes had made a point of belittling Netflix as “the Albanian Army” last year. But last spring, as the two companies continued to talk about distribution deals, Bewkes softened his rhetoric and explained that he would be quite happy to sell his reruns to the service.

Like other Netflix deals, this will be for reruns that are at least one season old — the company has stayed away from licensing “in-season” content. But if you want to watch last year’s “Gossip Girl” or “Vampire Diaries,” you’ll be able to stream those starting this Friday.

And like other recent Netflix deals, this is an “output” deal, which means Netflix gets the right to run shows that haven’t aired yet; the company has locked in everything the network will air through the 2014-2015 season. Netflix executives are increasingly pointing to this part of their content deals as a differentiator between their service and Amazon, which has been licensing much older shows for its streaming content deals.

The deal isn’t exclusive, though. Warner Bros. and CBS can still sell the shows via traditional distributors and other digital providers, with some restrictions.

Reminder: Netflix, which has lost about 60 percent of its market cap since this summer, reports Q3 earnings Oct. 24.

But don’t expect to use Netflix to watch shows that aired last night, or even in the last few weeks or months. In most cases, Netflix is adding shows that are a year old or more.

And in the case of the handful of shows that Netflix does run in the same season they appear on TV, it is increasing the “window” between their air date and the time they show up on the company’s streaming service.

Netflix previously had the ability to stream some Disney Channel shows, like “Wizards of Waverly Place,” the day after they aired. But now it will wait 15 days to run them, says Netflix content boss Ted Sarandos. The flip side: Netflix will get access to other Disney/ABC-owned shows that it hasn’t had in the past, like “Scrubs,” and in some cases it will get a deeper catalog, like more episodes of “Lost.”

Which makes this deal similar to other deals Netflix has cut in the past year with movie studios like Sony and Time Warner’s Warner Bros. for their offerings: Netflix writes a big check and agrees to wait longer to distribute some content, in exchange for the rights to more content, overall.

So what if you want to watch TV shows that ran last night? There are plenty of other places to get that, like Hulu, Apple’s iTunes or video-on-demand offerings from cable providers.

“Day-after broadcast is not core to our strategy. We’re not in that business, particularly,” Sarandos says. “I highly value completeness over freshness. For our customers, it’s much more about being able to watch the entire run of a show, as it is about being able to see time-shifted episodes.”

Translation: Hey Hollywood and TV executives! Don’t believe what you hear and read–we don’t want to blow up your existing distribution models. We just want to write you big checks for stuff after you’re done with it.

Earlier this fall, Netflix announced a similar deal with GE’s NBC, and Sarandos says he thinks his agreement with News Corp.’s Fox is fairly robust (News Corp. also owns this Web site).

Which means we should expect to see something from CBS down the pipe, too, right? “We’re constantly in talks” with other content owners, Sarandos says.

Translation: Hey Les Moonves! We’re no Google. How much do you want for “The Mentalist”?

This Sunday, the CBS television news magazine “60 Minutes” returns to Facebook after several years to check in on co-founder and CEO Mark Zuckerberg.

In the first interview by correspondent Lesley Stahl in early 2008, Zuckerberg’s social networking empire was much smaller, beset by a series of management snafus and mired in yet another privacy controversy.

Plus, he was more than a lot more awkward. His “was-that-a-question?” response to an obvious question by Stahl was a near classic in geek communications.

Fast-forward to today: Zuckerberg rules an incredibly powerful tech company worth gazillions more (good), has developed into a very polished leader (good) and even had a big Hollywood movie called “The Social Network” made about him (not so good).

Presumably, Stahl will cover all that in her new chat with him, which includes a visit to Facebook’s new Palo Alto, Calif. HQ.

Stahl also interviewed me again and pistol-whipped me–okay, she just asked–until I took back my snarkiest remark from the first one, in which I called Zuckerberg a “toddler CEO.”

My new take, now sporting smart-lady glasses and much grayer hair: The toddler has turned out to be a prodigy!

In other words, the worm has officially turned.

Stahl also wanted to know about the rivalry with Google, the fallout of the movie, my epic de-hoodie-ing of Zuckerberg at D8 conference and what-up with the Winklevii (whom, I believe, I called “hambones.”)

Here is a small taste of the new piece, which airs at 7 pm this Sunday, followed by the entire one from 2008 and the blog post I did about it:

For those who missed it, here is the entire video of the piece CBS’ “60 Minutes” aired on Facebook last night, helmed by veteran correspondent Lesley Stahl.

It is not exactly the big wet kiss I was expecting the hot social networking company would get, but it was also definitely not an ouch-that-hurts piece that could have been done.

For those who don’t know the tale, it hits all the high (and low) points of the Facebook saga, with a button-pushing efficiency that television does so well. Thus, a synopsis:

Web Wunderkind Mark Zuckerberg, who seems genetically unable to smile (unlike, say, his deeply charming sister). Harvard. Ratty hoodies and flip-flops. Mark makes a Facebook profile for Lesley (how much do we love that she blocked her boss Les Moonves?).

Next stop: Silicon Valley! Dropping out and venture funding. Toddler CEO (that one was coined by BoomTown). Crazy HQ with kooky-looking employees, one of whom you know was forced to ride a unicycle through the office by Lesley.

Big growth. Is Mark Google’s Larry and Sergey rolled into one? Inexplicably, ZERO mention of its bigger rival, MySpace, even once. Worth $15 billion?–an insane number Lesley does not question nearly enough.

Oops, Privacy! Oops, Beacon! BoomTown tsks-tsks that stalkerish advertising idiocy and is asked about Mark’s qualifications as CEO (although no one cares what BoomTown thinks). Mark retorts: Hey, we need to make money. Lesley, so give the Wunderkind a break!

It’s a smackdown of chit-chatting ladies, as CBS’s “The Talk” debuted this week, in an attempt to grab audience from the powerhouse daytime ABC talk show “The View.”

It’ll be hard, since those are some tough women on “The View,” which recently was in the spotlight after Whoopi Goldberg and Joy Behar walked off the set in the middle of a segment with Fox News cable pundit Bill O’Reilly, after he impugned Muslims.

Here is a clip from “The View,” in which O’Reilly comic clone Stephen Colbert pretends to walk off the stage.

