The TV spots first tout the NBCi site followed by messages imploring viewers to go to NBCi to see three-to-five minute clips of NBC's new fall series-including "Emeril," "Scrubs," "Inside Schwartz," and "Law & Order: Criminal Intent."
Why is this happening? Because the deal officially closing NBCi by NBC hasn't been finalized yet. NBC agreed to buy out all the outstanding shares in NBCi it didn't own this past April-some 61.4% of the company-to officially close the company. It was then that it immediately laid off almost all 350 NBCi staffers-virtually stopping the company's operations. But the deal hasn't been completed-though it should be finalized in coming weeks. Thus, the brand lives from beyond the grave.
Until then, NBC is obligated to run advertising for NBCi because of a contractual agreement that calls for the network to run advertising time for NBCi in exchange for equity in the company, which was originally cobbled together from a number of NBC Internet assets including xoom.com and online directory snap.com.
A HELPING HAND FOR NBC
"This helps us and it helps them [the NBCi shareholders]," said John Miller, co-president of the NBC Agency, which does the creative and places the media for NBC, MSNBC.com, MSNBC, NBCi.com and CNBC. Though NBC is certainly helped by hyping its fall schedule during a crucial promotional time, it's questionable whether the ads do anything for shareholders. NBC has already agreed to buy the remaining shares of NBCi at $2.19 apiece, with the final vote taking place on Aug. 8. Mr. Miller estimated that NBC still needs to run off about $3 million to $5 million in media time for NBCi.
NBC's deal with NBCi was to, effectively, give the portal around $80 million a year in network ad time. Because NBCi was a public company, NBCi actually needed to buy the advertising time-just like any other advertiser. But this was somewhat a bookkeeping chore since NBC held a minority stake.
TV networks and other media companies did similar advertising time-for-equity deals. CBS, for instance, has one with sweepstakes portal iwon.com.