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NEWS ANALYSIS: New-media tensions for MCI, News Corp.

Published on .

Behind the crumbling of News Corp.'s online joint venture with MCI Communications Corp.--which last week announced it was instead "pushing [its] boat into Microsoft's waters"--lies a tale of corporate culture clashes and political infighting.

The venture, already plagued by numerous delays, was hit with the latest and biggest bombshell when MCI announced a broad online alliance with Microsoft Corp.

The effects of that shift are many. MCI will become a silent minority partner in the News Corp. venture, while Oracle Corp. is finalizing details of becoming an equal partner with News Corp. Launch is delayed until at least mid-March. And Mr. Kurnit's role is shaky; he would like to stay with the venture for now, but may be forced out by News Corp. and Oracle or forced back in-house by MCI, where his next role is far from clear.

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