It’s followed by an opener for “The Talk”–the best part comes at the end, when Julie Chen’s husband, CBS CEO Les Moonves, offers his support in a welcome video, but also threatens to cancel the show if ratings are not good.

Enjoy:

But the deal could also give Les Moonves and company the ability to strike less conventional distribution deals, too. Now that Comcast is out of the way, CBS could move forward with a Hulu deal, and perhaps the likes of an Apple TV product as well.

Make no mistake: The real focus of today’s deal is the money Comcast will fork over for the right to distribute CBS’ broadcast programming to its cable subscribers’ TV sets. Comcast and other cable guys have resisted paying the so-called retransmission fee for TV that’s available free over the airwaves. But one by one, they’re conceding and paying up, which means their customers will, too.

Barclays analyst Anthony DiClemente guesses Comcast’s CBS fee will start at 50 cents a month per subscriber and move well past $1 by the end of the deal, though I’ve heard grunts and murmurs from Black Rock that those numbers are low. Perhaps we’ll hear more during tomorrow’s earnings call.

And while the release announcing the deal notes that Comcast (CMCSA) gets online rights as part of the pact, the near-term impact for Web viewers will be very limited.

Specifically, if you’re a Comcast cable subscriber who pays for Showtime and/or The Movie Channel, you’ll soon be able to watch programming from those channels online, too. Good news for “Weeds” and “Dexter” fans, but that’s about it.

That said, down the road, CBS may start moving to a model where it pulls more of its broadcast TV shows like “CSI” off of the free Web and makes them available only to “authenticated” customers–Comcast subscribers and anyone else whose pipe provider has a deal with the broadcaster.

And that, in turn, gives the network the go-ahead to move forward with Hulu, Apple and every other player who also wants to sell online access to TV programming.

CBS had previously chatted with other outlets like Apple and Hulu–in part because it was interested, and in part because it was good for Comcast to know that it was interested. But now it has a framework for those deals: Comcast is paying us this much money for this much access to our shows. You’ll need to pay that amount or more.

So it shouldn’t be a surprise to see Moonves acknowledge his interest today in joining Hulu’s paid subscription service, which would mean patching things up with former online rivals News Corp.’s (NWS) Fox, Disney’s (DIS) ABC and GE’s (GE) NBC.

And I wouldn’t be shocked to see him murmur positive things about supplying online programming to Apple (AAPL), or Google (GOOG) for that matter, during tomorrow’s call. Stay tuned.

“There are certain shows that will be sold on Apple for 99 cents,” Moonves said today, adding, however, that details have not been worked out.

It’s possible that Moonves doesn’t plan to make any significant concessions on pricing–CBS, like other networks, already offers some older shows, or new shows it wants to promote, at discount prices. But the context of Moonves’s comments, which came during the company’s earnings call today, indicated that he is planning on changing his pricing structure on more than a one-off basis.

UPDATE: That metaphorical throat-clearing you might be hearing right now is the sound of people who are familiar with Moonves’s thinking. Said people are telling me that while CBS is open to talks with Apple, etc., the company has no imminent plans to change pricing and that Moonves didn’t really mean to imply that anything is afoot. But since said people won’t go on the record, we have to go with what Moonves actually said.

Any kind of price cut would represent a partial victory for Jobs and Apple (AAPL) content boss Eddy Cue, who have been trying to convince the networks to lower their prices. The Financial Times first reported on those efforts last month.

Video sales haven’t been robust at iTunes and aren’t a significant revenue source for the networks. But since the networks are still worried about cannibalizing existing revenue sources like syndication fees and DVD sales, they’ve been reluctant to chop prices further.

GE’s (GE) NBC Universal ended up yanking its shows off of iTunes in 2008 because it wanted the ability to raise prices, and it got at least some of what it wanted: Since that imbroglio, networks have been able to sell their HD shows for $2.99 a piece.

The short version is that unlike its broadcast peers, CBS (CBS) has been reluctant to make many of its shows available on the Web because it worries that doing so cuts into its core TV business.

So while GE’s (GE) NBC Universal and News Corp.’s (NWS) Fox put Hulu together, CBS stayed away. And when Disney (DIS) decided to join the joint venture earlier this year, CBS executives argued strenuously against the deal. Instead, CBS has been content to use the Web as a promotional tool for TV via outlets like Google’s (GOOG) YouTube.

The longer version is below, via the transcript of a brief chat I had with Smith this afternoon to discuss his plans and the network’s. This is stuff he’s talked about before–to reporters, in industry forums, and even via emails he wishes he hadn’t written–but I’m running it at length here.

Because 1) I think Smith does a good job of explaining the push-and-pull of Web viewership vs. Web economics that everyone in big media is grappling with, and 2) I want people to see just how difficult it is to keep up when Smith talks. He can get out a lot of words in a relatively short time.

I also had a quick chat with CBS CEO Les Moonves, who made many of the points Smith did, but with less verbiage: I’ll get you that transcript shortly, too.

Peter Kafka: Since you’re going to be advising CBS’s Web video strategy, why don’t you lay out, for the record, where things stand?

Quincy Smith:

We recognize that the Web is two things. It’s both a new medium…and there my example has always been, look at fantasy football: When you’re nice enough to watch the Jets just pound the snot out of the Raiders on Sunday, on a CBS channel…on fantasy football on CBSSports.com, you start on the Tuesday before and end the Wednesday after.

And what are you doing? You’re personalizing it, you’re becoming more of a fan of the game [Smith goes on to praise CBSSports.com's feature set]. All of those things are additive, so when Sunday comes in, you’re actually more of a fan, and you’ve even more convinced you’re going to watch that broadcast show.

Now, I realize that sports is reasonably bulletproof, and a good case study to begin with versus some of the other programming, but the fact is, the Web is a new medium. So what do I also mean? Tech reviews on CNET, Money Watch being watched on BNET. GameSpot videogame reviews.

Access to content that CBS didn’t already have, that are additive–both in their own right online, with the margins that the CNET business is used to, and where we’re getting just stronger and stronger from a margin perspective–and potential content that can also be applied to our [local TV stations owned by CBS], our affiliates, our broadcast news, as well as the radio. So that’s the side of our business that is $600 million revenue and $50 million-plus profit on the bottom line.

The other side of the Web, the side that is most thought of by many journalists, is the threat of an IP-deliverer of video. And how you turn that threat into an opportunity.

