Microsft-NBC Divorce: A 16 Year History

After 16 years of marriage, Microsoft Corp. and NBC are divorcing.

Comcast, the parent company of NBC, has acquired Microsoft’s stake in MSNBC.com and the website will now be known as NBCNews.com.  Users of the site will be automatically redirected to the rebranded site.

Sources say that Microsoft is getting $300 million for the sold stake and operations for the online news portal would be relocated from Microsoft’s corporate campus in Redmond, Wash., to NBC News’ longtime home in New York.

The rebranding of the site is to eliminate the confusion between the website and the cable channel.  Comcast revealed that by 2013, they will be launching a new digital home as an extension of the MSNBC TV on-air brand.

As in any divorce, there are always two sides to the story.  Let’s look at what transpired in their 16-year marriage and what led to the divorce.

NBC’s side

According to NBC, the separation would give them total control of their digital business.  There were a lot of interested people who wanted to cross-advertise on MSNBC.com and on their TV channel but they did not have control over it.  With the divorce from Microsoft, they expect more people to show interest in advertising on their platforms and the freedom to choose other sources of traffic other than MSN, though, for the meantime, the traffic deal would continue.

“It’s undeniable how big a part of all of our businesses the digital properties are going to be,” Steve Capus, the president of NBC News, said in an interview at his office at Rockefeller Center in Manhattan. “We think we have a much better opportunity to shape them, and frankly grow the news division over all, if we have direct control over all of it.”

According to Capus, MSNBC.com was fine, but he was never too fond of the word ‘fine’, “We want something more than fine.”

Microsoft’s side

Microsoft grew tired and frustrated with the limitations of the partnership.  They were bound by contract to exclusively feature MSNBC.com content on their own websites.

“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.

Another thing that didn’t work for them was the transformation of MSNBC, the cable channel, tailored for audiences with a liberal viewpoint to compete with Fox News Channel’s appeal to conservative viewers.  Microsoft deemed that their news content became one-sided for both the cable channel and the website.

With the divorce, Microsoft is now free to launch their own news website this fall.
Though the breakup may sound bitter for some as both parties have their own woes regarding the 16-year partnership, both are relieved of the separation as they are now free to do what they want and feature contents on their site that they see appropriate.

“There is no question that we are going to have more flexibility to make our own decisions,” said Vivian Schiller, NBC News’ chief digital officer. “This is really an amicable breakup. We think competition will make us better.”