CNBC feels your pain...

Wild ride: Anchors Mark Haines and Erin Burnett on the 'Squawk' set on March 19.

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(Fortune) -- At 6 p.m. on the Monday evening after J.P. Morgan Chase offered $2 per share for Bear Stearns, CNBC headquarters pulsed. In two hours the news team would go live with a special documentary cobbled together that day. The script was nearly written, and someone had laid out a spread of pasta, salad, and chocolate-covered strawberries on a conference table.

With a deep layer of pancake makeup on his forehead, senior economics reporter Steve Liesman loaded his plate. He'd been on air since 5 a.m. "This is my fifth financial crisis!" he said, ticking them off as he shifted back and forth on his feet. And although investors might have been panicking, it was clear that the folks at CNBC were in their element. "My favorite part of the day was that the Dow closed up," said Liesman. "Everybody loves a big story, but nobody likes bodies."

Take the credit crunch, throw in the plummeting housing market, add an untested Fed chief and careening investment banks, and it's clear that CNBC is on to a very big story. Total viewers for the business day are up 21% year-over-year for the first quarter to date. Audiences are larger than they've been in seven years. And of course the average 310,000 viewers measured by Nielsen who tune in every day are only the people who watch from home; many others are glued to the channel at the office, on the trading floor, or at the gym.

The network has a lock on the wealthiest audience in television. The typical CNBC viewer has a net worth of $2.7 million, with an average income of $156,000, according to Monroe Mendelsohn Research. Measuring only viewers watching from home, Nielsen puts the CNBC viewer's income at $73,000, compared with an average cable viewer's income of $48,000.

Six months after Rupert Murdoch launched a business network set to take out the peacock with the same tenacity that Fox News tromped CNN, quite the opposite has happened: CNBC has instead emerged stronger from the competition. Fox Business Network (FBN) declined to make any executives available to interview for this story, but at a recent media conference, while talking about increasing distribution for the channel, Murdoch said, "We've got to get to 60 million homes, and then Roger can really blast CNBC." He was speaking of Roger Ailes, the swaggering TV exec who ran CNBC for six years before decamping to News Corp. to launch Fox News, then FBN.

"You never pull the trigger until you know that you can win," Ailes told attendees at a New York media breakfast in 2005. His charges were equally cocky. On FBN's first day on the air, stocks editor Liz MacDonald reported live from the side of a highway in Englewood Cliffs, N.J. - just across from CNBC headquarters. If you tuned in, you couldn't have missed the sarcasm in her voice as she referred to Jersey as "sleepy" and "bucolic," saying, "It's hunting season, and we hear that peacocks are in season."

Chances are, however, you did miss it. So far, fewer than 10,000 viewers tune in to FBN on an average day. Meanwhile, at CNBC, broadcast veteran Mark Hoffman has added edge and emotion to a network that was heavily criticized in the run-up to the tech bust for its rah-rah business take on the news. Hoffman was in fact the news director there before leaving to run a local NBC station. When he returned as president in 2005, ratings had hit their lowest level since the channel launched in 1989, and primetime was given over to reruns of the Conan O'Brien Show, as well as fare like tennis pro John McEnroe's talk show, which sometimes earned a Nielsen rating of 0.0.

Hoffman, who came up with a four-part mantra for the channel - fast, accurate, actionable, unbiased - began his CNBC tenure wandering the newsroom floor, checking in with reporters directly. "Mark is remarkable because he says, 'Tell me what you need.' And we get it," says Jim Cramer of Mad Money.

Hoffman describes CNBC's formula for investotainment this way: "We're always looking for qualitative combat on the air. Most of these conversations live somewhere between fear on one end and greed on the other. One person wants to unload something, and another person wants to pick it up." His boss Jeff Zucker, in charge of NBC Universal, credits him with changing both the management team behind the scenes and the on-air look of the network.

Profits have increased 36% to $333 million since Hoffman joined, according to media research firm SNL Kagan, making CNBC the second most profitable of NBCU's 13 cable channels, after USA Network. Says Jeff Immelt, CEO of CNBC's parent, GE (GE, Fortune 500), "The business model of CNBC is what we'd like to see play out across NBCU."

