That was a key takeway from Netflix chief financial officer David Wells Wednesday, as he addressed investors at the J.P. Morgan 40th Annual Technology, Media and Telecom Conference in Boston.

“The presence of a DVR full of Spongebob is probably more disruptive than Netflix, and that doesn’t come with Netflix revenues,” Wells said.

Also read: We’ve got hard data: Netflix really is killing Nickelodeon

Viacom-owned Nickelodeon’s once-buoyant popularity among youthful viewers has experienced inexplicably steep declines since the fourth quarter of last year. And speculation has run rampant that the channel’s streaming deal with Netflix is causing kids to choose on-demand repeats of Nickelodeon shows like Spongebob Squarepants over fresh episodes on the linear cable channel.

This theory picked up steam earlier in the month, when Sanford Bernstein senior analyst Todd Juenger released results of a robustly sampled controlled study. That data strongly indicated a correlation between Netflix viewing and ratings declines on not just Nick, but other kids platforms, including Disney Channel. (It also showed that streaming of adult series like AMC’s Mad Men had a “catch-up” affect, priming older viewers for fresh shows on the linear network.)

In both Viacom’s first and second-quarter earnings calls, CEO Philippe Dauman rejected these notions, calling Netflix’s influence over the ratings drops “minimal.” He believes the drop is more attributable to research methodology on behalf of ratings tracker Nielsen.

Also read: Why Netflix can still win

For its part, Netflix hadn’t yet publicly addressed the issue until Wednesday, when Wells compared it to the “global warming debate.”

At the same time, he conceded that it’s a discussion that Netflix doesn’t want to take too lightly — if content partners like Viacom begin to believe that over-the-top viewing of their shows is diluting their core business models, that will directly affect Netflix’s ability to negotiate for programming.

“It’s in our best interest to work with them to find the right [distribution] model,” Wells added.

Other topics he addressed Wednesday:

– Despite Netflix’s expansion into Europe, Canada and Latin America, Wells said the point at which Netflix begins to ubiquitously negotiate global rights for content is still at least three years away. “We are progressing on some of the smaller deals towards global rights, but in terms of ubiquitous global rights, that’s still a ways away,” he said.

– Discussing Netflix’s sluggish expansion into Latin America, Wells said that beyond basic challenges like limited broadband penetration in some areas, Netflix actually suffers from a lack of competition in the region. Without other companies showing local consumers that “streaming video actually works,” Netflix endures the entire burden of marketing an consumer education. “Overall, Latin America is working,” he added. “It’s growing. We’re not losing to a competitor. It’s just not growing as quickly as we expected.”

– With Netflix noticing a trend among subscribers in which numerous household members are accessing its streaming service simultaneously through multiple devices, Wells said the company will introduced a “multi-streaming” plan later this year.  ”It’ll have personalized interfaces, so when you watch, it’s directed at you and not your wife or your child,” he explained.

There’s been a lot of attention paid to Facebook’s business model recently, especially with the news that General Motors has killed a $10-million advertising campaign devoted to the giant social network — not exactly a great sign of confidence in advance of the world’s most eagerly anticipated IPO. And GM’s move is only the latest indication of discontent, as other advertisers are also questioning their spending. What all of these moves reinforce is that while Facebook may look like and function like a social network for the majority of its users, on the business side it looks almost exactly like a traditional media company, and that is both good and bad.

Like Twitter, the content within Facebook may be generated entirely by users, but the business model is all about advertising, just like any other media entity. According to the social network’s latest S-1 securities filing, advertising accounted for more than 80 percent of its $1-billion in revenue in the most recent quarter. And while some of that represents experiments with “social advertising” such as Sponsored Stories and other features, much of it is essentially run-of-the-mill banner and display advertising — not all that different from what you would find on a newspaper or magazine website, or any blog network.

In some ways, Facebook ads are actually worse than regular ads

That helps explain why Facebook’s advertising isn’t exactly setting the ad world on fire: in fact, according to at least one study, clickthrough rates for ads on the social network are actually lower than the already abysmal clickthrough rates for regular Web advertising (for what it’s worth, Ford says that it is more than happy with its spending on Facebook, unlike General Motors).

Facebook actually has an even bigger mountain to climb than newspapers or other media entities do when it comes to advertising, since the social nature of the network could actually interfere with the effectiveness of traditional ads. Sir Martin Sorrell, chairman of WPP Group, has said that he isn’t even sure advertising can work within an environment like Facebook, which is inherently about social connections and conversation. As angel investor and blogger Chris Dixon notes, ads on Facebook are like putting billboards in a park:

When people use Facebook, they are generally socializing with friends. You can put billboards all over a park, and maybe sometimes you’ll happen to convert people from non-purchasing to purchasing intents. But you end up with a cluttered park, and not very effective advertising.

