Microsoft, NBC end JV is MSNBC, NBC buys majority stake |
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Sun, 25 Dec 2005 01:05
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NEW YORK: Microsoft Corporation and NBC Universal have ended their joint venture partnership, MSNBC, a pure-play news channel, with the latter acquiring 82 per cent stake in the company.
NBC will have an option to buy the remaining stake in the venture after two years, during which period, the two companies will jointly run the channel's popular news-related website, MSNBC.com. The news channel operations will be the sole responsibility of NBC.
The financial terms of the deal were not immediately made known. MSNBC, established in 1996, has been at the No 3 position among the all-news cable channels, behind Fox News and CNN. Microsoft and NBC had agreed on a 99-year partnership, and Microsoft had advanced a reported $500 million for a 50 per cent stake and committed to pay NBC about $30 million a year in license fees.
The deal marks the exit of Microsoft from traditional media operations. It had earlier sold Slate, an opinion journal, to the Washington Post and divested its 23.6 per cent holding in Telewest in 2003.
NBC is co-owned by General Electric Company with 80 percent holding and Vivendi Universal with the balance stake. It has a string of news and entertainment networks and a motion picture company and runs television stations and theme parks.
President of NBC News Steve Capus said the controlling stake will allow the company to fully integrate the channel into its news operations and its overall cable platform.
MSNBC.com is one of the top Internet news sites and internet tracking firm Nielsen had said it has some 24 million unique viewers per month.
The news channel had been a sour spot on the relations between NBC and Microsoft, especially the financial arrangement envisaged at the time of its establishment. Microsoft had contended that it has been paying a higher licence fee.
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