Why Microsoft's 16-Year Experiment With MSNBC.com Ended

By Chris Preimesberger  |  Posted 2012-07-16 Email Print this article Print

NEWS ANALYSIS: Politics, as it often does in relationships of all kinds, played at least a small part in the breakup. But the bottom line, as it usually is in business deals, was profits and power -- specifically, lack of both.

The first experiment in networking conventional television media with the Internet came to a close on the evening of July 15, when both Microsoft and NBC Universal announced they were abandoning their msnbc.com/MSNBC cable television partnership after exactly 16 years in business together.

The idea behind it -- two major powers in complementary businesses joining to create a sum larger than its parts -- was probably a good one. But in this case, the partnership born in the brash early days of the Internet prior to the bursting of the IT bubble simply ran out of steam.

NBC News revealed July 16 that its parent company, NBC Universal, had bought Microsoft€™s 50 percent share of MSNBC cable network for an undisclosed price, ending a news-and-technology-sharing partnership that dated to 1996. It has been reported by several news agencies, including The New York Times, that NBC Universal paid Microsoft about $300 million to dissolve the partnership and take control of both media.

Also on July 15, NBC announced it acquired full control of msnbc.com (its stylized lowercase brand name) Web network from Microsoft and immediately rebranded the site as NBCNews.com.

Both Companies Have Plans in the Works

The whole changeover isn't completed; in 2013, msnbc.com will be relaunched as the new home for the MSNBC TV, thus completely ending the relationship between the two entities.

This is another example of the power and importance of branding. Even though Microsoft won't be involved in MSNBC TV, except for possibly buying advertising time, the cable channel will still have the "MS" in its name.

Microsoft now is free to start nailing down content-sharing deals for news aggregators other than NBC for its MSN.com portal. As Microsoft expands its presence in cloud services such as MSN.com, Bing search, Office 2013 and others, the separation from NBC will enable the company to compete directly in the online news delivery business with Google and Yahoo.

Microsoft holds no secrets here. The company revealed July 15 that it will be rolling out a new version of its portal in a few months, so all of this has been one large, long-coordinated move.

The corporate statement explained: "It (MSN.com) will be singularly focused on online consumers, harnessing real-time signals produced by social networks using the power of search to deliver breaking updates based on relevant topics. MSN will utilize advanced technologies to mine real-time information from the web to keep users constantly up to date and in the know on the latest breaking news and trends across the Internet."

Were Politics Part of the Picture?

Politics, as it often does in relationships of all kinds, played at least a small part in the breakup. MSNBC was well known as a liberal-leaning cable television network, and Microsoft never was all that comfortable about it. Nonetheless, the biggest reason for the breakup was that Microsoft simply didn't see the point anymore; MSNBC was never able to surpass Fox News or CNN in the ratings race, although viewership for all cable news -- and television news in general -- is in a slow but steady decline.

A capsulized history of the relationship: MSNBC and msnbc.com were founded in 1996 as a co-operation of Microsoft and General Electric's NBC division, which is now NBC Universal and owned by Comcast. The online partnership of the two companies in msnbc.com ended on July 16, with the site being rebranded as NBCnews.com.

MSNBC shares the NBC logo of a rainbow peacock (pictured) with its sister channels NBC, CNBC, NBC Sports Network, and ShopNBC. MSNBC is made available to more than 78 million households in the United States.

MSNBC was founded by longtime television executive Tom Rogers, who was instrumental in developing the strategic partnership with Microsoft when he was high up at NBC. The world's largest software company invested $221 million to obtain 50 percent share of the cable channel. MSNBC and Microsoft then agreed to share the costs of a $200 million newsroom in Secaucus, N.J., for the msnbc.com Web network. NBC supplied the workspace.

Home of Olbermann, Matthews, Scarborough, et al

MSNBC, which at different times employed such well known and colorful news commentators as Keith Olbermann, Chris Matthews, Joe Scarborough and David Gregory, wasn't shy about acknowledging its to-the-left news-coverage agenda.

In October 2010, the network launched a marketing campaign with the tagline "Lean Forward." In a June 2011 interview, MSNBC president Phil Griffin even stated for the record that "MSNBC has established a sensibility, a position, a platform" and that "MSNBC is really the place to go for progressives."

It now behooves NBC to evolve the msnbc.com brand into a more enticing one. Traffic at msnbc.com during the last few years has not been impressive, attracting from 1.5 million to 2 million monthly unique visitors, according to the Compete.com Web analytics site.

We at eWEEK will keep an eye on how this amicable business separation progresses for both corporations.

In the Interest of Full Disclosure ...

In closing, we'd like to disclose a personal involvement in this story. No, not in a business or professional sense.

Turns out yours truly plays softball on the msnbc.com team, captained by former msnbc.com sports editor Danny DeFreitas, a longtime friend and colleague from our newspaper days. The impact of the split on me and my teammates? We had to obtain new caps, as shown in the accompanying photo.

As long as they fit OK, we had no problem with the corporate move.

Chris Preimesberger is Editor of Features and Analysis at eWEEK. He also plays catcher on the NBCSports.com softball team each summer. Twitter: @editingwhiz

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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