Shares in merging Time Warner and America Online went into a tailspin Tuesday, with AOL falling 17 percent to $43.60, a 52-week low, and Time Warner diving 16 percent to $65.56. Analysts now figure that their merger is worth $115 billion compared to $173 billion when it was first announced last January. A widely forecast decline in Internet advertising was blamed for the sell-off, but several analysts called it an overreaction. Both companies are due to issue quarterly earnings reports today -- with AOL expected to post sharply higher earnings and Time Warner expected to report lower profits, primarily because of increased interest and tax expenses.

MPAA chief Jack Valenti has defended the motion picture rating board's decision to rate the critically praised Billy Elliot R instead of PG-13. Valenti told the online entertainment magazine Inside: "Thirty to 40 times, the f-word is used in that (film). Thirty to 40 times! We folks who live in Washington, New York and California think everybody talks like we do. (But) I get more letters about language than I do about violence." (Much of the film was shot in Durham, England.) But Universal marketing chief Mark Schmuger disagreed. "It's such a wonderful, inspirational story for teenagers to be exposed to and unfortunately, this one-size-fits-all rating... ends up creating some restrictions for us, " he told Inside, adding that the studio is considering advertising the film before 9:00 p.m. on TV and targeting shows with a teen audience.

New York-based Jupiter Research has criticized filmmakers' use of the Internet, noting that Web surfers' interest in movie sites has been declining as the novelty of streaming video fades. Presenting short films online has limited potential, Jupiter concluded, because watching the often jerky, fuzzy pictures inherent in streaming presentations is not satisfying. Among its recommendations: that such Web sites become more of a b-to-b operation, showcasing the work of promising talent directly to studio executives.

Low-cost digital cameras are increasingly being used in filmmaking to cut costs, CNN's Showbiz Today observed Tuesday. Director Spike Lee told the cable magazine show that he shot his latest film, Bamboozled, with a $1, 200 Sony VX-1000 digital camcorder, which allowed him to make faster set-ups than would have been the case if he had used studio equipment. "We did not have a lot of money to shoot this film, so we really needed to move, " he said. Director Jon Shear noted that he shot his film Urbania on 16mm film, then transferred it to digital for post-production. Other films employing consumer video cameras for all or part of the production include the Coen Brothers' O Brother, Where Art Thou? and Lars Von Trier's award-winning Dancer in the Dark.

Indian films are enjoying huge popularity in Germany, the Times of India reported today, noting that "Bollywood" videos are being snatched up not only by the country's growing population of Indians, Pakistanis, Afghans, Bangladeshis and Sri Lankans, but by an increasing number of Germans. The newspaper noted that the Indian film Hum Dil De Chuke Sanam (1999) packed houses at the recent Berlin International Film Festival and subsequently received rave reviews. German critic Dorothee Wenner told the newspaper: "The film was a refreshing change for many Germans who are getting tired of Hollywood movies with their excesses of violence and sex. It was also interesting for a German to see a film depicting a different cultural background."

NOTE: Carolyn Grantham, editor of American Movie Classics Magazine, has informed us that Billy Elliot star Jamie Bell does not attend school in Durham, England as we reported Tuesday. She writes that he attends Northfield Comprehensive in Billingham, Cleveland (county), England.

It seemed pretty much like old times on the weekly Nielsen ratings list Tuesday as NBC's Thursday lineup again took over the top four positions. E.R. returned to the top spot again, followed by two new episodes of Friends and a new episode of Will & Grace (airing in Frasier's former spot at 9:00 p.m.). Nevertheless, while those shows gave NBC the lead in the 18-49 demo, the network placed third in the overall numbers. ABC once again attracted the most viewers for the week, scoring with Monday Night Football and four episodes of Who Wants to Be a Millionaire. While the number of viewers who tuned in for individual broadcasts of Millionaire has dropped, ABC's decision to up the number of episodes from three to four has offset the decline. Bloomberg News Tuesday quoted Bill Carroll, director of programming for consulting group Katz-TV, as saying: "ABC has to be encouraged that the show is holding up against the competition." ABC garnered a 10.0 rating and a 16 share for the week, followed by CBS with a 9.0/15. NBC finished third with an 8.8/14, while Fox placed fourth with a 6.2/10.

The top ten shows of the week according to Nielsen Research: 1. E.R., NBC, 19.2/30; 2. Friends, NBC, 18.0/28; 3. Friends, NBC, 16.6/27; 4. Will & Grace, NBC, 15.8/23; 5. NFL Monday Night Football: Tampa Bay vs. Minnesota, ABC, 14.9/25; 6. Who Wants to Be a Millionaire (Tuesday), ABC, 14.5/23; 7. Millionaire (Wednesday), ABC, 13.9/22; 8. Everybody Loves Raymond, CBS, 13.7/20; 9. Millionaire (Sunday), ABC, 13.5/20; 10. Just Shoot Me, NBC, 13.3/20.

Monday night's Tennessee Titans vs. Jacksonville Jaguars football game produced only a 10.6/18 rating -- the second lowest ratings for Monday Night Football ever. The game faced competition from the deciding game of the National League playoffs, but that game, too, produced disappointing numbers, earning only a 6.3/10.

Rupert Murdoch told a News Corp shareholders meeting in Australia today (Wednesday) that while his Fox Entertainment Group has had "a great start" in its current fiscal year and "an extremely good October, " he is concerned about the immediate future. Murdoch said that he was particularly concerned about the company's TV operations. "I have to say the immediate future for ours and our competitors' looks a little uncertain, " Murdoch said. He added: "There are signs of weakness in the next couple of months." The News Corp chairman also skirted a question about his planned timing for a public offering of Sky Global Network, the company's satellite TV operations. "I'm not prepared to give you an exact date. We're in negotiations with potential strategic partners and we hope to have a very successful float of that in the near future, " he said. Analysts suggested that given current market conditions, the Sky Global IPO may be a long way off. Shares in News Corp dropped 5 percent on the Australian stock exchange following Murdoch's remarks.

Speculation that Vivendi would back Barry Diller's long-held ambition to buy NBC mounted Tuesday as Vivendi Chairman Jean-Marie Messier told a New York news conference, "We will strongly support the strategic moves of Barry Diller." Upon completion of its merger with Seagram, Vivendi will own about 45 percent of Diller's entertainment holdings, including the USA Networks, the Home Shopping Network and Ticketmaster.

A federal judge in Miami indicated Tuesday that he will soon rule on a suit filed by the Center for Independent Living charging that Who Wants to Be a Millionaire violates the Americans With Disabilities Act by not making provisions to allow the deaf and hearing impaired to qualify as contestants. The group charges that Millionaire producers, by requiring would-be contestants to phone a toll-free number and punch in answers to test questions using a telephone keypad, are practicing de facto discrimination against the hearing impaired.

Carol Marin may be negotiating an exit from WBBM, where her "no frills" late-night newscast has received critical praise but low ratings, Chicago Sun-Times columnist Robert Feder reported today (Wednesday), citing industry rumors. Feder also said that station executives have been meeting with Asha Blake, a former co-host of NBC's Later Today, to replace Marin.

Michael Richards appears to be less than aggressive in fending off the bad buzz surrounding his sitcom, The Michael Richards Show, which debuts next week on NBC. "I think I'm doing a decent show here. We'll see how it goes. But I can take it on the chin, " he told today's (Wednesday) New York Daily News. In the same article, Richards appeared to be bracing for just such a blow. "My biggest concern is that I may not be given the time to develop the show because expectations are so high, " he told the newspaper. "The critics will be merciless. They'll expect it to be the 130th episode of Seinfeld."