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Microsoft in Sidewalk sale
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July 19, 1999: 5:40 p.m. ET
TicketMaster Online-City Search swaps 9% stake in $240 million deal
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NEW YORK (CNNfn) - Microsoft Corp. said Monday it will sell key parts of its Sidewalk online city and consumer guide service to rival TicketMaster Online-CitySearch in exchange for a stake in TicketMaster valued at $240 million.
Under the agreement, Ticketmaster Online-CitySearch will pay Microsoft 7 million Class B common shares, equal to about 9 percent of the outstanding stock.
In addition, Microsoft (MSFT) can, if it chooses, buy another 4.5 million shares for $180 million, giving it 13 percent of Ticketmaster (TMCS) overall. Three million of those shares would be priced at $30 each, with the remaining 1.5 million priced at $60 per share.
If so, Microsoft would become the second-largest Ticketmaster shareholder, behind USA Networks (USAI).
While CitySearch once had been a rival to the Sidewalk service's offerings, it now will become the exclusive provider of arts and entertainment services to MSN.com, Microsoft's portal service.
However, Microsoft will keep its popular online Yellow Pages services, which lets users look for companies and make purchases online.
Indeed, Microsoft said the deal will let it concentrate on its core Internet strategies for MSN, which is beefing up its electronic commerce offerings for consumers and businesses.
For its part, CitySearch will increase the number of city guides it offers to 77 cities from 33.
"It will allow us to more quickly reach our city expansion goals, to add a high-quality distribution relationship with MSN, and ultimately to better help our consumers get things done locally," said Charles Conn, Ticketmaster Online-CitySearch chief executive officer.
In trading Monday, Microsoft shares lost 1-1/16 to close at 98-3/8 while Ticketmaster leapt 6-1/16 to 40-1/16.
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