Team From MIT Wins DARPA Red Balloon Challenge

Information Week

Massachusetts Institute of Technology researchers took less than nine hours to find 10 weather balloons that the Defense Advanced Research Projects Agency had placed randomly in public places around the United States, claiming the $40,000 contest prize.

About 4,300 teams participated in DARPA's Network Challenge over the weekend. The Pentagon will study the results to better understand how social networking can solve large-scale problems that require fast solutions.

DARPA placed the 8-foot, red balloons, all marked with numbered pennants and most with a DARPA banner, in public parks and other locations, from Miami's South Beach and San Francisco's Union Square to a tennis court in Charlottesville, Va. [see: Pentagon Trying To Crack Social Networking]

Teams used various methods to identify balloon locations, from synthesizing public information to collaborating in large groups. Some tried to confuse challenge participants with false locations, including a large paper copy of a balloon in Providence, R.I.

The winning team was headed by scientist Riley Crane, who is studying social networking in a post-doctoral fellowship at M.I.T. and author of academic papers about YouTube. His team, the M.I.T. Red Balloon Challenge Team, was a collaborative effort that used an inverse pyramid model to encourage the help of others.

The team divvied the $40,000 by giving $2,000 to the first person who sent them correct coordinates for each balloon, then $1,000 to whoever invited that person to participate, $500 to whoever invited that person, and so on. Leftover funds will go to charity.

In addition to studying interaction that took place on the Web, DARPA plans to interview teams in order to understand the strategies they used to build networks and collect information.

DARPA is the government agency that developed many of the technologies that became integral to the Internet. The Network Challenge is one of a series of recent DARPA-sponsored challenges, which have included a $2 million prize for the builders of a robot car that drove itself over a 131-mile desert course in California.

Zucker Needs To Prove Himself To New Bosses From Comcast

Bloomberg

Jeffrey Zucker, NBC Universal’s chief executive officer, may have as few as nine months to prove himself to his new bosses at Comcast Corp. while the biggest U.S. cable operator seeks regulatory approvals.

Zucker, 44, will continue to run NBC Universal during a regulatory review period, executives of the Philadelphia-based company said yesterday on a conference call. The process to acquire control of the General Electric Co. unit may take nine to 12 months.

Profit at NBC Universal has slid 27 percent this year. Under Zucker’s watch, the company’s cable channels lifted results while the last-place NBC broadcast network sank lower in ratings. He moved talk-show host Jay Leno to prime-time, drawing scrutiny from analysts and industry executives who question whether he’s the best choice to lead NBC under Comcast.

“Wall Street will go insane if Zucker keeps his job,” Laura Martin, an analyst at Needham & Co. in Pasadena, California, said in an interview. “Wall Street views Jeff Zucker as value destructive. He has many excuses but few value- creating results.”

Zucker wasn’t available for an interview, according to a spokeswoman for New York-based NBC Universal.

Since Zucker became CEO in February 2007, NBC has fallen further behind rivals CBS, Fox and ABC in prime-time ratings. Zucker renewed Kevin Reilly’s contract in 2007 and replaced him shortly afterward with TV producer Ben Silverman as chief of NBC Entertainment. Silverman left in September of this year, after helping Zucker to engineer the Leno move from late-night.

Weather Channel

Zucker pared 500 jobs one year ago and consolidated operations to cut costs as advertising sales fell. He expanded NBC’s holdings by buying the Weather Channel for $3.5 billion with private-equity partners Bain Capital LLC and Blackstone Group LP. Fairfield, Connecticut-based GE reduced the value of NBC Universal’s stake in the Weather Channel in the third quarter, the parent company said in October.

Should the deal be approved, Zucker will report to Stephen Burke, Comcast’s chief operating officer, the cable company said yesterday in a statement.

Comcast, the largest U.S. cable-TV provider, yesterday agreed to form a $37 billion joint venture combining GE’s NBC Universal with its own media assets. Comcast will own 51 percent of the new entity.

Zucker “has helped lead other large acquisitions for NBC, successfully transforming their company,” Comcast CEO Brian Roberts said yesterday on a conference call. “We are looking forward to Jeff and his team doing the same here again.”

Regulatory approval may take 9 months to 12 months, Zucker told NBC employees in a memo.

‘Business as Usual’

“For now, it remains business as usual,” said Zucker, who has been named CEO of the new venture. “I expect this will be the case for the vast majority of you even after the deal closes.”

