NEW YORK (CNNfn) - Microsoft and NBC on Monday launched MSNBC, the biggest start-up in cable television history.
The venture pits the software giant and the leading broadcast network against another once-upstart in news, CNN.
MSNBC is the most serious challenge that CNN has faced. The alliance of the two companies has deep pockets, close to half a billion dollars at the start.
It's pouring on the NBC star power and the production look of network TV, but analysts note the launch comes after NBC drastically cut back its overseas bureaus. Mark Harrington, vice president of MSNBC, was optimistic. (106K WAV) or (106K AIFF)
One ticklish problem for NBC will be keeping its affiliates happy while MSNBC challenges them directly in their home markets.
CNN is taking the threat seriously, citing Microsoft's marketing mastery and NBC News' reputation. CNN has fought off competition before, namely the Satellite News Channel, backed by Westinghouse and ABC in the early 80's.
The company that Ted Turner built is counting on a 16-year head-start and the loyalty of viewers, advertisers, and cable operators.
"We have never been better positioned to compete than we are today with nine domestic bureaus, 21 international bureaus, 3,000 superb staffers, and we know we are in for a fight. We're ready." noted CNN President Tom Johnson.
The news tournament will also take place in cyberspace, where MSNBC will maintain a Web site to go along with the television network.
Porter Bibb, media analyst with Landenburg, Thalman, warned that MSNBC should keep low expectations at first.
"As a pure profit maker, the news advertising pie is very limited. CNN over the years has averaged one share of the viewing audience. MSNBC is going to come on the air Monday and if they get a tenth of a share, they'll be doing well."
MSNBC launches with 22 million households, one-third of CNN's current reach, but still one of the biggest networks from day one.