SAN FRANCISCO – Microsoft is pulling out of the joint venture that owned MSNBC.com, freeing the world’s largest software maker to build its own online news service.
The breakup announced late Sunday dissolves the final shreds of a 16-year marriage between Microsoft Corp. and NBC News, which is now owned by Comcast Corp. The relationship began to unwind in 2005 when Microsoft sold its stake in MSNBC’s cable TV channel to NBC.
Terms of the deal weren’t revealed. The New York Times cited unnamed people knowledgeable about the deal who said Microsoft will receive about $300 million in exchange for its 50 percent stake in the joint venture.<p>MSNBC.com has been rebranded as NBCNews.com. Anyone typing MSNBC.com into a Web browser is now being automatically redirected to NBCNews.com.
The online divorce stemmed from the two partners’ desire to gain greater control over their digital destinies as the Internet becomes an increasingly important part of their businesses.
The inherent constraints of being locked into a joint venture sometimes handcuffed Microsoft and NBC.
Microsoft, in particular, had grown frustrated by contract terms requiring it to exclusively feature MSNBC.com content on its own websites. That was exacerbated by the MSNBC cable channel’s strategy to counter Fox News Channel’s appeal to conservative viewers by tailoring its programming for an audience with a liberal viewpoint.
The strategy fed a perception that material from MSNBC’s website was politically slanted, too.
“Being limited to MSNBC.com content was problematic to us because we couldn’t have the multiple news sources and the multiple perspectives that our users were telling us that they wanted,” said Bob Visse, general manager of Microsoft’s MSN portal and a board member of the former MSNBC joint venture.
Now that it has shed those shackles, Microsoft is preparing to launch its own news service this fall. Although he declined to provide many details about the operation, Visse said the news staff will be about the same size as the roughly 100 people who created original content for the former MSNBC.com.
Even as it sets out to compete against NBC News, Microsoft will continue to highlight the top stories from its former partner for the next two years under terms of the split.
NBC News, in turn, believes it will be able to attract more traffic to its stable of websites by forging other partnerships that were off-limits when it was tied to Microsoft.<p>MSNBC.com and its affiliated sites ranked as the Internet’s fourth most popular site for general news in the U.S., with nearly 50 million visitors in June, up 5 percent from last year, according to the research firm comScore Inc.
Although its new headquarters will be based in New York, NBCNews.com will retain a significant staff in the Seattle area, said Vivian Schiller, NBC News’ chief digital officer. About 170 of MSNBC.com’s 300 employees worked in the Seattle area.