For NBC Universal (NYSE: GE), the analog buck and the digital dime both stop at the desk of Jeff Zucker. From that desk on the 52nd floor of 30 Rock, the NBCU CEO can see a wall full of flat-screen monitors, an expansive view of Manhattan and, on a Tuesday in June, a vase of hot pink peonies in full bloom. The digital future? That’s another story.

If 2009 stays on track, Zucker says the company will make more than $1 billion from all of its digital assets (including mobile, VOD, DVD sales, etc.); based on 2008 revenues, that would be a little more than 6 percent. He won’t get more detailed than that, but, based on other conversations I’ve had within the company, if you zeroed in on how much NBCU makes directly from selling online advertising, it probably would be half that. It needs to be much more if it’s going to come close to replacing the money leaking away from TV because of digital and other shifts in the marketplace. At the same time, NBCU has invested heavily in digital, in waves that date as far back as ill-fated Snap.com and include the acquisition of iVillage in 2006 for $600 million.

Zucker sat down with paidContent for a lengthy conversation about NBCU’s digital strategy. In the first of two installments of edited excerpts, he talks about NBCU’s search for that strategy, the results of his decision to take an iTunes time out, his take on iVillage and NBCU’s future acquisition plans, and whether or not digital can be profitable for the GE unit. Part II: Jeff Zucker: Live Streaming Top Events Devalues Olympics

Staci D. Kramer: What was that moment when you said this—the internet—is something that’s going to change the way our industry is?
Jeff Zucker:  It was probably when Lazy Sunday exploded on YouTube because I think that was the real recognition that we as a company were not properly set up to exploit something like that and yet the demand for it was intense.
NBC had done a lot of things digitally before that but it seemed over the years that as many different strategies as people tried, NBC never nailed it.
Don’t forget. NBC had Snap. Had we not given up on Snap, the fate of the company might have been unbelievably different.
How so?
Who’s to say that Snap wasn’t Google?
I’m sure there are people over at Disney  who wonder if Go was Google.
Snap was way ahead of its time.

Was the plug pulled too soon?
Obviously, in retrospect, yes but that’s unfair to say. It was just really ahead of its time.
In the last few years, NBC has changed digital strategies several times.
We’ve been searching for the right digital strategy. I think that we feel much better today about what that digital strategy is than we ever have.
What makes you feel that way?
I think we’ve honed in on what we want to do. Our digital strategy is to make our content as available as possible on any platform and to grow it organically rather than by acquisition and to center it around the entertainment side and be as strong on the news and information side as anyone in the business through all of our outlets

You’ve been through the acquisition phase (and you say you’re done with that). Is that a reflection of what you’ve acquired and what’s worked for you or is it a reflection of—
I think it’s more a reflection of where the space is today. It’s incredibly expensive for anything of real scale and most other things are probably not worth it. For us, on the digital side, if we were going to spend money, it would enhance our ability where we are and what we have. I think that figuring out how to best monetize what we have today is really one of the major goals of the next year.
Was iVillage the right thing to do?
I think iVillage is a great asset that we probably paid too much money for. ... I’m glad we have it. It’s an important part of our whole Women@NBCU strategy.
You said (when NBCU bought iVillage) that you hoped it wasn’t going to be purely for promotional value, but for original content and programming. Has it evolved the way you wanted it to? It’s gone through so many iterations and the public perception is this was a failure but internally I know a lot of people fight that very hard.
I don’t view it as a failure at all. Its raison d’etre has changed over the time it’s been here and now is really a key part of our whole Women@NBCU strategy, which I think is incredibly differentiating in the marketplace and incredibly strong and powerful for us. … It’s like having the flagship store in the mall for women and what we’ve tried to do with women an NBCU is put a lot of great boutiques around that mall with Bravo, Oxygen, Today Show, Biggest Loser, and our ability to reach women on a horizontal basis, rather than just on a vertical sale, but across all of our properties—cable, online, broadcast, entertainment, news—really distinguishes us in the marketplace and gives us an advantage. The way people are buying media today is not the way it was five years ago and targeted demographic buying is clearly the future so our ability to reach women like that across many different platforms gives us a leg up.
How is the women idea working in this upfront? This is the first real upfront for it, right?
It’s an additional enterprise sell that some of our clients want at this point and some don’t, which is fine because we want to be able to provide opportunities for what our clients want, not to sell them what we want. It’s there all year round, not just for the upfront selling period.
Are you involved in the Peacock (Equity Fund) investments?
Yes. The idea behind the Peacock fund is we’re going to take a lot of bets there. They’re not all going to work out. Certainly the return on those investments has been quite good thus far but it’s not about each individual one working. It’s about taking some bets. Some of them are going to be more integral to some of our larger company initiatives like Women@NBCU and some are going to stand on their own.
One of the things NBCU and other media companies have been doing over the past few years is making investments in companies whose technology they use or are strongly interested in using. What’s the advantage of doing that versus acquiring the company?
You don’t have to make the entire cash investment and secondly, you can take a calculated risk in the investment, third, I think when you’re in this space there are no sure things right now. You can spread your risk.
Today’s hot new technology may not be tomorrow’s reality.
I think we’ve seen that, right? Clearly, the world changes faster today than at any point previously so what’s hot today is a cold dish tomorrow.
Is there anything you wish you’d been in on sooner in digital these last two years?
Two things that I wish we were further along in are social networking and ad monetization on the digital side.
What about social networking? You’ve tried different things. You’ve had the producers come and live communicate during premiere week, all kinds of expansive efforts.
We’re still experimenting. We just did a huge thing with the finale of the Real Housewives of New York on Bravo, where we learned a lot, and we’re going to continue to experiment with that kind of thing. It’s very much in vogue and I don’t know that any of the legacy media companies are where they should be in that respect.
The idea of creating community around passion for shows can backfire when people don’t like a programming decision … How much did the social networking have to do with (bringing back) Chuck? And how much with finding a good price with the producers
There’s a lot of factors that went into the Chuck decision but certainly there’s a very strong community of support for Chuck, which is a great factor.

You took a strong stance with iTunes over variable pricing. Has that paid off for NBCU?

Yes, it has because over 50 percent of purchases are HD when available, which is at a $1 premium, and it was critical to set a precedent that gives content owners flexibility on wholesale pricing and packaging, which interestingly was a precursor to Apple (NSDQ: AAPL) agreeing to flexible pricing on music.
Do you have a goal of what percentage (revenues) you want digital to be? You’ve talked about cable being 60 percent of NBC’s revenues.

We will do over $1 billion in digital revenues in ‘09 and expect that will continue to grow in the double-digits over the coming years. It’s the fastest growing part of the business; while still young, we expect it to scale over the coming years.

Can you profit on digital?
Yes.
But if digital had to pay the cost for everything it’s using?
That’s the thing. On a standalone basis would it be profitable? We’d have to really look at that. Digital is profitable for us today but if it were a standalone business that wasn’t built on the back of the rest of the infrastructure that’s already in place, I don’t know that it would be profitable.