Comcast buys Microsoft stake in MSNBC.com
(Reuters) - Comcast Corp, the parent company of NBC, has bought out Microsoft Corp's 50 percent stake in MSNBC.com for a reported $300 million to assume full control of the news website.
The deal ends 16 years of a 50-50 joint venture between Microsoft and NBCUniversal, which is now majority-owned by Comcast Corp, NBC said.
"Today we're taking on a new name — NBCNews.com. While our name is changing, our commitment is not," Jennifer Sizemore, editor-in-chief of NBCNews.com, said in a letter posted on the company's website.
"The ties are deep, and untangling them will take at least two years," the network said.
The New York Times reported on Sunday the transaction was valued at $300 million, a part of which comes from the joint venture's past profits, citing people with knowledge of the deal.
NBC and Microsoft joined forces in 1996 to create a cable news channel and online news operation that melded broadcasting with then-emerging internet technology.
At that time, Microsoft invested $220 million for its 50 percent stake in NBC.
In 2005, the companies terminated their partnership operating the MSNBC cable channel and NBC was acquired by Comcast four years later.
MSN said in a blog it will be delivering a new news service in the fall that will be focused on its online consumers "harnessing real-time signals produced by social networks using the power of search to deliver breaking updates".
Analysts welcomed the move, saying it simplified Comcast's structure. Earlier this month, Comcast said NBC Universal would sell its 16 percent stake in History Channel owner A&E Television Networks for $3 billion. Two months earlier Comcast said it would exercise an option to sell a "substantial portion" of its holding to its joint-venture partners Disney-ABC Television Group and Hearst Corp.
"NBC (51%-owned by CMCSA) already bought in MSFT's stake in the cable channel MSNBC in 2005, and now NBC can more effectively cross-sell advertising of the unified brand on TV and online," said David Joyce, an analyst at Miller Tabak.
The news of a possible website deal was first reported in May.
Microsoft stock was down 0.9 percent at $29.12 on the Nasdaq in early Monday trading. Comcast shares lost 0.5 percent to $31.72 on the Nasdaq.
(Reporting by Adithya Venkatesan and Supantha Mukherjee in Bangalore; Nicola Leske in New York; Editing by Muralikumar Anantharaman, Saumyadeb Chakrabarty and Sofina Mirza-Reid)