And so, from that perspective, as  you know, we didn’t go ahead and say, “Okay, we’re going to lock down and stream, with all of our other peers in broadcast, and come up with the same rules, and embed and right-click this and go away.” I’ve never had a beef with Hulu. Hulu’s always worked as a great service. That’s part of the problem.

As a network, we need to make sure that our content is being seen where the dollars matter. And right now that’s on air. Opportunities like TV Everywhere–we’re not putting all of our eggs in that basket, though we are big advocates of it–are ones where you can actually take and expand and extend the television market online, so it doesn’t matter what screen you watch “CSI” on; what matters is that you watched it, it counts and you saw the ads.

But until that happens, it’s crazy to just stream the shows for zero economics. When in fact you can make a lot more money doing things that are additive and complementary to the rest of the CBS line. That’s where CBS interactive comes in now.

Kafka: But TV viewers are showing an increasing interest in watching their programs on the Web, whether from legal services like the Web or illegal torrents and pirate sites. Don’t you need to reach them where they are?

Smith:

Now, if you really look at those numbers, what they’ll say is [online and offline video are] both growing, right? We’re having the best year ever as America’s largest broadcast network, and I think that 99.9 percent of that–this is the quote I’ve never been able to get in there–is that’s [because] of the great content that we have. There’s some infinitesimal basis point that’s relevant [to CBS ratings because] we are making sure that when people watch it, they’re more inclined to watch it on television. For now.

Once that solution moves, once those economics move–whether that’s more ads, [higher] CPMs, more ad buyers….You and I can say all day long, “We’re sold out on Web video. That’s going really well. It’s sold out.” Well, no kidding, it’s sold out. It’s a $700 million market. The television market is $120 billion. And of that, $700 million, half of those [ad buyers] are spending  90 percent of their time doing Google keywords, not buying online video.

The key is, how do you turn television buyers into video buyers? And that’s where a solution like TV Everywhere comes into play.

And by the way, looking at [Hulu CEO Jason] Kilar’s comments the other day, in Colorado [at an industry convention], he sees that too. He’s more sophisticated on this stuff than most anybody. From the perspective of, he understands that’s where the big dollars are. And so he probably went at it as, “I’m going to aggregate all the people first, so hopefully things like TV everywhere come to us.” From our perspective at CBS, we’ve got to go to them.

I don’t hate Hulu. Hulu’s world-class video viewing. What I don’t understand is, why license all that content to something that works that well, that seamlessly, yet–without the economic model around it?

Smith is still running the CBS Interactive unit, a job he took in November 2006. But he has been telling associates recently that he plans to start his own company, possibly as soon as this summer.

Other people close to Smith say that his departure isn’t imminent and doesn’t have a fixed date and that he’s still working closely with CBS CEO Les Moonves. Here’s a statement from CBS spokesman Dana McClintock: “We decline to comment on rumor and speculation.”

If Smith does leave CBS (CBS) to put out his own shingle as a dealmaker, the move would make sense because that’s what he did prior to joining Moonves and co. His last job was at media banking heavyweight Allen & Co., where he put together a slew of Silicon Valley tie-ups, including Google’s (GOOG) $1.6 billion pickup of YouTube in 2006.

People close to Smith says he often talks of trying to emulate Dan Case, the late brother of AOL founder Steve Case and the former CEO of Hambrecht & Quist, the dominant Silicon Valley investment bank during the first Web boom.

Smith’s departure also make sense for another reason: CBS no longer needs a deal guy to run its digital operations. Like just about every other big media company, it is still trying to digest the deals it made during the last boom–most notably, online music service Last.fm, which it bought for $280 million in 2007, and CNET, which it bought for $1.8 billion last year.

In addition to M&A, Smith has also been overseeing the network’s online video strategy, which is different from its broadcast competitors: While GE’s (GE) NBC, News Corp.’s (NWS) Fox and now, Disney’s (DIS) ABC have all come together to offer their programming exclusively through the Hulu joint venture, CBS passed on a Hulu deal and has cut its own pacts with a variety of Web distributors.

Smith, backed by Moonves, has argued that CBS is better off selling ads for its online inventory instead of ceding it to the likes of Hulu. And with some notable exceptions–like the March Madness college basketball tournament–the network has been more reluctant than its peers to put much of its premier programming online. It’s still too early to tell which strategy will work best for the broadcasters, and it may take years to get a real answer.

Incredibly, this is the seventh year of the D: All Things Digital conference.

We feel very lucky to get here, especially in the midst of what our own site’s Digital Daily scribe, John Paczkowski, has so perfectly dubbed the “econalypse.”

Ironically, Walt Mossberg and I planned to launch the very first conference in the middle of the last major downturn for tech, in 2001. But, in the carnage of the Web 1.0 meltdown, we actually held off for two years, with our first D gathering taking place in 2003.

It’s been a real winning streak since then for D, due in large part to our great speakers–such as Microsoft (MSFT) icon Bill Gates and Apple (AAPL) legend Steve Jobs.

Both have been onstage many times over the years, including a historic interview the pair of tech titans did together in 2007 at D5.

Other amazing speakers have included: Howard Stringer of Sony (SNE), Barry Diller of InterActiveCorp (IACI), legendary director George Lucas, Time Warner (TWX) CEO Jeff Bewkes, Jeff Bezos of Amazon (AMZN), former eBay (EBAY) CEO Meg Whitman, News Corp. (NWS) head Rupert Murdoch, Microsoft head Steve Ballmer, Walt Disney (DIS) honcho Bob Iger, Bobby Kotick of Activision Blizzard (ATVI), CBS (CBS) CEO Les Moonves, Democratic and Republican pols like former Vice President Al Gore and Sen. John McCain, all the leadership of Google (GOOG) and many, many more.

We have had a lot of great moments onstage with all these tech and media players over the years, to be sure, with interviews ranging from the funny to the sublime to the truly disastrous.

But, like the digital industry and the innovation our conference focuses on, we also like to lean forward to try to figure out what the Next Big Thing is around the corner, whether it comes from Silicon Valley or not.

That’s why we’re kicking off our conference on May 26 with two of the founders of Twitter–Biz Stone and Evan Williams–who are riding high on tech’s latest hot thing, which might turn out to be either a rocket ship or a shooting star.