As Dixon points out, what made advertising such a spectacular business for Google was that people who are searching for things are already part-way down the road toward wanting to buy something — in other words, they are further along the spectrum of “purchasing intent.” And at least the readers of newspaper websites and other media entities are theoretically interested in information about the world, current affairs, even entertainment. Many Facebook users are simply there to socialize, share photos, etc. How does that translate into a receptive environment for advertising?

Facebook needs to start diversifying its revenue sources

Facebook is also hamstrung to some extent when it comes to the options that other media companies are experimenting with, such as subscriptions or paywalls. Not only has Mark Zuckerberg promised repeatedly that Facebook would always remain free, but it’s not clear that users would pay anyway — although the network is reportedly experimenting with a new feature that would allow users to promote their posts.

Those are the downsides of Facebook as a media company. But despite incidents like the GM announcement, investors are likely to focus more on the upside, and there is arguably plenty of it: for one thing, Facebook has close to a billion active users, and even in an age where advertisers want to target specific segments or groups as much as possible, scale still matters — particularly for major brands. So a lot of advertisers are probably going to stick with Facebook simply because it is one of the biggest games in town.

Not only that, but as Jon Steinberg of BuzzFeed pointed out on Twitter, what other option do advertisers have — to go back to video pre-rolls and banner ads? If the future of advertising is social, then hitching your wagon to the largest social player in the world is probably a better bet than trying to figure it all out on your own. And there is at least the potential for Facebook to disrupt the ad market in some interesting ways, such as an “open graph”-powered ad network that could extend its reach throughout all the millions of sites that use Facebook’s platform.

As Dixon notes, Facebook also has a number of other emerging business models, such as an e-commerce platform driven by Facebook Credits. These are embryonic at best, however, and so for the moment Facebook is still overwhelmingly reliant on advertising — and as every other media company is painfully aware, that sword cuts both ways.

Post and thumbnail images courtesy of Flickr user Olaf Gradin

Operative: Manu Warikoo has been promoted to lead the company’s product strategy and R&D roadmap as chief product officer. He was previously SVP of solutions, where he worked on product strategy and services. Prior to joining Operative, Warikoo co-founded search-driven research firm FirstRain. In April, former Incentone COO Francois DeCourtivron signed on as CFO of Operative.

Rubicon Project: Former Ticketmaster CTO Brian Pike joins as CTO of the company. Former Ticketmaster Deputy General Counsel Victoria von Szeliski also joins as general counsel and former Yahoo Product Management VP joins as SVP of product management. Von Szeliski had previously served in senior positions with Obama for America and the Democratic National Committee.

Texas Tribune: Ricochet Labs Co-Founder and President Rodney Gibbs has been appointed chief innovation officer. At Ricochet, Gibbs led the development of news quiz app QRANK. Prior to that, he was founder and director of Fizz Factor Studios.

AdSafe Media: Kiril Tsemekhman has signed on as SVP and chief data officer. He previously was CTO and chief scientist at Red Aril (later acquired by iCrossing/Hearst), where he focused on audience analytics. Tsemekhman’s twin brother, Vadim Tsemekhman, recently joined AdSafe Media as senior director of product management.

GumGum: The in-image ad platform has a new sales head: Robert Elder is now SVP of sales. He joins from Independent Television Networks (ITN) where he was VP of digital sales.

Exponential Interactive: Sandy Shanman joins as GM of mobile for the digital advertising company. He’ll run  Appsnack, the new in-app advertising division. Most recently, Shanman was SVP of mobile solution sales, strategy and business development at Limelight Networks.

Over five million sites, including 230,000 e-tail stores, have been created using Moonfruit since its 2000 launch, according to the buyer.

Yell is a tortured soul. Its classical print directory business, of course, goes on losing advertisers to the internet. But even Yell’s online directories like Yell.com and Yellowbook lost 15.7 percent of their ad sales during Q4, compared with the prior year, Yell reported in February.

A turnaround plan Yell unveiled last summer charges it with building out “the first local emarketplace platform for consumers and small and medium enterprises to connect and transact locally”, including loyalty programmes, payment services and business operations.

It aims to flip its revenue make-up to be digital-led by 2015, with digital product development all funded from cash. And it sets out to simplify Yell.com on a self-service ad sales model, and to cut £100 million in costs over 2012 and 2013.

To do it, UK-based Yell has gone global and looked outside for leaadership. MSN executive producer Scott Moore became Yell Group’s chief digital officer in October, with the group opening new offices in Seattle, a month after Yell announced a new partnership with Microsoft (NSDQ: MSFT) Advertising. In January, it hired as chief strategy officer the consultant who helped it pen that strategy at Booz & Co.

Yell now hopes customers will pay to make marketing and ecommerce web stores, if not for old-fashioned rudimentary business listings, which search sites have gobbled up.

