Comcast to Sell Local Ads for Verizon Fios in 10 Markets

Cable Giant, Telecom Partner for Ad Sales but Compete for Subscribers

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NEW YORK ( -- Comcast may be feeling the pinch from Verizon Fios as the telco starts to grab share of subscribers in key markets. But when it comes to local ad sales, the nation's top cable operator is happy to share the wealth.

Verizon Fios has agreed to let Comcast Spotlight, the ad-sales division of Comcast Corp., handle ad sales in 10 of its markets, including Boston, Philadelphia and Washington. The partnership will includes local advertising on more than 50 ad-supported cable networks.

"Even as we and Verizon compete in other areas of our businesses, we both recognize the value of being partners in the advertising business and the importance of streamlining the way advertisers buy spot cable," Steve Burke, chief operating officer of Comcast Corp., said in a statement.

The five-and-a-half year pact with Fios is the latest in a series of ad sales deals Comcast Spotlight has inked this year, following agreements with satellite TV companies Dish Network and DirecTV to handle local ad sales for Comcast's regional sports networks in certain networks.

Verizon Fios, the fiber-optic-service network that promised to upend the cable world, has been on a growth kick for the last several quarters, increasing its subscriber total by 84% year-over-year in the first quarter to 2.217 million TV customers. Comcast, by comparison, saw its basic-cable subscriptions slip 2% while digital-video subscriptions grew 8% in the same quarter, totaling more than 41 million customers.

President Charlie Thurston said he considers Comcast Spotlight to be a "huge ad network" on a market-by-market basis, with Verizon helping expand Comcast Spotlight's footprint of 24 million Comcast-owned households and 6 million affiliate households by an additional 1 million homes. "Advertisers have wanted to be to able to continue to get one-stop coverage in the marketplace, and this deal with Verizon addresses what advertisers have been clamoring for."

Richard Williams, Verizon's executive director-ad sales, added in a statement, "We want to make doing business with Verizon easy for advertisers, and this helps us achieve that objective."

Having more scale with the Verizon deal could help boost ad dollars for Comcast Spotlight, which saw steep declines in first-quarter 2009, dropping 25% year-over-year to $262 million. Mr. Thurston said Spotlight has focused on marrying local TV deals with internet video on, training 1,800 of the group's 3,200 employees to sell across both platforms.

"Even though the advertising environment's been difficult over the last year, and certainly the spot TV and spot cable markets have been impacted, we believe all these positive moves in partnering with other distributors and rolling out new interactive and internet products are ultimately going to help us boost our share in the marketplace and solidify those long-term relationships with advertisers," Mr. Thurston said.

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