They’ll be followed up over the next two days by a plethora of interesting players, from the leaders of several major mobile companies to content execs hit hard by fast-moving digital forces to a new Internet leader like Yahoo (YHOO) CEO Carol Bartz, who is trying to turn around one of the Web’s great icons from its more recent lackluster path.

And, as we always do, we will be featuring a spate of demos too, trying to see if we can unearth that next next thing.

In the past, the D stage has seen the debut of start-up products like Sling Media’s Slingbox, Aliph’s Jawbone and Pure Digital’s Flip, all of which have gone onto glory. And also some, like Palm’s Foleo, which did not.

While not everyone can attend D, our crack staff is committed to bringing all the action from this year’s conference to readers of the All Things Digital site via up-to-the-minute blogs, photos, videos, tweets, digs and more. We’ll also, as soon as we can, post the videos of each of the onstage sessions, in their entirety.

Until it all kicks off, here is the list of speakers, below, in alphabetical order, who will be appearing at 2009′s D7 conference:

Irving Azoff | CEO of Ticketmaster Entertainment (TKTM)

Mitchell Baker | Chairman of Mozilla

Steve Ballmer | CEO of Microsoft

Carol Bartz | CEO of Yahoo

Mark Cuban | Chairman of HDNet and Owner of the Dallas Mavericks, Landmark Theaters and Magnolia Pictures

Eve Ensler | Playwright and Founder of V-Day

Arianna Huffington | Editor-in-Chief of the Huffington Post

Olli-Pekka Kallasvuo | CEO of Nokia (NOK)

Mike Lazaridis | Co-CEO of Research In Motion (RIMM)

John Lilly | CEO of Mozilla

John Malone | Chairman of Liberty Media Corporation (LCAPA)

Roger McNamee | Partner, Elevation Partners

Jon Miller | Chief Digital Officer of News Corp.

Jon Rubinstein | Executive Chairman, Palm (PALM)

Randall Stephenson | CEO of AT&T (T)

Biz Stone | Co-founder of Twitter

Owen Van Natta | CEO of MySpace

Katharine Weymouth | Publisher of the Washington Post (WPO)

Evan Williams | Co-founder and CEO of Twitter

Jeff Zucker | CEO of NBC Universal (GE)

Incredibly, this is the seventh year of the D: All Things Digital conference.

We feel very lucky to get here, especially in the midst of what our own site’s Digital Daily scribe, John Paczkowski, has so perfectly dubbed the “econalypse.”

Ironically, Walt Mossberg and I planned to launch the very first conference in the middle of the last major downturn for tech, in 2001. But, in the carnage of the Web 1.0 meltdown, we actually held off for two years, with our first D gathering taking place in 2003.

It’s been a real winning streak since then for D, due in large part to our great speakers–such as Microsoft (MSFT) icon Bill Gates and Apple (AAPL) legend Steve Jobs.

Both have been onstage many times over the years, including a historic interview the pair of tech titans did together in 2007 at D5.

Other amazing speakers have included: Howard Stringer of Sony (SNE), Barry Diller of InterActiveCorp (IACI), legendary director George Lucas, Time Warner (TWX) CEO Jeff Bewkes, Jeff Bezos of Amazon (AMZN), former eBay (EBAY) CEO Meg Whitman, News Corp. (NWS) head Rupert Murdoch, Microsoft head Steve Ballmer, Walt Disney (DIS) honcho Bob Iger, Bobby Kotick of Activision Blizzard (ATVI), CBS (CBS) CEO Les Moonves, Democratic and Republican pols like former Vice President Al Gore and Sen. John McCain, all the leadership of Google (GOOG) and many, many more.

We have had a lot of great moments onstage with all these tech and media players over the years, to be sure, with interviews ranging from the funny to the sublime to the truly disastrous.

But, like the digital industry and the innovation our conference focuses on, we also like to lean forward to try to figure out what the Next Big Thing is around the corner, whether it comes from Silicon Valley or not.

That’s why we’re kicking off our conference on May 26 with two of the founders of Twitter–Biz Stone and Evan Williams–who are riding high on tech’s latest hot thing, which might turn out to be either a rocket ship or a shooting star.

They’ll be followed up over the next two days by a plethora of interesting players, from the leaders of several major mobile companies to content execs hit hard by fast-moving digital forces to a new Internet leader like Yahoo (YHOO) CEO Carol Bartz, who is trying to turn around one of the Web’s great icons from its more recent lackluster path.

And, as we always do, we will be featuring a spate of demos too, trying to see if we can unearth that next next thing.

In the past, the D stage has seen the debut of start-up products like Sling Media’s Slingbox, Aliph’s Jawbone and Pure Digital’s Flip, all of which have gone onto glory. And also some, like Palm’s Foleo, which did not.

While not everyone can attend D, our crack staff is committed to bringing all the action from this year’s conference to readers of the All Things Digital site via up-to-the-minute blogs, photos, videos, tweets, digs and more. We’ll also, as soon as we can, post the videos of each of the onstage sessions, in their entirety.

Until it all kicks off, here is the list of speakers, below, in alphabetical order, who will be appearing at 2009′s D7 conference:

Irving Azoff | CEO of Ticketmaster Entertainment (TKTM)

Mitchell Baker | Chairman of Mozilla

Steve Ballmer | CEO of Microsoft

Carol Bartz | CEO of Yahoo

Mark Cuban | Chairman of HDNet and Owner of the Dallas Mavericks, Landmark Theaters and Magnolia Pictures

Eve Ensler | Playwright and Founder of V-Day

Arianna Huffington | Editor-in-Chief of the Huffington Post

Olli-Pekka Kallasvuo | CEO of Nokia (NOK)

Mike Lazaridis | Co-CEO of Research In Motion (RIMM)

John Lilly | CEO of Mozilla

John Malone | Chairman of Liberty Media Corporation (LCAPA)

Roger McNamee | Partner, Elevation Partners

Jon Miller | Chief Digital Officer of News Corp.

Jon Rubinstein | Executive Chairman, Palm (PALM)

Randall Stephenson | CEO of AT&T (T)

Biz Stone | Co-founder of Twitter

Owen Van Natta | CEO of MySpace

Katharine Weymouth | Publisher of the Washington Post (WPO)

Evan Williams | Co-founder and CEO of Twitter

Jeff Zucker | CEO of NBC Universal (GE)

That’s what finally allowed Disney (DIS) to join up with GE’s (GE) NBC and News Corp.’s (NWS) Fox in Hulu, the fast-growing Web video site.