Comcast, which raised its dividend yesterday, rose 22 cents, or 1.4 percent, to $16.13 at 4:06 p.m. New York time today on the Nasdaq Stock Market. GE gained 20 cents to $16.20 and is unchanged this year on the New York Stock Exchange.

NBC, where ratings have dropped for seven straight seasons, hasn’t recovered from losing “Seinfeld” and other hit shows at the start of the decade. The network will be “fiscally prudent” when weighing a bid for broadcast rights to the 2014 Winter Olympics in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro, Zucker said today on CNBC. The Olympics are something the company would “like to stay in,” he said.

Zucker has “at least a couple of years” to right the broadcast network and bring it up to second or third place in the ratings, according to Don Seaman, head of TV research at MPG North America, a New York-based media buyer.

“NBC, their biggest issue right now is they have no identity,” Seaman said. “They just seem so adrift.”

‘Also-Ran’

When Zucker became NBC’s entertainment chief in 2000, the network was in second place in prime-time. In 2004, he was promoted to lead NBC Universal’s TV group, which also included cable properties.

“Part of me is surprised he keeps going and going and going,” said Seaman, whose company’s clients include McDonald’s Corp., Sears Holding Corp. and Carnival Corp. cruise lines. “NBC unfortunately has become that also-ran.”

The network hasn’t “done a very good job” of programming prime-time in the last several years and needs to do better, Zucker said last month at a conference at the Paley Center for Media in New York.

At the Universal Pictures film unit, U.S. and Canadian box- office sales have declined 16 percent year-to-date, according to researcher Box Office Mojo. At the same time, the industry is poised to set a record, surpassing $10 billion in sales, according to estimates from Hollywood.com Box-Office. The industry is grappling with a decline in DVD sales.

NBC Rise

In October, Zucker shuffled management at the film studio, naming Adam Fogelson chairman and Donna Langley co-chairman, replacing Marc Shmuger and David Linde.

Zucker, a Harvard graduate, started as a researcher for NBC Sports coverage of the 1988 Seoul Olympics. Later he landed at the “Today” show, which he would eventually run by the age of 26, and ascended to run NBC’s Los Angeles entertainment division in 2000. He became the network’s president two years later.

Bob Wright, Zucker’s predecessor who helped merge NBC and Vivendi SA’s Universal Studios, is credited with creating cable channels such as MSNBC and CNBC, and acquiring Telemundo and Bravo. NBC Universal’s third-quarter cable operating profit climbed 11 percent to $552 million as sales gained 8 percent to $1.2 billion, GE said Oct. 16.

It’s advantageous for Comcast to keep NBC Universal stable during the acquisition process, Wright said. He declined to comment on Zucker’s performance.

‘Getting the Deal Done’

“Right now the focus is on getting the deal done, and keeping management intact,” Wright said in an interview.

Firing Zucker could be costly. His employment contract runs through 2013, according to two people with knowledge of the agreement. They asked not to be named because terms aren’t public.

“Replacing Jeff Zucker would underscore to Wall Street that value creation is Comcast’s top priority,” Martin said. “NBC has gone to fourth from first and he should take the blame. He should get out of the way.”

Comcast, General Electric Make It Official

Multichannel News

The $30 billion deal that switches control of NBC Universal from General Electric to Comcast brings value to allow everyone involved to focus more sharply on their core businesses, leaders of the two companies said Thursday.

"Either you're moving forward or you're moving backwards," GE CEO Jeff Immelt said in an interview on CNBC. "Being able to partner in cable and digital makes NBC Universal more valuable for investors, for Comcast investors and for the NBCU team."

General Electric and Comcast earlier announced the agreement that stands as one of the biggest deals in media history.

Comcast [ CMCSA 15.975  +1.035 (+6.93%) ], the largest cable TV operator in the US, will end up controlling 51 percent of the newly-formed company while GE [ GE 16.25  +0.18 (+1.12%) ] will own 49 percent.

The transaction could take more than a year to close as the companies await approval from the Federal Communications Commission.

Comcast Chairman Brian Roberts told CNBC he believes the deal will be approved, as do most analysts.

"We think this is an approvable transaction," Roberts said during a joint interview with Immelt (see video below). "We think this is pro-consumer and brings real benefit at a time when distribution is going from physical to electronic in the digital age. This vertical integration tends not to present some of those challengs that a horizontal integration might."

