NBC and Microsoft Seal Divorce, MSNBC.com Becomes NBCNews.com

Complex Joint Venture Will Take Two Years to Unwind

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The divorce is final. Microsoft and NBC have officially ended a relationship that dates back to the early days of the consumer internet and created one of the web's biggest news portals: MSNBC.

Now, with a reported $300 million payment, NBC and its corporate owner, Comcast, take sole control of the news site, and are renaming it NBCNews.com. The site will be folded into NBC Digital and run by former National Public Radio chief executive Vivian Schiller, who joined as NBC News digital chief last year.

Vivian Schiller
Vivian Schiller Credit: New York Times

Current MSNBC President Charlie Tillinghast will continue to run the former MSNBC digital properties -- including Today.com, NightlyNews.com and EveryBlock.com -- and report to Ms. Schiller. NBC News President Steve Capus will lead the digital news operation.

While successful in building one of the largest news sites, it was always an awkward marriage. Microsoft is fundamentally not a content company, while NBC News didn't control its own web presence.

Talks to unwind it date back more than eight years, and heated up when NBC bought a controlling stake in the MSNBC cable news network -- also launched as a joint venture, along with MSNBC.com, in 1996. Talks to acquire all of MSNBC.com had hung up on the price Microsoft wanted to exit the site, as well as the fact that MSNBC was reliant on traffic from Microsoft's web portal, MSN.

NBC has also entertained renaming its cable network MSNBC over the years, but in a conference call, Mr. Capus said that idea is now off the table. The deal allows NBC to continue using the MSNBC brand on TV and Mr. Capus said there's no point in throwing away 16 years of brand equity.

But MSNBC TV will get its own web site in 2013, reflecting the opinionated content that comprises much of its primetime lineup, as well as connected it better to the NBC brand. "But we can do better and cable deserves its own dedicated home online," Mr. Capus said. This should clear up brand confusion that has appeared."

The new NBCNews.com will also continue MSNBC's relationship with the New York Times, which provides many of its big news headlines. "It works for both of us," Ms. Schiller said.

MSNBC has at times been the largest online news portal in the world, and its still a very close No. 4 to CNN (55.7 million) and Huffington Post (58.9 million) with nearly 50 million unique visitors in June, according to comScore. All three news sites have seen their reach eclipsed by another news partnership between Yahoo and ABC News, inked late last year. That partnership reached more than 81 million unique viewers in June, according to comScore.

The New York Times reported that conversations resumed after Comcast acquired a majority stake in NBCUniversal in early 2011 and that the deal was finalized last Friday.

U.S.Total Unique Visitors (000)
Jun-2011Jun-2012% Change
Total Internet : Total Audience 214,474221,1553
News/Information - General News160,478190,62019
Yahoo!-ABC News Network81,326
HPMG News57,51958,9372
CNN Network72,00855,710-23
MSNBC Network47,65049,9605
CBS News13,73433,691145
USATODAY Sites21,80331,04942
FOXNEWS.COM22 ,85824,2336
DFM Network17,301
Examiner.com Sites10,9109,920-9
Source: ComScore

The partnership is so complex, it will take at least two years to unwind it, the network said. NBCNews.com will continue to provide news to Microsoft's MSN web portal, while Microsoft will continue to sell NBCNews.com ad inventory. In a statement, Microsoft said MSN will remain an "important distribution partner" for NBCNews.com.

Ultimately, NBC will take over ad sales for NBCNews.com, but it will take time to migrate from Microsoft's digital ad systems.

For its part, Microsoft also intends to stay in the news business. It will begin hiring to create its own news operation at MSN.com. And NBC plans to maintain a presence in the Seattle area, building what it calls a "NBC News Innovation Center" focusing on digital innovation for both NBC News and NBCUniversal. About half of MSNBC.com's staff was located on the Microsoft campus in nearby Redmond.

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