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News
BET plans Internet portal
August 12, 1999: 3:12 p.m. ET

$35M Web venture has backing from Microsoft, USA Networks, others
By Staff Writer Martha Slud
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NEW YORK (CNNfn) - In an effort to create the definitive Internet destination for African-Americans, BET Holdings Inc. unveiled plans Thursday to launch a $35 million, Microsoft-backed Web portal offering everything from instant messaging to parenting advice and political news.
     Privately-held BET, a Washington, D.C.-based media company that owns the popular cable channel Black Entertainment Television as well as print and film properties, will launch the BET.com site this fall. Its partners include Microsoft (MSFT), Liberty Media (LBTYA), News America Inc. -- a division of Rupert Murdoch's News Corp. (NWS) -- and USA Networks Inc.(USAI).
     BET's founder and chairman, Robert L. Johnson, and other backers cited statistics showing that blacks lag far behind whites and Hispanics in Internet usage, saying that the new site will provide more original content by and for blacks on the Internet and create a marketplace for black-owned businesses online.
     "There's never been a time when there's been a technology like the Internet for both the economic and the social enrichment of the African-American community," Johnson said at a New York news conference.
    
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BET chairman Robert L. Johnson:
'We have to create a reason, a desire
to be part of something.'

     The Web site won't be alone in targeting the African-American market. Other networks include Blackvoices.com, which is owned by the media company Tribune Co. (TRB), and NetNoir.com, which is 20 percent owned by America Online (AOL).
     But BET said its site, scheduled to roll out Nov. 1, will be much more comprehensive than any other black-oriented site because it will be able to draw on its array of content plus enlist the resources of the four media companies helping to bankroll it, such as USA Networks' Home Shopping Network.
     The investment by Microsoft -- whose chairman, Bill Gates, provided a videotaped message supporting the venture that was played at the news conference -- may go far beyond money, offering potential links to its sites as well as technological aid.
     BET already operates a three-year-old Web site in conjunction with Microsoft, MsBET.com. The new site will replace the existing site and provide free e-mail, electronic commerce, news and entertainment, Johnson said.
    
Targeted Web communities

     While African-Americans are eager consumers of television and cable as well as electronics such as cellular telephones and VCRs, many blacks have not found a compelling reason to go online, Johnson said.
     "We have to create a reason, a desire to be part of something," he said.
     Targeted Web sites to specific groups, such as women's network iVillage (IVIL), or Latin American Web portal StarMedia (STRM), have exploded recently. Like many other types of startup Internet companies, these two firms have not yet made any money, however.
     A site such as the one envisioned by BET, closely connected to a popular TV network or other prominent company, has a good possibility of drawing in users, said Joel Yaffe, an Internet analyst at Giga Information Group.
     "Brand identity is extremely important," he said. Such a site "has the potential to gain a lot of publicity and thereby generate traffic for a community that has traditionally been slow to get on the Internet."
    
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The new Web site is slated to debut Nov. 1.

     The $35 million investment provided by BET Holdings and its partners represents the largest online investment ever aimed at blacks, Johnson said. He said BET would be the majority owner of the venture, which will be based in BET's hometown of Washington, but would not disclose the exact amounts being invested by the other four partners.
     Two well-known black leaders, NAACP head Kweisi Mfume and United Negro College Fund president Bill Gray, spoke at the news conference in support of the project.
     Mfume cited Commerce Department statistics showing that only about 11 percent of African-American households are connected to the Internet, compared with about 32 percent of whites and 13 percent of Hispanics.
     "The sad thing about that is that gap is not narrowing," Mfume said.
     Despite the so-called "digital divide" in Internet usage, Forrester Research has estimated that about 3.9 million African Americans will be online by 2000 and that blacks are the fastest-growing online audience.
     BET said it had no immediate plans to team up with an Internet service provider to boost African American access to the Internet, but said it was open to discussion about various partnerships.
     While Johnson said that for some African-Americans, cost is a barrier to Internet usage, for many the issue is lack of interest in going online. "There's a role for us to get the word out," he said.
     While Johnson and Mfume stressed their goal of encouraging more blacks to go online, Peter Chernin, president and chief operating officer of News Corp., noted that his company would not have joined forces with BET if it didn't think the venture also could be profitable.
     "We think that there's a huge and phenomenal business opportunity here," he said.
     Commenting on whether the planners hoped to take the new venture public on Wall Street, Johnson said that such a move would be considered but provided no further detail.
     "We see this as a long haul play," he said, saying the companies were not looking "for a quick upside," referring to the soaring stock prices that some Internet companies have seen in their Wall Street debuts.Back to top

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