Roberts added that he sees few major changes occurring at least for employees as Comcast realizes the value particularly of the cable channels, such as Bravo, Syfy and E!, in NBC's domain.

"This is a different time, a different deal, and we'll have to execute to show that. But in our assumptions we're not assuming any great layoffs or changes as a result of that," he said. "We think cable programming and the content business in general, structured properly, is a good business."

"This deal is highly structured, gives us real incentives to grow the business together," he added. "I think the two of us coming together are better than alone and the fact that we're a cable company is certainly not going to hurt this company. I think we're going to focus and we're pretty excited."

GE, parent of CNBC, currently owns 80 percent of NBCU, which the two companies have valued at about $30 billion. Before a final deal could be struck, Vivendi of France had to agree to sell its 20 percent stake in NBC Universal, which GE ultimately agreed to buy for $5.8 billion.

The mega deal includes the spinoff of NBC Universal and $9.1 billion in debt. It also includes the merger of Comcast's content assets valued at $7.25 billion and a $6.5 billion cash contribution.

"For Comcast, this transaction is strategically compelling and will generate attractive financial returns and build shareholder value," Comcast Chairman and Chief Executive Officer Brian Roberts said in a press statement.

"It is also expected to be immediately accretive and will also allow us to maintain our strong commitment to returning capital to shareholders- all while increasing the scale, capabilities and value of our cable distribution, content and digital assets," Roberts added.

At the same time, Comcast announced it increased the company's planned annual dividend by 40 percent to $0.378 per share.

Disney Rival

When completed, the deal would make Comcast one of the nation's largest entertainment companies rivalling the heft of its former takeover target, Walt Disney [ DIS 30.59  -0.20 (-0.65%) ].

The transaction will generate about $8 billion in cash at closing, with an expected small after-tax gain, GE chairman and CEO Jeff Immelt said in the statement.

"I believe that the new NBCU will deliver value for both Comcast and GE in the future. We will give consumers and advertisers more choice and our cable and digital assets will be second to none," Immelt said.

Comcast wants NBC Universal largely for its lucrative cable channels, such as Bravo and CNBC. NBC Universal also spans the NBC and Telemundo broadcast networks, the Universal Pictures movie studio and Universal theme parks.

Comcast is eager to diversify its holdings amid an encroaching threat from online video and more aggressive competition from satellite and phone companies that offer subscription TV services.

Jeff Zucker, current president and CEO of NBCU, will be CEO of the new joint venture.

The deal bodes well for the two companies, Lawrence Haverty, Associate Portfolio Manager at Gabelli Global Multimedia Trust, told CNBC. Haverty owns shares in both companies.

The cable business is going to rebound with advertising revenues in general but "the future for the broadcast networks is very problematic," he said.

"The only reason to hold off on this is the regulatory delay issue which is frankly, in my opinion, just a mess… the time that it's going to take," Haverty added.

The two companies will look at all platforms to see where they can find value, Anthony Fry, senior managing director at Evercore Partners, told CNBC's "Strictly Money.""They will want to keep whatever they can actually find a way of creating monetary value across multiple platforms… The future is about what is the content that you own that you can find ways of distributing, of which customers will pay," Fry said.

Although the deal holds the promise that movies could reach cable TV more quickly after showing in theatres, and that TV shows could appear faster on cell phones, it has already raised concerns that Comcast would wield too much power over entertainment.

Exit provisions are critical in joint ventures because they deal with when and how a partner can get out. In the case of GE, many of its shareholders have urged the conglomerate to offload NBC Universal, whose broadcast and cable networks, movie studio and theme parks are considered misfits among GE's mostly industrial operations.

Vivendi will continue to receive quarterly dividends from NBC Universal until the deal is completed and if it does not complete, it would launch an accelerated IPO for the stake, the company said. 

Comcast and General Electric Co. formally announced what may arguably have been the media industry's worst kept secret over the past few months, that they have agreed to form a joint venture with GE's NBC Universal media properties valued at about $30 billion.

The announcement, which had been expected ever since early October when it first surfaced that the two business giants were in talks, contained few surprises. According to the deal GE will contribute NBCU's businesses valued at $30 billion, including its cable networks, filmed entertainment, televised entertainment, theme parks, and unconsolidated investments, subject to $9.1 billion in debt to third party lenders. Comcast will contribute its cable networks including E!, Versus and the Golf Channel, its ten regional sports networks, and certain digital media properties, collectively valued at $7.25 billion, and make a payment to GE of approximately $6.5 billion of cash subject to certain adjustments based on various events between signing and closing.

