Microsoft News Tracker

MSNBC.com, the 50/50 partnership of Microsoft and NBC, today announced that it had acquired Newsvine com, one of the new breed of “social news” Web sites. The all cash deal was effective October 5, but the price isn’t being disclosed.

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Sarah Ellison and Dennis K. Berman are reporting in the Wall Street Journal (a Dow Jones publication) that in recent weeks General Electric and Microsoft were in discussions about offering an alternative bid to News Corp’s proposed acquisition of Dow Jones from the controlling Bancroft family. Apparently GE and Microsoft couldn’t reach an agreement and GE may look for another partner to make a bid. It isn’t really clear what part Microsoft would have played in the deal other than providing a fat wallet and experience in partnering with GE in MSNBC.com and the MSNBC TV cable channel.

NBC Universal and News Corp. Announce Deal with Internet Leaders AOL, MSN, MySpace And Yahoo! to Create a Premium Online Video Site with Unprecedented Reach:

News Corporation and NBC Universal will launch the largest Internet video distribution network ever assembled with the most sought-after content from television and film, it was announced today by Jeff Zucker, President and Chief Executive Officer, NBC Universal and Peter Chernin, President and Chief Operating Officer, News Corporation. The video-rich site will debut this summer with thousands of hours of full-length programming, movies and clips, representing premium content from at least a dozen networks and two major film studios.

AOL, MSN, MySpace and Yahoo! will be the new site’s initial distribution partners. Their users, who represent 96 percent of the monthly U.S. unique users on the Internet, will have unlimited access to the site’s vast library of content. This media alliance will offer consumers free long- and short-form video and create a compelling platform for advertisers, targeting the rapidly growing audience of online video consumers. Charter advertisers include Cadbury Schweppes, Cisco, Esurance, Intel and General Motors.
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At launch, full episodes and clips from current hit shows, including Heroes, 24, House, My Name Is Earl, Saturday Night Live, Friday Night Lights, The Riches, 30 Rock, The Simpsons, The Tonight Show, Prison Break, Are You Smarter than a 5th Grader and Top Chef, plus hits from the studios’ vast television libraries, will be available free, on an ad-supported basis, within a rich consumer experience featuring personalized video playlists, mashups, online communities and video search. Plus, the extensive programming lineup will include fan favorite films like Borat, Little Miss Sunshine, Devil Wears Prada, The Bourne Identity and Bourne Supremacy with bonus materials and movie trailers. Post-launch, plans will be considered for acquiring additional content as well as producing and licensing original programming for the new site’s audience.

Its launch distribution partners will provide the biggest potential reach of any player on the Internet. Moreover, the new site will actively seek agreements with a variety of additional distribution partners.
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“This partnership is completely aligned with our continued investment in video on MSN and will allow hundreds of millions of our consumers to tune into a vast library of high-quality, safe and legal online video,” said Kevin Johnson, President, Platform and Services Division, Microsoft. “Our alliance proves that you can deliver quality online video entertainment and protect intellectual property and copyright at the same time. We look forward to working together to explore additional opportunities to distribute this content across other Microsoft services and devices.”

YouTube isn’t mentioned by name in the press release, but you don’t need a weatherman to know which way the wind blows.

Aside from the fact that it seems more about distribution than about network, the real question is how much YouTube will be hurt by the loss of commercial video in the face of its continued dominance in displaying the amateur variety. Of course, YouTube would be invited to join the network in less than a New York minute if they agreed to the media companies’ revenue sharing terms.

Update: Kevin Johnson’s formal statement is here. Best line:

Today’s announcement is a great win for MSN’s more than 460 million consumers and for online video more broadly.

Golly, such a deal!

Peter Lauria:

And now for some breaking news from MSNBC: Microsoft doesn’t know jack about media.

Unlike the nascent move towards content creation by competitors Yahoo! and Google, Microsoft raised the last of its media white flags Friday, agreeing to sell a controlling stake in MSNBC to the eponymous other half of the cable news partnership.
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The MSNBC investment marks another in a long line of failed content forays by Microsoft, which has spent billions, particularly through investments in cable companies, attempting to diversify its revenue stream — but to no avail.

Also mentioned are AT&T Broadband, Slate, and Expedia. There is some backhanded praise for the serendipitous investment in Comcast.

While Microsoft may not have been doing any last minute shopping, NBC was doing just that:

NBC Universal announced today that it has reached a deal to acquire majority control of MSNBC, the 24-hour cable television news network, from Microsoft.

The transaction could be the first step in ending a nine-year partnership between the companies, and puts NBC squarely in control of the network, which has lagged behind the Fox News Channel and CNN in the ratings race for years. NBC said it has an option to acquire 100 percent of the cable channel within two years.

The deal comes after nearly a year of negotiations to undo the partnership, in which each side was increasingly frustrated with the other.
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But the companies said msnbc.com will be unaffected by the transaction and Microsoft and NBC, which is 80 percent owned by General Electric, will continue to equally own the Internet site.

As I mentioned on Monday, MSNBC TV and MSNBC.com are separate and distinct. No financial terms were announced.

Update: From bizjournals.com:

NBC Universal increased its 50 percent stake in MSNBC’ cable channel to 82 percent in the all cash deal. Under the new deal, NBC Universal will have the option to buy Microsoft’s remaining share of MSNBC to take 100 percent ownership within two years.