Microsoft And NBC Joint Venture Comes To An End!

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The 16-year marriage between world’s largest software maker Microsoft and cable television NBC news has finally dissolved, freeing Microsoft to build its online news service. The decade and a half long relation began to unwind in 2005 when Microsoft sold its stake in MSNBC’s cable TV channel to NBC.

NBC has planned to buy Microsoft’s 50% interest in the MSNBC news website for an undisclosed amount. Following the collapse of the joint venture msnbc.com has been rebranded as nbcnews.com and readers who visited MSNBC.com website were automatically redirected to nbcnews.com.

Key reason for this online divorce stemmed from the two partners’ desire of gaining greater control over their digital destinies as internet became an integral component of their businesses. Microsoft, in particular, had grown frustrated by contract terms requiring it to feature content from msnbc.com only on its website. This frustration was exacerbated by MSNBC cable channel itself when in order to compete with the conservative viewpoint of Fox News it began to tailor its programming with a liberal touch. However, this led to the perception that the content presented on MSNBC’s website was politically aligned. Moreover, Microsoft’s massive internet investments rarely paid off which further added to the woes of its shareholders. The software maker initially invested $220 million in the venture; however, whether Microsoft was able to make any money out of it is still unclear.

"Being limited to MSNBC.com content was problematic to us because we couldn't have the multiple news sources and the multiple perspectives that our users were telling us that they wanted," said Bob Visse, general manager of MSN.com.

Now that Microsoft has shed those shackles, it intends to embrace the same strategy that was earlier adopted by two other major internet companies, Yahoo Inc and AOL Inc. even though with its own online news service it sets out to compete against NBC News, Microsoft will continue to highlight main stories from its former partner for another two years.

In an attempt to restructure itself, NBC News plans to create a new online destination for the MSNBC cable channel’s personalities next year.