A conference call with the financial community is scheduled fortoday at  8:30 p.m. (ET),  while a media call is slated for two hours later. Check multichahnnel.com for updates and more details on this transformative agreement.

The deal will create the Comcast Entertainment Group (CEG), which will house Comcast's interest in the joint venture and will stand alongside Comcast Cable, which operates the company's traditional cable business. Headquarters for the business will remain in New York. The joint venture board will have three directors nominated by Comcast and two nominated by GE.

"This deal is a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere' media that American consumers are demanding," Comcast chairman and CEO Brian Roberts said in a statement. "In particular, NBCU's fast-growing, highly profitable cable networks are a great complement to our industry-leading distribution business. Today's announced transaction will increase our capabilities in content and cable networks. At the same time, it will enhance consumer choice and accelerate the development of new digital products and services."

The deal marks the beginning of an exit from the media space for GE, which bought the NBC broadcast network in 1986 and steadily increased its cable holdings over the years. In 2004 the company significantly boosted its cable presence with the purchase of 80% of Vivendi Universal and under chairman Jeff Zucker has added to its cable portfolio with the purchase of networks like Oxygen and The Weather Channel. Zucker will become CEO of the joint venture, reporting to Comcast chief operating officer Steve Burke.

"The combination of Comcast's cable and regional sports networks and digital media properties and NBCU will deliver strong returns for GE shareholders and business partners," GE chairman and CEO Jeff Immelt said in a statement. "NBCU has been a great business for GE over the past two decades. We have generated an average annual return of 11 percent, while expanding into cable, movies, parks and international media. We are reducing our ownership stake from 80 percent to 49 percent of a more valuable entity. By doing so, GE gets a good value for NBCU. This transaction will generate approximately $8 billion of cash at closing with an expected small after-tax gain."

While some critics have pointed to the failure of past attempts to meld distribution with content - Time Warner, which split off its cable distribution unit in March is held up as a prome example, Burke said in a statement that the situation will be different with Comcast NBCU.

"Both Comcast and NBCU have excellent track records of integrating and growing multi-billion dollar businesses, including significant content acquisitions," Burke said in a statement. "In addition, we have both developed some of the country's most popular programming and built many of the most watched and valued networks in the industry. We are confident that we'll be even stronger together, and look forward to working with Jeff Zucker and the NBCU team to deliver the best consumer experience."

Zucker also seemed promed for the challenge.

"Combining the assets of NBCU, ranging from our suite of cable properties and two broadcast networks to a legendary film studio and global theme park business, with the content assets and resources of Comcast, will enable us to continue to thrive in an ever-changing media landscape," Zucker said in a statement. "Consumers of all of our products - on screens large and small - will have the benefit of enhanced content and experiences, delivered to them in new and better ways as a result of this transaction. This marks the start of a new era for NBCU, and I'm genuinely excited that I will be leading this wonderful organization, along with the Comcast team, at this important time in our history."

Below are some of the key deal points:

• NBCU will borrow approximately $9.1 billion from third-party lenders and distribute the cash to GE.

• NBCU, valued at $30 billion, will be contributed to the newly formed joint venture. Comcast will contribute its programming businesses and certain other properties valued at $7.25 billion.

• GE will acquire Vivendi's 20% interest in NBCU for $5.8 billion. GE will purchase approximately 38% of Vivendi's interest (or approximately 7.66% of all outstanding NBCU shares) from Vivendi for $2 billion in September 2010, if the Comcast transaction is not closed by then. GE will acquire the remaining 62% of Vivendi's interest (or approximately 12.34% of all outstanding NBCU shares) for $3.8 billion when the transaction closes.

• Comcast will make a payment to GE of approximately $6.5 billion in cash subject to certain adjustments based on various events between signing and closing.

• The new venture will be 51% owned by Comcast and 49% owned by GE.

• GE expects to realize $9.8 billion pre-tax in cash before debt reduction and transaction fees and after buyout of the Vivendi stake. GE expects to realize approximately $8 billion in cash after paying down the existing NBCU debt and transaction fees.