The deal, which was finally announced yesterday, has its roots in a November 2007 meeting between Hulu CEO Jason Kilar and Disney’s executive team where Kilar demoed a private beta of the service on Disney CEO Bob Iger’s computer. But the two sides didn’t really start talking in earnest until mid-December of last year.

Since then, people who were involved in the negotiations tell me, the discussions were a long slog, complicated by the fact that there were essentially five parties in the talks. But at no point did the deal ever look to be in jeopardy, I’m told–even though everyone from Google (GOOG) to Comcast (CMCSA) was trying to convince Iger not to go forward.

In the end, Disney essentially agreed to the same terms that NBC and Fox first used when put the site together two years ago. The main components:

• A two-year guarantee of exclusive third-party access to ABC’s online TV inventory, as well as a smattering of Disney cable shows.
• Marketing money, to be spent buying market-rate air time promoting Hulu on Disney TV properties. NBC and Fox handed over $50 million each, doled out over two years, when they formed Hulu; I’m told Disney has committed to a similar amount.
• A cash investment in Hulu itself. I’m told that NBC and Fox kicked in a total of about $30 million to get Hulu off the ground, prior to getting Providence Equity Partners to pony up $100 million for a 10 percent stake. Given that NBC and Fox took on substantial risk when they contributed their stakes, it’s likely that Disney ended up paying a larger sum.

At least as important as Disney’s contribution, though, is NBC and Fox’s decision to re-up their exclusivity arrangements for another two years. Some executives at NBC and Fox I’ve talked to have downplayed this part of the deal, arguing that their companies would have kept working with Hulu even without renewing their exclusives, which were expiring.

But the reality is that if NBC and Fox had not renewed, it would have been a signal that the networks were no longer committed to their joint venture, a question that’s been whispered more and more often in recent months. There are also some practical effects when it comes to dealing with the cable guys (see below).

The deal still needs regulatory approval, and you may hear the likes of Google and Comcast murmuring loudly that a partnership between three of the four broadcast networks violates antitrust statues. But assuming it does go through, here are some of the ripple effects:

CBS: The broadcaster is on a lonely road, which is not where entertainment companies like to find themselves. It may well be that the Web strategy CBS has been pursuing–don’t put too much of your stuff online, but syndicate the stuff you do put out there as widely as possible–is the right way to go. But if CBS CEO Les Moonves ever changes his mind, he will have a hard time climbing aboard the good ship Hulu.

For the record, Kilar is enthusiastic about bringing on CBS: “We’d love to see CBS jump into Hulu,” he says. We’d love to see Time Warner (TWX) jump in to Hulu, too.”

But executives at his partner networks–the same guys who forced him to cut off Web upstart Boxee, remember–says that the door is shut for CBS, at least in terms of the equity deal ABC just got.

If CBS (CBS) does want to make a deal with a big Web distributor, it may well end up doing something with Google’s YouTube, which already distributes snippets of CBS shows on its site. You won’t hear CBS bragging about this out loud, but I’m told partnership has worked out very well for the network to date.

The cable guys: Note that there’s very little of Disney’s premium cable stuff on Hulu–just a smattering of SoapNet and a few shows from the Disney Channel, but nothing your kids care about. And there’s zilch from ESPN.

That’s because Iger doesn’t want to freak out cable operators that pay Disney billions a year for cable programming. So that stuff will stay offline. (Meanwhile, it may get increasingly hard to find some of the NBC/Fox cable programming on Hulu, for the same reason. Good luck watching the most recent episode of FX’s “Rescue Me,” for instance).

But the Disney move, along with NBC and Fox’s commitment to re-up their exclusivity arrangement, just complicated efforts by the likes of Comcast and Time Warner to push an “authentication” arrangement. That’s where cable subscribers–but only cable subscribers–get access to a wealth of TV on the Web.

Without the exclusivity clause, the cable guys could demand that the networks hand over their best stuff directly to them for their online efforts. Now, at least for the next two years, they’ll have work through Hulu, on Hulu’s terms.

It may be that the cable guys are so far away from making their authentication plans a reality–I’m told Comcast’s test will launch this summer with just a few thousand subscribers and will add something like 50,000 subscribers a month after that–that this might not mean much. It’s possible that by the time the cable guys are ready to really talk shop with their programmers, the two-year deals will be long expired.

Bonus: We get to see new Hulu ads, starring actors from ABC shows. I’m hoping for one featuring Jorge Garcia, who plays Hurley on “Lost.” For now, here’s the newest one in the current campaign, featuring Dennis Leary from “Rescue Me.”

At this point, I’m told, Disney (DIS) and Hulu, the joint venture between GE’s (GE) NBC and News Corp.’s (NWS) Fox, are haggling over the finer points in the tie-up: Details like which Disney shows and channels will be included in the pact and how many seats Disney will get on the company’s board. (News Corp. is the owner of Dow Jones, which owns this Web site.)

For instance, I’m told that Disney’s ESPN will not be a part of a deal, nor will ABC News, but big ABC shows like “Lost” will be. But it’s unclear, for instance, how much of Disney’s movie portfolio, including its hit Pixar films, will be included.

Whatever Disney does end up contributing to the partnership, its payment will be the same: An equity stake equal to those owned by NBC and Fox, plus a revenue share for advertising sold against its stuff.

There has been some speculation that Disney CEO Bob Iger might be set to announce a deal this morning when he appears at the cable industry’s annual convention in Washington, D.C. But I was cautioned by insiders yesterday not to expect anything quite that soon.

Still, at this point the other players that were trying to convince Iger not to do an exclusive deal with Hulu–including Comcast (CMCSA), CBS (CBS), and Google (GOOG), which was trying to strike its own deal with Disney–are now thinking about what they’ll do once it does happen.

“It’s not the end of the world, but it is big deal,” an executive at one of the soon-to-be disappointed rivals conceded to me yesterday.

Disney’s addition to Hulu won’t instantly turn the site into a financial juggernaut. Last year, Hulu was able to sell out all of its advertising inventory, but it no longer makes that claim. And it’s still unclear whether Hulu will ever able to turn a significant profit given its JV structure whereby its big media partners keep 70 percent of all ad revenue.

