Bewkes has been trying, on and off, to swap AOL and a fistful of cash for a 20 percent stake in Yahoo, which would help CEO Jerry Yang fend off both Microsoft and Carl Icahn. Yahoo executives aren't particularly interested in having AOL's aging Internet assets dumped on them to manage — but they were eager to buy Bebo, particularly Yahoo Europe head Toby Coppel. Yahoo has a deal to sell ads on Bebo in Europe, a deal that most expect AOL to do away with after it expires. Buying Bebo serves to makes AOL more attractive to Yahoo — and if that gets AOL off Time Warner's back, then it may be $850 million well spent.

WARNER BROS. ENTERTAINMENT TO RELEASE ITS HIGH-DEFINITION DVD TITLES EXCLUSIVELY IN THE BLU-RAY DISC FORMAT BEGINNING LATER THIS YEAR Decision Made in Response to Strong Consumer Preference for Format

(January 4, 2008 - Burbank, CA) - In response to consumer demand, Warner Bros. Entertainment will release its high-definition DVD titles exclusively in the Blu-ray disc format beginning later this year, it was announced today by Barry Meyer, Chairman & CEO, Warner Bros. and Kevin Tsujihara, President, Warner Bros. Home Entertainment Group.

"Warner Bros.' move to exclusively release in the Blu-ray disc format is a strategic decision focused on the long term and the most direct way to give consumers what they want," said Meyer. "The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers."

Warner Home Video will continue to release its titles in standard DVD format and Blu-ray. After a short window following their standard DVD and Blu-ray releases, all new titles will continue to be released in HD DVD until the end of May 2008.

"Warner Bros. has produced in both high-definition formats in an effort to provide consumer choice, foster mainstream adoption and drive down hardware prices," said Jeff Bewkes, President and Chief Executive Officer, Time Warner Inc., the parent company of Warner Bros. Entertainment. "Today's decision by Warner Bros. to distribute in a single format comes at the right time and is the best decision both for consumers and Time Warner."

"A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry," said Tsujihara. "Consumers have clearly chosen Blu-ray, and we believe that recognizing this preference is the right step in making this great home entertainment experience accessible to the widest possible audience. Warner Bros. has worked very closely with the Toshiba Corporation in promoting high definition media and we have enormous respect for their efforts. We look forward to working with them on other projects in the future."

In an attempt to counter Live Nation's concert/album/merchandise bid, Warner got Barry Diller's IAC/InterActiveCorp involved. IAC owns Ticketmaster, whose ticketing deal with Live Nation expired in August. Even so, the money was too much for Madonna to refuse. Under the new deal, Madonna will collect $120 million over 10 years plus 90 percent of tour revenue.

Madonna's albums will still be distributed through normal retail channels. Live Nation doesn't have a distribution arm, so it will contract, instead, with another label. Also unusual for the industry is a term under which ownership of the three albums to be recorded will revert to Madonna after a certain period of time.

Other big groups will be watching Madonna, Nine Inch Nails and Radiohead to see how their ventures work out. The fact that players like Live Nation are getting in the business tells us that middlemen will continue to play a role in connecting musicians with listeners. It just won't be the same middlemen as before.

(AP Photo/Matt Dunham)