• GE will be entitled to elect to cause the joint venture to redeem one-half of its interest at year 3 ½ and its remaining interest at year 7. The joint venture's obligations to complete those purchases will be subject to the venture's leverage ratio not exceeding 2.75X EBITDA and the venture continuing to hold investment-grade ratings. Comcast also has certain rights to purchase GE's interest in the venture at specified times. All such transactions would be done at a 20% premium to public market value with 50% sharing of upside above the closing valuation.

• To the extent the joint venture is not required to meet GE's redemption requests, Comcast will provide a backstop up to a maximum of $2.875 billion for the first redemption and a total backstop of $5.750 billion.

Britain's Johnston Press Experimenting With Paid Content

Times Online

Britain’s most prolific newspaper publisher began charging yesterday for some of its online content, in a closely watched move that could be copied across the country.

Johnston Press, which owns more than 300 local newspapers including the Yorkshire Post and The Scotsman, put “paywalls” around the websites of six of its titles. It is the first regional publisher to charge for online news.

From yesterday, readers of three Johnston titles, the Northumberland Gazette, the Whitby Gazette and the Southern Reporter, will pay £5 for a three-month online subscription. Three others papers, the Carrick Gazette, the Worksop Guardian and Ripley and Heanor News, will post summaries online and tell readers to buy the paper for the full story.

John Fry, the chief executive of Johnston Press, said that his industry had become more open recently to charging for content. “In the last six months the nature of the conversation has changed,” he said.

Mr Fry will judge whether the experiment has been a success before deciding whether to extend the scheme.

Rival publishing groups await the results of the three-month trial. Like them, Johnston Press has been bombarded by both recession and a declining readership. Advertising revenues at the group slumped by 42 per cent over the past two years. Although the decline is bottoming out, executives across the newspaper industry are looking at new ways to boost earnings. “It’s clearly an interesting opportunity for the industry,” said Lynne Anderson, a spokeswoman for the Newspaper Society, which represents local titles. “We would expect more publishers to start exploring whether consumers would be willing to pay for different sections of local content.”

The Johnston scheme follows the announcement by Rupert Murdoch, the head of News Corporation, that he intends to introduce fees for all of the group’s news websites, including The Times. Mr Murdoch’s plans were boosted this month by a Boston Consulting Group survey which found that 48 per cent of British and American consumers would be willing to pay for online news.

But other surveys have reached different conclusions, and some media commentators still think charging for online content is risky. “If you have content which broadly can be found somewhere else you’re going to really restrict people coming to your website,” Emily Bell, director of digital content at the Guardian, told Radio 4 yesterday.

Mr Fry emphasised that his local newspapers offered a “unique” service which readers may be prepared to pay for. Reports on local court and council meetings, for instance, could not be accessed elsewhere.

In America, newspaper paywalls have had varying degrees of success. In 2007 The New York Times scrapped its premium subscription programme for online access to columnists and its archive. But the Arkansas Democrat Gazette, which charges online, has maintained its circulation and income.

Specialist publications such as the Financial Times and The Wall Street Journal, another News Corp title, also have subscription services.

Mingling with other regional newspaper executives at a lunch hosted yesterday by the Newspaper Society, Mr Fry also accused the BBC of “nicking content” through its local news websites. The corporation was “threatening to collapse the news pyramid”, he said. A BBC spokewoman said that the corporation was “a strong contributor to original local journalism”.

Speaking at the lunch was Lord Mandelson, the Business Secretary, who said there was a “strong case” for alternative public content providers to keep the BBC “on its toes”.

A national roll-out of independently funded news groups is scheduled for 2013, he said.

Last week Mark Thompson, the Director-General of the BBC, hinted that he would rein in the Corporation’s online local news output. Mr Thompson said that a strategy review to be announced in the New Year would make sure that the “many millions of pages that are up there need to be there”.

“It might be a slightly smaller website,” he said. “It might be stronger, making sure we are playing to our strengths.”

Reader reaction

Whitby Gazette

In the Yorkshire fishing port of Whitby the idea of paying £5 to subscribe to the online version of the local paper for three months did not impress the residents (Andrew Norfolk writes).

Jane Legge, 58, said that the Whitby Gazette would be “lucky” if people subscribed to an online service that was “not very easy to look at and navigate around. I think that paying for news online has got to happen eventually, otherwise newspapers will go under, but I wouldn’t subscribe. To say there’s not a lot going on in Whitby would be an understatement.”