But the deal would help establish the site as the place for video watchers to watch “premium content”–that is, movies and full episodes of TV shows–on the Web.

That’s a problem for Google’s YouTube, which has lots of eyeballs but can’t sell ads against most of them. YouTube has been trying to fix that by wooing studios and networks to show their advertiser-friendly stuff on the site. But to date, it has only gotten a handful of movies, as well as clips from the likes of CBS and now Disney.

The deal will also put pressure on CBS to abandon its strategy, championed by digital boss Quincy Smith, of distributing its shows widely on the Web while selling the ads itself. CBS has always said it was willing to put its stuff on Hulu, though not exclusively. But people outside the company think that CEO Les Moonves won’t want to be the only broadcaster not working with Hulu and will eventually go over Smith’s head.

Sources within CBS say Moonves is committed to Smith’s strategy, which hinges on controlling the sales channel for CBS’s content. More practically, even if Moonves did want to tie up with Hulu, he wouldn’t strike an exclusive deal in the near future since CBS would have no bargaining power in the aftermath of a Disney pact.

Least perturbed will be cable giants like Comcast and Time Warner Cable (TWC), which lobbied against the deal but whose businesses are the least dependent, for now, on online eyeballs. But you may hear grumbling from the cable guys, as well as Google, that a deal that brings together three of the big four broadcast networks will raise antitrust issues. And yes, the irony here is obvious. But opponents of the deal are already pointing to the fate of Kangaroo, a similar plan to knit together British broadcasters on the Web, which was derailed by U.K. regulators earlier this year.

I’m not sure that example will be very useful on these shores, even in an Obama administration. But it will be fun to hear Iger talk about this this morning. At least I’m hoping he will: I’ll be covering his presentation, which is scheduled to start at 9:45 Eastern time.

The real news is that the company is trying to resolve a looming debt problem by slashing its dividend. CBS’s quarterly payout to investors is dropping from 27 cents to 5 cents.

What CBS didn’t announce–the now de rigueur massive write-down that so many of its big media peers have rolled out this quarter. Then again, CBS (CBS) took a $14 billion hit in the previous quarter, so that may have been sufficient.

Moonves on the dividend cut and his company’s debt issue: “By taking this step now, we will further strengthen our financial flexibility to meet our debt obligations even in difficult credit markets, and still provide our shareholders with an attractive dividend.”

Sumner Redstone’s “it’s got to get better” quote: “We are clearly in the midst of one of the most difficult financial environments in history, with very little visibility on how long these economic conditions will continue or if there is worse to come. But one thing that is clear to me is that Leslie and his team are managing our businesses superbly with an eye toward future growth. CBS’s strength as a content provider will continue to position it for success.”

The breakdown:

CBS recorded revenues of $3.53 billion, just below Wall Street’s $3.56 billion consensus. Earnings from continuing operations were 20 cents a share, but strip out impairment charges and CBS would have notched earnings of 34 cents per share. That’s well above the consensus of 26 cents. [Apologies for flubbing this the first time out.]

TV: Revenue down eight percent, Operating income (before depreciation, etc) down 35 percent

Radio: Revenue down 18 percent, OI down 53 percent

Billboards: Revenue down 15 percent, OI down 51 percent

Publishing: Revenue up one percent! But OI down four percent

Quincy Smith’s Interactive group posted a revenue increase of 218 percent, but that doesn’t mean much given that CBS didn’t own CNET a year ago. If you include CNET’s results from last year, revenue increased one percent–not bad, compared to its peers.

If you’d said a year ago that a Web ad business posting a one percent increase is a good thing, you’d have been laughed off the Internet. But here we are. For the record, the unit recorded operating income of $51.7 million on revenue of $186.3 million.

Are you one of the CNET or CBS Interactive employees who got laid off last fall? Your collective sacking cost your former employer $2.6 million in restructuring charges.

That’s because the network will be delivering its March Madness coverage using Redmond’s Silverlight streaming media technology, which for some reason stirs apoplectic emotions among a subset of tech zealots. Supposedly these folks would rather look at a blank screen than use dreaded Microsoft (MSFT) tech.

Why? Got me. I downloaded Silverlight onto my MacBook to watch NBC’s Olympics Webcasts last summer. And whenever I could find the events I wanted to watch (much harder than it should have been), I got a really great picture on my laptop.

So did some 40 million other people, which was why Microsoft wanted so desperately to get the rights to the event–it is trying very hard to gain some ground on rival Adobe’s (ADBE) Flash technology, the de facto standard for Web video. So it spends a lot of time focusing on big Web video events where it can introduce its tech to consumers.

[UPDATE: CBS wants you to know -- see comment below -- that you don't have to use Silverlight to watch the games online.]

March Madness isn’t nearly as big as the Olympics, of course: Last year, some 4.8 million people watched the tournament via CBS’s Webcast. But it’s a very big deal for CBS (CBS), which generated more than $20 million in extra advertising revenue out of the event. No word on what Microsoft had to pony up in order to get the rights this year, but Les Moonves and company certainly didn’t give them away.

Just like everyone else who racked up lots of loans when the banks were giving cash with almost no strings attached, big media have a debt hangover. Clear Channel, whose private equity owners took on $17 billion in debt to acquire it last year, is getting hammered by investors who think it won’t be able to pay that money back.

Next up for scrutiny: CBS, which has a big debt payment due next year and not that much cash on hand.

The Wall Street Journal outlines Clear Channel’s situation: The company’s debt is trading at pennies on the dollar because investors worry that its radio and billboard businesses won’t generate enough cash to satisfy certain loan covenants, which would then jack up the rates on the existing debt. The company tapped a credit line on Monday, but that’s not making anyone feel more comfortable:

Drawing down the remaining $1.6 billion in its $2 billion credit facility injects more cash into the struggling company’s balance sheet, but the move has analysts wondering whether Clear Channel may be choosing to access those funds now for fear it won’t be able to later. If the company trips certain financial covenants–conditions a company must meet to satisfy lenders–it may not be able to tap that credit, analysts say…

If the debt ratio worsens rapidly over the next few quarters, eventually hitting 9.5 or more, debt holders have the right to ask for higher interest payments or other fees from the company. They also could demand their funds back immediately, potentially sending the company into bankruptcy proceedings.”

