16 years of MSNBC partnership draws to a close

So farewell then, MSNBC.com. After 16 years, the joint venture partners Microsoft and NBC are going to go their own way. NBC News announced over the weekend that it had acquired full control of the web news business and its digital network from Microsoft, and is immediately rebranding the site as NBCNews.com. Financial terms weren’t disclosed, although the New York Times believes that NBC is paying Microsoft $300m for its 50 per cent share.

 

NBC News President Steve Capus said the site would become part of NBC News Digital, a new division of the broadcast company:

 

“There’s nothing wrong with what’s there. There’s nothing that needs to be fixed. We were in a joint venture in the area with the biggest growth in the news and information space, and we would like to control our own future.”

 

Breaking up is hard to do, though, and it will apparently take two years for the two companies to fully disentangle their interests. For now, MSNBC.com will reflect the homepage of NBCNews.com, although eventually, it will become the web presence of cable channel MSNBC TV. NBCNews.com will continue to provide news for Microsoft's Web portal, MSN.com. Confused? No wonder this is process is going to take years.

 

MSNBC Editor-in-Chief Jennifer Sizemore sought to downplay the split in an open letter to viewers:

 

“While you’ll notice some changes to our logos and navigation, nothing’s going away. MSNBC TV will launch a new digital home in 2013, as an extension of the MSNBC TV on-air brand, creating in-depth content and a community for the passionate audiences of MSNBC programs. We’re more excited than ever for the future of digital news.”

 

On July 15, 1996 – almost 16 years ago to the day – Microsoft and the US TV network NBC announced a 50:50 joint venture to create MSNBC.com and MSNBC TV.

Both companies split the cost of a $200m newsroom in New Jersey, and Microsoft injected a reported $500m to create the strategic partnership. The combination of a major network, a new cable channel, and a companion web site was expected to be a long-term play in the newly emerging convergence space. Speaking at the time, NBC’s former president Robert Wright said:

 

“For the future of NBC, this is the most important video service we’re involved in.”

 

In 2005, Microsoft sold its 50 per cent stake in the cable TV channel to NBC but retained its 50 per cent ownership of the website. But with both ventures still carrying the name ‘MSNBC’, there was plenty of market confusion over who owned what. And with the cable TV channel adopting a democrat-leaning political stance, the whole enterprise became increasingly complicated. The New York Times reportedly saw a leaked confidential memo that warned: “naming them the same thing is brand insanity”.

 

What this separation does achieve is a chance to clean up both brands and remove viewer confusion. NBC gets complete control of its online news activities, and can go out and monetise them as it sees fit. NBC News will relocate from its current home on the Microsoft campus to a new facility in Seattle. The network also plans to create a new ‘NBC News Digital Innovation Center’ in the region, which could also be the home of its news website.

 

According to comScore, MSNBC.com and its sister sites attract 50 million unique visitors a month in its domestic US market. In contrast, the partnership between rival ABC News and internet portal Yahoo generates 81 million unique visitors a month in the US, whilst CNN generates 56 million. However, MSNBC.com is believed to be the most profitable news website in the US (there are no publicly reported revenue figures), and under the terms of the separation these profits will now all go to NBC.

 

So what’s in it for Microsoft? According to Bob Visse, general manager of MSN.com:

 

“If you start thinking about what we’re going to be doing in Windows 8 and the Bing app and what we’re going to be doing across the multiple platforms, it makes a lot of sense for Microsoft. We’re talking about using technology and using data to solve information delivery and news delivery in new and innovative ways. It’s really difficult for us to do that when we have an exclusive, single-source relationship with one news provider.”

 

Meanwhile, MSN.com has begun hiring for a new (unnamed) news operation to launch later this year.