Worksop Guardian

Online readers of the Worksop Guardian are being tempted by the first sentence of each story, then told that they should buy a copy of the paper (Andrew Norfolk writes). Residents questioned yesterday whether anything ever happened in the town that was exciting enough for a single-sentence summary to make them eager to spend 60p on the paper.

Dawn Hamilton, 19, a student, said: “I don’t think putting teasers on the internet will work.” But Daniel Hall, 24, said: “£5 for three months wouldn’t be very much.”

Pentagon Trying To Crack Social Networking

NY Times

The prize is $40,000, and it goes to the first person or group to determine the locations of 10 red balloons that can be anywhere in the continental United States.

 The apparent frivolity of the challenge is only on the surface. This is not a game invented by some eccentric Web Midas. The contest, which takes place on Dec. 5, is being sponsored by Darpa, the Pentagon’s research agency.

The goal is to learn more about social behavior in computer networks and how large computer-connected teams use their resources and connections to compete.

There is also an invention being celebrated. Peter Lee, a computer scientist and one of the Darpa directors organizing the contest, said Dec. 5 would be the 40th anniversary of the day when the first four nodes of the Arpanet — the experimental military-sponsored computer network that was the forerunner of today’s Internet — were connected.

Darpa has previously sponsored three “grand challenges” in an effort to advance the technology for autonomous vehicles. In the second one, in 2005, a Stanford University team won $2 million when its roboticized Volkswagen Touareg was the quickest to navigate a 131-mile course through California desert.

The mission of the agency, created in 1958 after the Sputnik satellite’s launching, is to guard the country against technological surprise. But Darpa prompted concerns about privacy after the Sept. 11, 2001, attacks when it created a program to use data-mining technologies to identify potential terrorists.

Dr. Lee said he was not certain what to expect in the tactics that teams might use to track down the balloons, which will be visible from public roadways for a single day. Some groups are developing software applications. Dr. Lee said he also expected large teams of spotters and even the possibility that some groups might use subterfuge like disseminating false information.

Other groups may try to pay for information, he said, noting that even during a brief experiment the agency ran with a balloon near its headquarters, information on the location was offered for sale on Craigslist.

Dr. Lee said the agency would continue to pursue a number of large and small challenge-style contests to foster what he described as new ways to tap into pools of talented individuals and creative groups. Contestants from anywhere in the world may participate in this contest, he said, and registration will stay open until the contest begins.

GE Makes Ready For Sale Of NBC

NY Times

General Electric has reached a tentative agreement with the French media conglomerate Vivendi that clears the way for the sale of NBC Universal, including the flagship NBC network, to Comcast, the nation’s largest cable operator, people briefed on the deal said Monday.

Under terms of the deal, G.E. will buy Vivendi’s 20 percent stake in NBC Universal for about $5.8 billion. It removes one of the few remaining hurdles in its plan to sell control of the television and movie company to Comcast in a $30 billion agreement that reflects the changing landscape of broadcast television.

While a deal between G.E. and Comcast still could hit a snag over the final price, it is considered highly likely: G.E. wants to sell NBC because of rising losses, and Comcast wants to buy it to control more of the television programs and movies that flow through its cable systems.

The final threads may take days to sew up and there is a tentative plan to announce a final deal on Thursday, according to these people, who spoke on condition of anonymity because the negotiations are not complete.

While the agreement still could fall apart, G.E.’s decision to sell NBC Universal reflects the shifts in fortune that are battering the media business, especially network television.

G.E. executives had insisted until very recently that they had no interest in selling NBC Universal, even as they tried to interest suitors, like Time Warner and Comcast, through back-channel flirtations.

Their attempts grew more urgent after internal forecasts showed the once very profitable broadcast division of NBC Universal could lose big, a remarkable downturn for a network that had earned roughly $400 million in past years, according to an executive briefed on the matter. NBC has had an especially difficult few years in prime time, where the network, once home to “Seinfeld,” “Friends” and “E.R.,” is mired in last place.

Although the News Corporation, the conglomerate controlled by Rupert Murdoch, considered making an offer, Comcast was the lone serious suitor, a testament to the uncertain future of mainstream media, as the Internet has fractured audiences and few viable business models have emerged for the distribution of content online.