But if 2007 has showcased Hoffman's success, 2008 will test him all over again. Like everyone in the cable business, he is under constant pressure to build a business online that will outlive traditional TV, and few think Ailes and Murdoch will rest until they nail a winning formula at FBN. Then there's the stock market. Volatility paired with optimism benefits CNBC because people want to know what to do with their investments. But after the tech crash, CNBC's viewership plummeted. After all, if you know the news is going to be terrible, why turn on the TV?

Susan Krakower sits, stands, perches, then paces the length of her windowless office. A crease deepens down the center of her forehead. In two hours "Fast Money" airs, and something's not right. The show she created isn't moving fast enough in its second segment, and that's a problem. "I want the trades - get right to it!" she explains. Tonight she's trying something new. It's a quick interlude she dreamed up the previous morning after watching her 7-year-old son's favorite TV programs, Nickelodeon's "iCarly and Drake and Josh," which rely on graphics to move the narrative. When the show airs, she'll head downstairs to the control room to swap a new, 15-second sound and visual effect in place of a riff by host Dylan Ratigan.

How will she know if it works?

"The data tells me that 'Fast Money' is up 91% [in total viewers from first quarter 2007 to first quarter 2008], but that's data," she says, her eyes swelling. "I know because it's in here." She brings her index finger to her chest. Krakower developed her gut for emotionally charged TV over a career where she headed up reality programming at Universal, working on documentaries and at one point overseeing "The Jerry Springer Show," "Sally Jessy Raphael," and "The Maury Povich Show." She obsesses over shows like Showtime's "Californication" and HBO's In "Treatment."

Says Krakower: "I like to say that here at CNBC we're in treatment, because you have to have that kind of dialogue -- that serious dialogue about truth and about what things mean -- when we create a program." She believes she can capture that emotion when programming for investors about money. "The market has a pulse and an emotion. You see it move," she says. "It's real."

Under her direction, CNBC has created a block of investor-focused primetime television to fill the airwaves long after the closing bell. She helped Madison Avenue's original adman Donny Deutsch tap into viewers' desire to become a millionaire.

She plucked Jim Cramer from his talking-heads political show and together they created a Pee-wee Herman-esque playhouse in which the moneyman could rant and rave and flap his arms about investment opportunities (his calls are sometimes right on, sometimes way off). And along with Dylan Ratigan, she launched "Fast Money," where he and a quartet of traders provide a sportscast-like recap of the day's markets. She has a knack for helping talented people find a way to express themselves, and with her support, CNBC's personalities have become stars in their own right (Donny Deutsch, in fact, just turned down an invitation to compete on Dancing With the Stars).

The buzz helps CNBC's brand, and it also drives ad dollars, which were up 17% in 2007 to $211 million, according to SNL Kagan. But this year may well be rockier: The largest subset of CNBC's advertisers is financial services companies, many of which have been hit by the credit crunch. Still, Rino Scanzoni, the chief investment officer for GroupM, the media-buying arm of WPP, says CNBC is virtually the only TV option right now for some clients. "The ratings are clearly not as strong as some of the broader entertainment networks," he says, "but you are dealing with a pure play in terms of an audience."

Although it is important to get primetime right (and admittedly the biggest audience draw is "Deal or No Deal," an NBC game show that is broadcast on Saturday nights), the core of CNBC's brand has always been its business-day programming, which attracts the wealthy C-suiters for whom advertisers pay dearly. They want to be watching when Warren Buffett announces that his bond reinsurance plan is off the table or when Treasury Secretary Hank Paulson discusses the Fed's intervention in the markets.

Wrangling those newsbreakers falls to Jonathan Wald, who runs business news. Wald, whose father was president of NBC News, got his first gig as a desk assistant there in 1983. Assignment No. 1: help Tom Brokaw carry his luggage. Wald rose to produce NBC Nightly News and then the "Today" show before he landed at CNBC. You get the sense that while he's talking to you, he's mapping out six angles for your conversation in his head. And he's always on the clock.

Well after midnight on the Sunday night that J.P. Morgan Chase made its offer for Bear Stearns, Wald paced his kitchen in socks, calling in his reporting team for an early start to "Squawk Box" at 5 a.m. instead of 6 a.m. And on Easter morning, he sent me an e-mail at 11:04 a.m.: "Hope you saw Maria [Bartiromo] and Erin [Burnett] on 'Meet the Press' today."

Under Wald's direction, CNBC has shaken off some of the criticism for soft reporting. For one thing, Wald has overseen a growing documentary program that has produced award-winning specials on companies like Nike (NKE, Fortune 500) and people like Alan Greenspan. He sent Burnett to Dubai for a special report, and in mid-April Bartiromo will travel to Qatar.

