As GE prepares to dump NBC, is what remains the right bet?

In July 2007, I joined a group of journalists at the General Electric (GE) offices in Rockefeller Center to ask CFO Keith Sherin some questions. At the end of the meeting, a few executives took me aside and asked me what I thought GE should do to boost the company's perception among investors. I told them they ought to prune the portfolio and focus on growing industries where GE had a competitive advantage.

GE is certainly taking steps to prune the portfolio. Of course, investors have been pushing GE to dump NBC and lighten up on financial services for years. Unfortunately, GE is not getting top dollar for NBC, since its ratings have fallen off dramatically since the 1990s when it enjoyed top ranking thanks to Seinfeld and Friends. I estimated in 2007 that NBC was worth between $40 billion and $45 billion. Based on the $5.8 billion GE will pay for Vivendi's 20% stake, NBC Universal is now worth about $29 billion.