In 2003, when Vivendi held an auction for its Universal properties, many big media companies took part, including Comcast, Viacom, Cablevision, Liberty Media and MGM.

This time, there was only Comcast, which under its chief executive, Brian L. Roberts, has long harbored big ambitions of becoming a major producer of television and movies. In 2004, Comcast failed in a hostile takeover bid for the Walt Disney Company.

In the proposed deal, Comcast will contribute its own cable channels, which include Versus, the Golf Channel and the E Entertainment channel, and a modest amount of cash, about $5 billion, to a joint venture in which it will own 51 percent. G.E. will retain a 49 percent stake, and would likely reduce its ownership over several years.

In its size and melding of distribution of content and distribution, the proposed deal resembles the takeover of Time Warner by AOL. If Steve Case, the former head of AOL, was the public face of that failed merger, the public face of the proposed NBC-Comcast deal could well be Jay Leno.

Mr. Leno had long ruled late-night television as host of “The Tonight Show,” one of the network’s strongholds, along with its morning show and news division. In a risky move, Jeffrey Zucker, the head of NBC Universal, moved Mr. Leno into the 10 p.m. slot, clearing the way for Conan O’Brien at 11:30 and radically remaking prime time.

But so far the move has only produced lackluster ratings and a poor lead-in to local news, further exacerbating NBC’s problems in prime time. The move has also become emblematic of network television’s struggle to re-imagine itself at a time of declining ad revenues and online competition.

John C. Malone, the chairman of Liberty Media and a longtime media investor, sees this as a victory for Comcast.

“It does not represent a huge risk Comcast is making with its core business,” he said. “There is the opportunity to see if they can achieve synergies without betting the farm.”

Many others, however, said the deal is less about synergy than other media mergers. At least in theory, Comcast-NBC Universal will be a company separate from Comcast’s cable assets.

“This deal is not about that,” said Leo J. Hindery Jr., the former chief executive of TCI, once the nation’s largest cable company, referring to synergies. “That Chinese wall is going to be built pretty thick.”

Instead, the deal is a bet by Comcast on how it can grow its business. It could use its power in film, with Universal Studios, to expand video-on-demand offerings by altering movie release windows to make movies available on demand the same day they are released on DVD, noted Craig Moffett, an analyst at Sanford C. Bernstein.

The broad parameters of the deal between G.E. and Comcast had been in place for weeks, but the deal could not be completed until a separate negotiation between G.E. and Vivendi was completed. Vivendi, the French conglomerate, owned 20 percent of NBC Universal as a remnant of a 2003 deal in which it sold Universal Studios and the cable networks USA and Syfy to G.E.

The groundwork for the tentative deal between G.E. and Vivendi was laid out last week, when G.E.’s chief executive, Jeffrey R. Immelt, met in person with his counterpart at Vivendi, Jean-Bernard Lévy, in Paris, these people said. News of the tentative agreement with Vivendi was first reported in The Wall Street Journal.

If it holds, the pact would conclude weeks of hardball negotiations between G.E. and Vivendi over control of NBC Universal, a battle centered largely on the value of the French company’s 20 percent stake. But Vivendi took a tough stance, relying on its option of holding an initial public offering for its stake rather than selling it back to G.E.

G.E. first plunged into the media business in 1985, not because of any expertise in television programming but as a financial hedge. John F. Welch Jr. , then G.E.’s chief executive, feared the threat to the company’s industrial businesses from the rising challenge of efficient Japanese manufacturers. “I was looking for a business that would give us a place to hide,” Mr. Welch, also known as Jack, wrote in his autobiography, “Straight From the Gut.”

The appeal of RCA, he explained, was NBC with its “strong cash flow.”

Today, things look very different.

“The media business has gotten beyond G.E.’s comfort zone in terms of managing it and finding a path to creating value in the content business in the future,” said Nicholas Heymann, an analyst at Sterne, Agee & Leach, who is a former G.E. manager. “The skill set to figure all that out is not going to be found within G.E.”

The Comcast deal, analysts note, would help G.E. reduce its debt as it tries to shore up its big finance arm, which got hit by the credit crisis. Over the years, they say, G.E. has revamped its portfolio of businesses at times, and Mr. Immelt is doing that again.

“The pendulum is swinging back to the core industrial businesses,” said Noel M. Tichy, a professor at the University of Michigan business school, and a former head of G.E.’s management school in Crotonville, N.Y.