* Pay-TV target to be reached in next five yrs
* No interest for Internet acquisitions
* Endemol stake strategy won't be decided in a hurry (Adds details, recasts)
By Danilo Masoni
MILAN, May 29 (Reuters) - Mediaset SpA, Italy's biggest private broadcaster, wants to boost its pay-TV market share to 15 percent share in five years, challenging the dominance of satellite rival Sky Italia, a unit of News Corp, its chief financial officer said on Friday.
Like other commercial free-to-air broadcasters, Mediaset has been heavily hit by the economic downturn because it relies on advertising spending. Expanding in fast-growing pay-TV for it means gaining access to stable revenue flow.
"The objective is to arrive to 15 percent (from 2-3 percent in 2008). When we started Sky Italia was at 100 percent," Chief Financial Officer Marco Giordani said at a meeting with foreign reporters.
"The follower has to grow more than the incumbent otherwise it won't be able to reach a satisfying market share," he said.
Mediaset, which dominates free broadcasting along with state-owned RAI, saw its net profit halved to 60 million euros ($84 million) in the first quarter. It has predicted a lower 2009 net and operating result than a year earlier.
Giordani said Mediaset, owned by Prime Minister Silvio Berlusconi, would continue to focus on "product quality". He reiterated it had enough financial strength to allow it to look at possible acquisitions outside Italy.
SPAIN CONSOLIDATION?
On a possible consolidation in Spain, where Mediaset owns broadcaster Telecinco, he reiterated that no acquisition talks were ongoing.
At this stage, "everybody is talking to everybody else", he said. Spain's TV broadcasting market is fragmented and the country is examining change to its media regulations.
Giordani also said Mediaset was not interested in Internet acquisitions, but was looking for commercial deals.
"The Internet world has not come up with business models of such success for them to be (acquisition) targets for us," he said.
He said Mediaset was no longer in talks with Italy's Dmail Group SpA, with which it had "very preliminary" talks 18 months ago.
Asked about Mediaset's stake in TV production company Endemol, he said: "We are in no hurry to decide ... in two to five years we could choose to sell, buy from our partners or stay as we are."
Giordani reiterated that Italian advertising revenue would show a slight improvement in the second quarter from the 13 percent fall in the first one. He said there would be a "substantial improvement" in the second half of the year.
Mediaset shares were down 1.4 percent at 4.197 euros at 1314 GMT, underperforming a 0.1 percent gain in the DJ Stoxx index of media companies. (Reporting by Danilo Masoni; Editing by David Holmes and Rupert Winchester) ($1=.7146 Euro)