Sixteen years after Microsoft and NBC formed a joint venture called MSNBC that would bridge traditional cable TV news with the speed of online news, the companies have officially severed their pact and will go their separate ways. With this move, NBC is buying Microsoft’s 50 percent interest in MSNBC.com for an undisclosed sum, the MSNBC.com website will become NBCNews.com, and the companies will be free to pursue rival advertising and news sources, respectively.
MSNBC.com is currently the Internet’s fourth most popular news destination in the United States, with about 50 million visitors in June, up 5 percent year over year. And the service has more than 300 employees, over half of which work at Microsoft’s Redmond, Washington campus. (The remainder are in New York. ) So changing the name of the site, and its ownership, isn’t a minor move.
“While our name is changing, our commitment is not,” NBC News Editor in Chief Jennifer Sizemore writes in an explanation on the new NBCNews.com. “NBCNews.com will stay true to its mandate of delivering the news you need with the innovative spirit you’ve come to expect across all of our digital platforms.”
NBC is allegedly paying Microsoft $300 million for its share of MSNBC.com, according to anonymous sources quoted by The New York Times. But the companies haven't disclosed the amount of the payment. (Microsoft’s initial 1995 investment in MSNBC was $300 million.)
This week’s monumental change has been a long time coming. Microsoft pulled out of the cable TV part of its MSNBC venture with NBC back in 2005, triggering years of speculation about the inevitable. In the years since, Microsoft has driven almost half of MSNBC’s traffic through its MSN websites and has been the exclusive advertising platform on the site. And while the relationship has benefited both sides, there were also problems.
Because MSNBC was the sole contributor of news to MSN, Microsoft’s users felt the site had a decidedly liberal leaning and lacked the “multiple perspectives” of a more comprehensively sourced site. So with MSNBC.com now behind it, Microsoft will develop its own online news service, offering readers more diverse perspectives. That service is due later this year.
NBC, meanwhile, has wanted to offer advertisers a more cohesive package that could combine both TV and web advertising. But since it handled the TV end and Microsoft controlled web advertising, that wasn’t possible.
At Microsoft, MSNBC.com fell under the control of the Online Services division, which has been mostly unsuccessfully pushing brands such as Bing and MSN. The division has lost over $10 billion over the past seven years, and is the only part of Microsoft that doesn’t turn a profit.