No one is mentioning the B word in connection with CBS (CBS). But Barclays analyst Scott Shiffman, in a note published last week, does make ominous sounds (title of his report: “CBS–The Slippery Slope Has Begun”).

The gist: CBS has a $1.6 billion bond that matures next year, and about $500 million cash on hand. In order to make that payment, the broadcaster has several unappealing choices, including cutting its dividend or drawing down a revolver loan.

Any of those options, Shiffman argues, in conjunction with a weakened TV business, could prompt the newly vigilant credit rating agencies to downgrade CBS’s debt below investment grade–i.e., junk. S&P may be the first to make a call, perhaps by the end of the month, he says.

No comment from CBS. But the company does report earnings next week; expect to hear lots about this from Les Moonves and company during the Feb. 18 conference call.

By the way: I’d like to show you the CBS News interview of the month–not Katie Couric’s “60 Minutes” interview with Hudson hero pilot Chesley Sullenberger, but her pre-Grammy chat with Lil Wayne. Which included Couric’s instant classic line “You also, reportedly, like…like your weed.”

Alas, CBS has yanked all the usable versions off of YouTube and isn’t showing them anywhere on its vaunted CBS Audience Network. What gives Quincy?

Fortunately, Gawker Media’s Jezebel taped the thing, so you can head over here to watch it, as some 19,000 other people have. Well worth a couple minutes.

UPDATE: CBS Interactive head Quincy Smith graciously points out that his network does indeed have a short clip of Lil Wayne interview, and says that licensing issues prevent the network from letting us see the whole thing. But still–surely, there was some way to include the weed line in the excerpt! That’s the best part!

Here’s what they’ve got:

Watch CBS Videos Online

Or at least, meet the placeholder Web site. The real one should launch in mid-March, says Greg Mason, who came to CBS via CNET and is overseeing the operation. He’s hired Eric Schurenberg, the former managing editor of Time Warner’s (TWX) Money magazine, to handle the editorial, which will focus on personal finance rather than general business news.

Mason is hiring additional folks in advance of the launch, including on-air talent; he wouldn’t divulge total staff size but I played the higher/lower game with him and I get the sense there will be something like a dozen people hired for the site.

Obviously, it’s an interesting time to be launching a finance-oriented site, and more on that in a minute. But what’s also interesting about MoneyWatch is that it’s a project dreamed up after CBS (CBS) bought CNET last summer for $1.8 billion. And it’s the first significant example of the broadcast network and the Web site integrating their operations, at least on the content side.

Right now, you can see the occasional CNET staffer showing up on CBS–I happened to glimpse Natalie Del Conte showing off flat-screen TVs for a bemused Harry Smith this morning–but not much more than that. And CBS folks don’t really contribute at all to CNET. But MoneyWatch talent is supposed to be a regular and important contributor for all of CBS’s news operations, as well as its radio stations.

Moonves never promised much editorial synergy when CBS bought CNET–it was really about adding a big piece of Web ad inventory to complement his old media assets. It will be interesting to see if there’s much to gain from an integrated operation here.

So: Why launch a personal finance site when everyone’s finances are being obliterated? Because that’s when everyone is acutely interested in personal finance, Mason argues. “Admittedly, it’s a little countercyclical,” he says, but argues that “CBS kind of figures that the economic crisis will be one of the big stories for the next 18 months.”

Fair enough. But there is plenty of competition out there chasing those same stories. Every major business news site has a personal finance component, and there are plenty of standalone personal finance Web sites out there already–and their traffic hasn’t increased during the meltdown.

The one exception here seems to be something called WalletPop, which is owned by AOL and which I’d never heard of prior to writing this story. Mason hadn’t heard of it, either, but somehow its traffic spiked up last summer, and it now commands more than 10 million uniques a month, per Comscore (SCOR).

Here’s a traffic chart that includes WalletPop vs. competitors SmartMoney.com, Kiplinger’s and MainStreet.com (click to enlarge):

And one that doesn’t:

And then there’s the bigger question: Even if you can get eyeballs, what do you do with them after that? As I’ve previously noted, at least one survey of finance Web sites estimates that revenue is down by as much as 30 percent this quarter, for mostly obvious reasons.

But let’s tackle one thing at a time: Convincing consumers to pay attention to money stuff instead of hiding in a dark room and rocking back and forth (that’s my strategy, at least) will be tough enough. Maybe by the time MoneyWatch figures out that trick, the ad market will have crawled back.

With so many more ex-Yahoos out there now that the most recent layoffs have taken place, BoomTown put out feelers to a range of them to ask whom they would like to run the company they no longer work for.

After all, who better than to pick a new CEO than an ex?

The response I got was swift and varied wildly, depending on which way the ex-Yahoo felt the company should go, including quite a few who thought Yahoo needed to sell itself off completely.

Some considered Yahoo (YHOO) a media and advertising company, for example, while others thought of it as a more Web tools outfit. Still, others considered it a turnaround situation, requiring a wholly different kind of CEO.

Perhaps therein lies the problem–it is still hard to define precisely what Yahoo is and is not, even for its ex-employees.

In any case, here are some of the best suggestions:

1. The Media Mogul

“I think they need to sell to a media company,” said one ex-Yahoo, who posits the move needs to be drastic enough to truly reset Yahoo.

In this scenario, search gets sold to Microsoft (MSFT) and Yahoo’s online content is combined with media assets of a big entertainment and news conglomerate.

That would make the leader of Yahoo one of the following: Bob Iger of Disney (DIS); Rupert Murdoch/Peter Chernin of News Corp. (NWS); Jeff Zucker of General Electric (GE) unit NBC Universal; or Les Moonves of CBS (CBS). (News Corp. is the owner of this Web site.)

2. The Insider

A lot of votes here for former Yahoo COO Dan Rosensweig and not so many for current President Sue Decker.

Why? Several ex-Yahoos mentioned a need to refocus intently on products and the need for a product-obsessed leader, but one who also knew Yahoo well and could get things moving without needing a lengthy learning curve.

“Since Dan R. left, I think there’s been a definite void (at the senior exec level) on the product/consumer expertise and advocate front,” said another ex-Yahoo.

Other execs mentioned are former Yahoos Jeff Weiner and Jeff Mallett.

But several also pointed to board member John Chapple, who is the one most insiders say they are guessing will be the next CEO, especially since he has been reaching out to Yahoos on many levels and asking questions.

