Bill O'Reilly spent the first quarter of his show tonight going on the offense against CNN, NBC and the media watchdog group Media Matters. "CNN has lost all credibility with me and this network, and it's just a shame. We knew that MSNBC were a bunch of smear merchants. We didn't expect this from CNN."

O'Reilly says "Media Matters distorted" a portion of his radio program from last Wednesday "and implied I was racist for condemning racism." O'Reilly says "CNN echoed the defamation on at least three of its programs." Then he hit CNN where it hurts: "the reason CNN did this, is because CNN's ratings are abysmal. It is getting hammered by Fox News, so they're desperate for attention."

Fox News contributor Juan Williams joined O'Reilly saying he is "appalled" by CNN's coverage calling it "dishonest."

And just when O'Reilly was wrapping up his discussion on FNC, Rick Sanchez was just getting started on CNN. O'Reilly had phoned Sanchez last night (Sanchez actually described it as "screamed at the top of his lungs") before their competing 8pmET shows telling him "there was no racial intent in what I said." Sanchez went ahead with the report last night.

And so tonight, Sanchez picked up where he left off. Calling O'Reilly "a powerful media star who reaches millions daily," Sanchez moderated a debate between two African Americans who have different views on the issue. One told Sanchez that what O'Reilly said "was ignorant, insulting and inappropriate." The other defended him saying, "Bill O'Reilly was taken out of context."

And the discussion will continue: Sanchez said his program, Out in the Open, would be talking about the issue again tomorrow night. Meanwhile, back on Fox, O'Reilly is going to be speaking with the Rev. Al Sharpton, his lunch guest at Sylvia's. It was a radio re-telling of that lunch meeting that touched of this divide over race.