Microsoft Leaves MSNBC.com to begin Solo Venture

Announcement brings to a close 16-year relationship

All good things must come to an end, they say - and a long and fruitful 16-year relationship between a broadcasting news giant and an Internet company came to an end over the past weekend. Microsoft will be leaving NBC News in a partnership that powered MSNBC.com. The announcement means that the world's largest software maker will begin to build its own online news service.

Both Microsoft and NBC News wished to gain greater control over their digital destinies as the Internet becomes an increasingly important part of their businesses. The joint venture at times hindered both Microsoft and NBC.

LOS ANGELES, CA (Catholic Online): The relationship between the two began to unravel in 2005 when Microsoft sold its stake in MSNBC's cable TV channel to NBC.

As part of the agreement, NBC will buy Microsoft's 50 percent interest in the MSNBC Web site for an undisclosed amount. MSNBC.com will now be rebranded as NBCNews.com, and readers who logged into MSNBC.com this past weekend were redirected to NBCNews.com.

In addition, the Web site will move its headquarters from Microsoft's corporate campus in Redmond, Washington to NBC News' longtime home in New York.

Both Microsoft and NBC News wished to gain greater control over their digital destinies as the Internet becomes an increasingly important part of their businesses. The joint venture at times hindered both Microsoft and NBC.

Microsoft had grown restless in the past by a prior contractual obligation to exclusively feature MSNBC.com content on its own Web sites, which was worsened by the MSNBC cable channel's plan to feature liberal-slanted stories in counter to Fox News' conservative slant.

This plan led to a perception that material from MSNBC's webs site was politically slanted as well.

"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," Bob Visse, general manager of MSN.com says.

Microsoft is preparing to launch its own news service this fall. While declining to provide more specific details, Visse said the news staff will be about the same size, approximately 100 people who likewise created original content for the MSNBC.com.

Microsoft is employing same strategy as the owners of two other major Internet companies, Yahoo Inc. and AOL Inc.

In the past, Microsoft used its lucrative franchise selling personal computer software to pay for Internet investments that rarely paid off. Microsoft initially invested $220 million in the MSNBC joint venture. It's unclear if Microsoft ended up making any money on the alliance. Microsoft's online operations, which include the Bing search engine and MSN portal, have lost more than $10 billion in the past seven years.

Microsoft will continue to feature top stories from its former partner for the next two years under terms of the split. NBC News believes it will be able to attract more traffic to its stable of Web sites by forging other partnerships that were off limits when it was tied to Microsoft.