It already built 337,000 customer websites last year. But it says buying Moonfruit’s self-service platform will give it “future cost efficiencies and enhanced capability in areas such as website construction, proofing and editing”.

Moonfruit had taken $2.25 million from investment bank Stephens to go international in 2010. Now Yell will help it further realise that ambition.

Release.

The idea is to get users to spend more time on Google and also to make the search engine offer a more human-like understanding of questions and context. “This is a critical first step towards building the next generation of search, which taps into the collective intelligence of the web and understands the world a bit more like people do,” Google said in a blog post announcing the new feature.

How It Works and When it will Appear

The most immediate thing Google searchers will notice is a big block on the right site of the page. For example, users who search for Frank Lloyd Wright will see the familiar list of ten blue webpage links but will also biographical and contextual information:

Google’s Knowledge Graph also contains another key feature: it parses results to get at what users “really mean.”  For instance, it might try to anticipate whether a user searching for “long island” means the boozy drink or the place in New York. Or whether a “Taj Mahal” query refers to the temple, the singer or a local Indian restaurant.

Google shared an example of how a search for “Andromeda” might turn out. In this screenshot, the right side of the Google search page asks users if they mean the galaxy, the TV show or the Swedish rock band:

The information Google presents in its Knowledge Graph is Wikipedia-like in that it allows users to learn and discover. And like Wikipedia, it comes with an editing mechanism. If a user sees something they believe is inaccurate — perhaps Frank Lloyd Wright’s birthday is wrong — they can tap a “report a problem” button, which flags the issue.

The Knowledge Graph will be unrolled this week across Google’s English sites, including on mobile ones. Google has already been testing it on small samples of users, a practice common among big Internet companies like Facebook and Google — the early reactions give them an opportunity to fine tune the product (sharp-eyed SearchEngineWatch noticed this on Monday).

Will People Like It?

Google’s last big shake up to its search pages occurred in January with the launch of “Search Plus Your World” in which Google peppered its results with information drawn from users’ interactions on Google+, Gmail and so on.

The changes went over like a lead balloon as users balked at Google’s latest attempt to drag them on to a social network they didn’t want to be on.

Reaction to the Knowledge Graph will likely be different as the feature is both less intrusive and more useful.

“It will increase serendipity,” said Google Product Manager, Jim Menzel, adding that the tool will make searching both more efficient and more rewarding. He cited an example of a family using the tool to consider a Six Flags visit by clicking on a parade of associated images. ”What better way to decide whether to go to an amusement park than to flip through each individual ride?”

The real test, of course, will be whether the tool works as promised. In 2009, the company’s Labs division launched a product called “Google Squared” that was supposed to surface in-context information but it was defeated by even simple queries like “Mets third baseman.” Menzel suggested that Squared was just a “concept car” and Knowledge Graph is far more refined and ready for the big time.

There are also so intriguing questions about Google’s newfound editorial role. The tool is all well and good for uncontentious searches like “Frank Lloyd Wright.” But what about, say, “Palestine” or “Barack Obama Birth Certificate” or “evolution”?

The text in the examples above appears slung directly from Wikipedia, so that approach may help Google avoid at least some of the inevitable political attacks.

Google’s Strategy

Google’s move is intriguing in no small part because the new Knowledge Graph appears to be placed smack dab where the company’s ads usually appear. Recall that the right side of the page is where the company’s golden goose — also known as AdWords — usually resides. Ads also appear directly above the regular search results, however, and those won’t be impacted by the new feature.

Google’s decision to rezone this prime real estate is likely part of a larger effort to get people to spend more time on the page. Whereas in the past, the company was an “in-n-out” style service, the new feature may make Google more like Facebook where users reportedly spend an average of 18 minutes per visit.

The Knowledge Graph may also provide new advertising opportunities on the local commerce front. When it presents a variety of Wikipedia-style entries, the company can include local options too. For example, a search for “Kings” may yield the hockey team, the basketball team  – or Kings Pub down the street.

Danny Sullivan, a search industry veteran and expert on Google’s twists and turns, has his usual definitive take about the new features over at Search Engine Land.

The app, from Sesame Workshop and Publications International, is based on the bestselling book of the same title. For kids, there’s “a story with Elmo about the rewards of learning to use the toilet,” songs, stickers and a virtual rewards chart. Parents can “track their child’s potty progress” and get potty-training tips.

“Potty Time with Elmo” is $0.99 for now and will increase to $2.99 after May 29.

Elmo faces competition from other potty-training apps, but none of them are hosted by the little furry red monster.

iQ editor-in-chief Bryan Rhoads tells AdAge that iQ’s goal is to “connect with a younger audience and tell them the bigger story of who we are as a brand. Many of them don’t know, so we need to tell them the story of Intel that is beyond PCs and beyond processors.”