Notably, and with encouragement from Hoffman, he has increased the number of guests who appear daily from 40 to 110. And perhaps stealing a page from Fox News' playbook, he has also fostered a more combative on-air atmosphere, which has at times been over the top. After Eliot Spitzer stepped down, personalities Charlie Gasparino and Dennis Kneale sparred, with Kneale criticizing Gasparino's reporting abilities, and Gasparino mocking Kneale, asking, "You're not Client No. 1, are you?" -- a reference to Spitzer's tryst with a prostitute.

Kneale erupted, demanding an apology. The two bickered on air for a full minute to the discomfort of their colleagues before the network broke to commercials.

However weak Fox's - ratings are now, Immelt hasn't written it off. It's a "tough competitor," observes Immelt. "They'll continue to get better, and we have to get better as well." Ailes, who has been uncharacteristically quiet of late, has tried to differentiate FBN both by playing to a more populist audience - more 401(k) than ETF -- and by saying FBN will be more business friendly than CNBC.

But so far much of the programming feels like a cross between Bartiromo's "Closing Bell" and "Oprah." Just read "The Glick Report," a blog kept by "Money for Breakfast" co-host Alexis Glick, a veteran of both Goldman Sachs and Morgan Stanley. Her posts include thoughts on gold futures, questions about the Fed's next move, her horoscope (she's a Leo), and photos of her three little boys. Her musings perfectly capture the spirit of the network. "Are things that bad?" she asks. "Don't we have an economy that is almost fully employed? ... Aren't we discovering new drugs and cures to cancer?"

But FBN has also had some significant programming wins. On Martin Luther King Day the network aired live as the international markets melted down; CNBC stuck to its policy of airing taped programming when the U.S. markets close. And on Good Friday, FBN had live coverage when Standard & Poor's released a ratings cut of Goldman Sachs (GS, Fortune 500) and Lehman (LEH, Fortune 500). Again, CNBC wasn't live.

Though Fox has taken several public jabs at CNBC - such as a recent New York Times ad lampooning Cramer's advice not to move money from Bear Stearns - the most important clashes have been about talent. FBN hired six CNBC staffers last fall, and, insiders say, other CNBC employees were able to use job offers to negotiate higher salaries and move from freelance to full-time positions.

Hoffman has been aggressive about locking up contracts: In November he signed Cramer for five more years. Bartiromo's contract is up in March 2009, and she may be courted by Ailes, who first put her on the air at CNBC.

Perhaps most maddening for press-hungry pundits, CNBC maintains with few exceptions a policy that no interviewee can appear on another network before a CNBC appearance. And bookers are not above sending guests the occasional threatening e-mail. "So?" says Wald, leaning his chair all the way back and locking eyes with me. "Why would you go on a channel that doesn't have wide distribution to begin with?"

As Wald well knows, distribution is where this battle is headed. Right now CNBC reaches 95 million U.S. homes. That's a sizable lead over FBN, which reaches about 35 million (and remember, viewership is minuscule). But in a survey of 130 operators released in January by independent researcher Beta Research, FBN ranked second among the channels they most hoped to add.

When it comes to that other all-important distribution channel - the Web - neither network is a top player. FBN, helped by business searching on the Fox News Web site, ranks No. 23 out of all business sites; CNBC is No. 21. In December 2006, Hoffman launched CNBC Plus, a subscription service that runs live CNBC programming from Asia, Europe, and America, but so far it has been underwhelming. Some 15,000 people have signed up to pay $9.95 a month, or $99 for a year, and the viewing experience is trippy - every few minutes when the cable network switches to commercials, the CNBC Plus product flashes a silent screen of a blue peacock.

For now, though, distribution battles, Web strategies, and Murdoch's plans all take a back seat to covering the current crisis. Back in the studio in late March at the taping of Fast Money, Ratigan and his band of traders let it fly. In the control room, images flash across 64 screens on the wall. A producer prods the host to "get to the trades!" After all, CNBC's viewers have made -- and lost - millions today. Some have 401(k)s that tanked, others may soon be out of a job. Still others are betting that, with the right outlook, there's plenty of money to be made in this market.

The set buzzes with emotion: greed and loss, drama, and most important, hope. And as long as there aren't too many bodies, as Liesman likes to say, that's exactly where CNBC