Microsoft, NBC News Dissolve MSNBC.com Joint Venture

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.

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. Photo: Ben Lakey/Flickr

The Internet partnership of Microsoft and NBC is officially over.

As reported by CNet, NBC News announced this evening that it had acquired full control of MSNBC.com from the software giant and was rebranding the site as NBCNews.com.

The breakup 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.

The announcement of the corporate divorce is expected within days, although there could always be a last-minute snag.

“We’re absolutely having those conversations, but there is no deal,” an NBC spokesman said Wednesday.

NBC will continue to provide news content to MSN.com, a Microsoft news portal, which will reciprocate by sending traffic back to the network, NBC said.

Readers who logged into MSNBC.com late Sunday were automatically redirected to NBCNews.com, according to The Huff Post.

The cable channel MSNBC was originally a joint venture between the broadcast network and Bill Gates’ company—hence the initials in the name—but the television partnership was dissolved in 2005. The companies, however, remained 50-50 partners in the website.

Financial terms of the deal, which was announced on the 16th anniversary of the site’s launch, were not revealed. People with knowledge of the transaction said that Microsoft will receive about $300 million for its stake.

The online divorce stemmed from the partners’ desire to gain greater control over their digital destinies as the Internet becomes an increasingly important part of their businesses.

NBC executives have grown frustrated at not having sole control of the MSNBC website, which does original reporting as well as aggregating content from the AP, Reuters, New York Times and elsewhere, writes The Daily Beast.

At the same time, as the MSNBC channel has forged a separate identity as the liberal home of Rachel Maddow, Chris Matthews, Ed Schultz and others, the company has worried about the brand confusion caused by its straight-news site bearing the same name. And the cable channel has lacked a site solely devoted to pushing its personalities.

“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 MSN.com.

He declined to provide many details about the operation, but said the news staff will be about the same size as the roughly 100 people who created original content for the MSNBC.com.

Under the current plan, Charlie Tillinghast, the chief executive of MSNBC.com, would continue to run the site. But he would presumably move off Microsoft’s campus, along with the roughly half of the website’s 300 employees who are also based in Redmond, Wash.

By hiring its own news staff to feed material to its websites, Microsoft is embracing the same strategy as the owners of two other major Internet companies, Yahoo Inc. and AOL Inc.

MSNBC.com is considered to be quite profitable, in part because it draws as much as half its traffic from Microsoft’s MSN network. Part of the deal calls for Microsoft to continue to steer some traffic toward the rebranded site.

“There is no question that we are going to have more flexibility to make our own decisions,” said Vivian Schiller, NBC News’ chief digital officer. “This is really an amicable breakup. We think competition will make us better.”

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