He goes on to say, “We have Facebook, Twitter and blogs and all of that, but they’re really not tailored to a younger audience.”

Hope you kids like a lot of stories from those old-fashioned blogs, because that’s mostly what’s here: Right now iQ’s front page is made up almost entirely of stories from The Next Web, TechCrunch, Mashable and Engadget. There’s also some original content — bloggy stories like “Gamification breaks rules in the classroom” and “5 iconic soundbites in tech.”

A bar at the top of the page highlights three original stories: “What does your biometric shirt say to you?”, “What does the average design student have in their bag?” and “Schools powered by the sun.” Each of those stories has been shared zero times.

The project is reminiscent of the “Free Press” news section that Intel launched on its site in 2010 in an effort to get tech blogs to cover Intel more often. Free Press, though seemingly little read, is still running, and says it covers “interesting behind-the-scenes stories that provide insight into what’s going on inside Intel and indirectly, the tech industry.”

To be fair, it is only iQ’s first day and it has a big goal: “iQ is here to remind us on how fast we’re moving as a global culture, to be cognizant of how far we’ve come and to reflect on where are planet is headed.” Also, to remind the youngs that Intel thinks tablets are cool, too.

• ESPN: No talks yet about Apple TV authentication (paidContent)
• GM says Facebook ads don’t pay off (WSJ)
• Judge comes down hard on publishers, Apple in e-book case (paidContent)
• Now Flipboard does audio, too (Techland)
• How Yahoo killed Flickr and lost the Internet (Gizmodo)
• Aaron Sorkin signs on as screenwriter for Steve Jobs biography (NYT/Media Decoder)
• Fab steps up social, dumps Google+ for Pinterest (GigaOM)
• Storify working with Middle Eastern initiative Taghreedat to translate site into Arabic (The Next Web)

• Fotolia is taking a $150 million investment from Kohlberg Kravis Roberts & Co.
• That announcement Wednesday appears prompted by rival Shutterstock having lodged an IPO filing to raise $115 million on Monday.

Fotolia previously took between $50 and $100 million from TA Associates, TechCrunch reported in 2009. The FT reports KKR’s investment buys it half of the firm.

“This is a market that will consolidate,” KKR’s European media investment head Philipp Freise tells the paper, adding KKR may use Fotalia as a vehicle for further acquisition.

Shutterstock, in its IPO filing, cites BCC Research as projecting the stock photography market to be worth $5.1 billion by 2013.

It made a $21.8 million profit on $120.2 million revenue from more than 550,000 active customers – that user count is 71 percent up from 2010, and Shutterstock served 58 million paid downloads.

Founded by French-born Russian Tscheltzoff, Fotolia, with a largely European executive team, is especially strong in Europe, where it last year acquired France-based Wilogo, a microstock upload sales site for logo designers.

Disclosure: paidContent uses images from Shutterstock, including the one on this page, taken by Douglas Freer.

After online sports broadcast specialist Perform Group went public a year ago, it promised it would succeed its acquisition of Goal.com by buying more sports sites.

Now it is making a big one - Perform has offered up to €120 million ($153 million) for Switzerland-based sports data provider RunningBall.

The company employs match scouts to log over 1,000 in-game events for over 30,000 soccer games annually and is also growing in to logging data for others sports.

The company’s Pushing Feed, Trader Client and Performance Video packages are provided to clients like media outlets and live betting operators.

Reasons for the deal:

• Perform wants to tie RunningBall data in to its existing sports video services, many of which it syndicates to online publishers. That includes plugging live match stats in to Goal.com, Soccerway.com, Sportal.com.au and Spox.com
• It will also start selling RunningBall data to customers of its own existing GSM sports data syndication business.
• And it wants to integrate the data in to its own Watch&Bet and Watch&Trade online sports gaming services.

Led by joint CEOs Oliver Slipper and Simon Denyer (pictured left and right), Perform is one of the most interesting businesses out there, ploughing ahead with building the foundations of a natively online sports media business that looks well placed for the digital years ahead.

The company is set to ride two waves – the connected TV boom (it wants to go to screens with its own-brand proposition) and the liberalisation of online gaming (bingo has proved huge online thanks to TV advertising being permitted, and betting is moving from high street to sofa).

The acquisition sees it go head-to-head with the big live sports data provider Opta, but add its video and editorial experience to the mix.

The stock market likes the deal. Perform shares jumped almost eight percent when the deal was announced in London Wednesday morning.

The price of up to €120 million is 9x RunningBall’s anticipated 2012 EBITDA, which was €7.2 million on revenue of €16.1 million. In other words, RunningBall’s margin is high.

Perform only raised £72.5 ($116.26) million in its London IPO float. But only €20 million of the RunningBall offer is made from available cash – €50 million comes in Perform shares given to RunningBall and Perform will take on debt to pay an extra up to €51 million in deferred payment.

Release.