Media World: Comcast's quest for NBC Universal makes perfect sense
In early 2004, Comcast Corp. (CMCSA) stunned Wall Street and Hollywood by launching an unsolicited bid for one of the titans of American entertainment -- the Walt Disney Co. (DIS). Though that effort failed, the Philadelphia-based company's thirst for content has not been quenched, which is why reports indicating that it wants a piece of General Electric Co.'s (GE) NBC Universal makes perfect sense.
Comcast, the No.1 cable company, is in a much stronger position today than it was five years ago. Despite predictions that satellite and telecom companies would eat its lunch, Comcast has held its ground. During the second quarter, revenue rose 4.5 percent to $8.55 billion while operating cash flow gained 5.5 percent to $3.35 billion. Comcast had $3.98 billion in cash and cash equivalents at the end of the period even as it fought customer defections to rival services such as Verizon's (VZ) FioS. The company's shares fell $1.17, or 6.93 percent, to $15.71 in midmorning trading. GE, which has resisted calls by investors to dump the entertainment business for years, traded down 31 cents, or 1.89 percent, to $16.20.