NBC Universal bought a controlling interest in the MSNBC cable news television channel it created with Microsoft Corp. in 1996, with an option of getting full ownership in two years.
NBC Universal increased its stake in MSNBC to 82 per cent from 50 per cent in a cash transaction, Microsoft spokesman Adam Sohn said yesterday, declining to comment further. Redmond, Wash.-based Microsoft and General Electric Co.'s NBC Universal will continue to own equal parts in the MSNBC.com website.
NBC Universal plans to integrate MSNBC, whose audience ratings have lagged behind News Corp.'s Fox News Channel and Time Warner Inc.'s CNN, into its other news operations. Microsoft, the world's biggest software company, will retain a stake in the news website to supply content to its MSN Internet service.
"MSNBC never lived up to the promise of what it was supposed to be," said Peter Gardiner, chief media officer at New York advertising agency Deutsch Inc., part of Interpublic Group of Cos. "I would guess you're going to see some big changes at MSNBC."
The companies didn't disclose financial terms of the transaction. NBC spokeswoman Julie Summersgill declined to comment beyond the press release.
Microsoft and General Electric invested $240-million (U.S.) over five years to start up MSNBC, mounting a challenge to New York-based Time Warner's CNN. The website has fared better than the news channel, ranking ahead of sites run by Fox, CNN and the broadcast news competitors ABC and CBS.
"The partnership allows us to focus on growing the on-line venture," Microsoft's Mr. Sohn said, referring to the MSN Web service.
MSNBC began airing on July 15, 1996, challenging CNN. Fox News Channel four days later said it would start its own 24-hour news network, and since then has gone on to attract the biggest audiences among cable-TV news networks. GE (NYSE) unchanged $35.42 (U.S.). MSFT (Nasdaq) rose 5 cents (U.S.) to $26.64.