3. The Microsoftie or Googler

The new top name here is obviously recently departed online ad exec Brian McAndrews, former CEO of aQuantive, whom many think would be a strong pick and would focus the company on advertising.

In addition, most of those leaving–including several technical people–all seem to agree that Yahoo needs to get out of the search business, and pronto.

Said one engineer: “I hate to say this, but as good as we can be, we cannot compete in the war that is breaking out between Google and Microsoft. And it will only get uglier.”

Other names mentioned in this category include Yusuf Mehdi and Kevin Johnson of Microsoft, as well as Tim Armstrong of Google (GOOG).

4. The Fixer

While there are a lot of different opinions out there among the ex-Yahoos I spoke to, all agree that the company is in need of a sharp operator and someone who can do what it takes to turn the company around quickly.

That means someone like former Vodafone CEO Arun Sarin, whose name has popped up recently, or even nontechie execs known for operational skills.

“We need a decisive leader, given how slowly it takes for things to change at Yahoo, who has a real sense of urgency from the minute he or she gets the job,” said one ex-employee.

Another former exec described it as a “two-step process.” First, the turnaround CEO needs to come in and reorient, focus, and get the company going in the right direction, then a more product-oriented person can be installed under that CEO later.

5. The Holy Grail-Steve Jobs Option

I think the most interesting idea I got from all the many former Yahoos I spoke to was that Apple (AAPL) CEO Steve Jobs swoop in and buy Yahoo.

When I laughed out loud at this notion at first, the exec insisted that it was a feasible idea, given that Apple was interested in expanding its platform beyond its now-popular devices.

It’s an interesting bit of wishful thinking, of course, to imagine a “great leader” to calmly guide the company back to its roots.

Jobs, in fact, memorably addressed a meeting of Yahoo VPs in the fall of 2007. As I wrote then: “Jobs basic message [to Yahoo]: You have great assets–just like Apple did–and now it is all about execution.”

Yes, that tiny little detail.

6. Raise the Yangtanic

Interestingly, pretty much all the ex-Yahoos I talked to–as angry as some are at him for his tenure as a CEO less successful at execution and the ensuing loss of market value at Yahoo–said they did feel there was a need for Co-Founder Jerry Yang to stay around in a significant way.

“Jerry has been a really bad CEO,” said one former employee. “But he could still be an important leader at Yahoo and give the company the kind of inspiration it so desperately needs.”

Not everyone is on board with that.

“I completely disagree that Jerry should stay around. Jerry is one of the main issues at Yahoo and he and [David] Filo must go, as well as most of the board,” said one former Yahoo. “There needs to be free rein for the new CEO to make changes and that won’t be possible if Jerry is still there. Jerry is a nice guy and his heart is in the right place but he has failed as both board leader and CEO and the company needs to start fresh if it is to have a chance.”

Adds the ex-Yahoo: “Steve Jobs would be great, but I think he is busy.”

Not BoomTown.

And it is not because newly crowned CBS Interactive CEO Quincy Smith (pictured here) is the ever-amusing Energizer Bunny of the Internet.

Okay, CBS (CBS) paid too much and that makes the whole thing suspect. But is it the wrong direction?

I have been noodling on the deal for a while now and have concluded that I like it.

Why? Primarily, because it is a big bet on big traffic from a high-quality Internet-born content and video site, which has been unnecessarily pilloried much as much, much smaller Web 2.0 competitors have been over-hyped.

With a hard re-haul–and there is no question CNET has to shake the Web 1.0 tone out of its system–and a true effort to find new advertising paradigm, the site could be just the kind of proof that content on the Web can really be powerful and more lucrative.

That’s because size still does matter. CNET is a midsize network of sites–smaller than Yahoo, but much bigger than most, with a range of sites, such as the popular GameSpot (see chart below).

Solving all of CBS’s problems is not the end game here, nor should it be, which has been the tone of a lot of the coverage of the deal. That’s been especially true as the media giant’s shares have swooned.

Struck in mid-May and closed at the end of June, the union has not inspired a lot of cheering by either Wall Street or the media, neither of whom like the 22-times EBITDA price (compared with CBS’s own seven).

Typical was The Wall Street Journal, which slappity-slapped the deal–comparing it with a lackluster CBS Web deal from a few years ago when the network bought CSTV for $325 million–and even managed to insult CEO Les Moonves’s ancient acting career at the same time:

“CBS Corp. Chief Executive Leslie Moonves had a bit role in ‘The Six Million Dollar Man’ in 1977, but never made it as an actor. So maybe it’s time that Mr. Moonves stop acting like an Internet dealmaker.”

More recently, Lehman Bros. (LEH) Anthony J. DiClemente, in a longer report about CBS’s stock, noted that the deal’s impact was questionable.

He wrote: “In our view, it may take several quarters before we are able to discern if CBS’s purchase of CNET is able to help the online monetization effort for CBS and its TV content. We believe CBS will need to rejuvenate the CNET brands and ad sales effort in order to earn an adequate return on invested capital. CNET’s platform may open up a new collection of advertisers for CBS’s Internet ad sales team.”

Well, exactly. As always, the issue is going to be all about execution, making integration go smoothly and getting its ad sales team to actually begin to sell across all CBS online properties in new ways.

But what should be not lost here amid all the bellyaching about price and the depressed CBS brand and its even more depressing stock is that someone has to begin to build the next generation media model and create a critical mass of high-quality display inventory that also attracts a large and demographically attractive audience.

In other words, all the pieces are in place at CNET and CBS to do this. Whether the Energizer Bunny runs out of power before that can happen is another question altogether.

Please see this disclosure related to me and CBS.

Walt Mossberg interviewed CBS CEO Les Moonves at the fifth edition of our D: All Things Digital conference last May, where he talked about the media giant’s Internet aims.

The 53-minute video is highly pertinent to today’s acquisition of CNET by CBS for $1.8 billion in cash.

As I previously wrote, Les Moonves is getting into the Internet in a big way, it seems, if you watch this onstage interview with the CBS CEO.

While it used to be that big old-media companies, including the powerful television networks, always seemed to display disdain for the online space, these days they are talking it up like they invented it.

At the conference, in fact, Moonves unveiled CBS’s acquisition of Last.fm, the Internet social music platform, and spoke a lot about getting the company’s content everywhere.

Here is Moonves: