Merrill Lynch analyst Jessica Reif Cohen raises an Emperor’s Clothes kind of point about Viacom’s digital revenue projections in her note on the company’s recent earnings report: “Management also noted that it remains confident in its ability to reach $500 million in digital revenue in 2007, suggesting that revenue could almost double. However, it remains unclear how much of this revenue is incremental, as increased digital advertising appears to be displacing advertising from their traditional networks, which are no longer showing meaningful growth.”
Also from her note: “Digital revenue increased 75 percent year over year in 4Q to roughly $85 million, with digital advertising revenue growing nearly 60 percent.”