Microsoft and NBC end 16-year MSNBC partnership

@CNNMoneyTech July 16, 2012: 2:32 PM ET
NBC rebranded its website as, after it bought out Microsoft's stake.

NBC rebranded its website as, after it bought out Microsoft's stake.

NEW YORK (CNNMoney) -- Move over TomKat, there's another big breakup in town. -- the product of a nearly two decade long, odd-couple partnership between NBC and Microsoft (MSFT, Fortune 500) -- is now fully under NBC's roof. Comcast (CMCSA), the media giant's parent company, bought Microsoft's 50% share in the online news site. The deal was completed late Friday and announced on Monday.

The website has been rebranded, though the content remains the same. Traffic to redirects to for the time being, but in early 2013, will relaunch as the separate online home for NBC's cable network of the same name.

Confused yet? So were many people, which was part of the catalyst for the divorce. Microsoft divested its interest in the MSNBC TV station in 2005. Since then, the website and the TV network have existed as two mostly distinct properties without much to do with one another.

The divide between the television and online properties has become even greater in recent years as the cable channel began to position itself as a politically progressive alternative to News Corp.'s (NWS) Fox News Channel -- a shift that the website did not follow.

The deal allows NBC to settle any confusion between the two., and will be under the newly formed NBC News Digital division, and the MSNBC brand will be exclusive to the cable channel. (It will retain that name even though Microsoft, the source of the "MS," is long gone.)

"With this move we're investing in the future of this news division," NBC News president Steve Capus said. "We want to make sure we have complete control and ownership of our digital future."

Microsoft also says that it expects to benefit from the separation. The deal frees up its MSN portal to pull in news content from other websites and create some of its own original content, though it will continue to provide links to as well.

"With today's announcement, we will be able to provide a broader perspective on what's happening in the world by offering more original and third-party content," said Bob Visse, general manager of Microsoft's online services division.

The terms of the deal weren't disclosed, but sources with knowledge of the deal told the New York Times that Comcast paid Microsoft about $300 million for its stake.

The breakup marks the end of a 16-year relationship struck in the early age of digital journalism. Microsoft initially invested an estimated $500 million in 1996 for its stake in the joint venture, which was intended to help NBC to expand its reach.

The partnership created the cable network and the online news site, both named MSNBC. When the 24-hour channel first launched, programs were hosted by familiar NBC faces, including Katie Couric, Bob Costas and Tom Brokaw.

But the relationship quickly soured. In 2002, Microsoft's CEO Steve Ballmer said that in retrospect, Microsoft should not have gone through with the NBC deal.

Rumors have been floating around for years that Microsoft would end its partnership with NBC. In addition to the political shifts, the financial and operational relationship between the two companies became a mess: Microsoft controlled a separate ad network for the website, which hindered some advertisers from running campaigns both online and on television.

Microsoft will continue to broker the ad relationships for the site during a transitional period. To top of page

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