NBC Universal acquires controlling stake in MSNBC from Microsoft

New York (NY) - In a long anticipated move, NBC Universal today announced it has purchased an extra 32% stake in MSNBC, giving it an 82% controlling interest in the television division of the news-gathering operation. MSNBC was established in 1996 as a joint 50/50 venture between Microsoft and NBC, which was then a unit of General Electric.

"The ending of the 50/50 partnership with Microsoft will give us more flexibility to continue the progress we’ve made," said recently appointed NBC News president Steve Capus, and MSNBC president Rick Kaplan, in a joint memo to employees of both divisions this morning. Microsoft and NBC Universal will continue to split their share of MSNBC.com, the Internet division of the news gathering operation, 50/50, according to the memo. Editorial employees were also promised they would keep their positions, as only the management and business operations of the cable news division would change.

Giving a hint as to what’s to come, Capus said in a press release this afternoon, "Acquiring a controlling interest in MSNBC will allow us to fully integrate the channel into our News operations and our overall cable platform." Speculation, some of which is apparently justified by hard evidence, points to the likelihood that the TV network will be renamed "NBC News Channel" sometime in 2006. That brand is currently in use today, having been launched as a joint venture between NBC TV affiliates to produce an overnight news program called "Nightside" in 1991. Since the program’s cancellation in 1997, the joint venture continues to serve NBC affiliates with syndicated news packages.

But even so, GE has continually re-registered the domain name "nbcnewschannel.com," according to a recent scan of WHOIS records. Currently, the name redirects users to NBC.com.

Today’s joint press release also gives some hints as to Microsoft’s plans. The "MSN" brand name, as we already know, is fading out in favor of "Windows Live," the company’s new and burgeoning suite of online Web services. MSNBC.com may continue to play a role, possibly retaining its name online, as it continues to play a ratings game with CNN.com, trading the #1 news site distinction back and forth. But ending the 50/50 split on the television side may enable Microsoft to effectively divorce the online operation from the television operation, so that Microsoft can have a greater say in steering the infrastructure and direction of the site. Analysts over the years have commented that MSNBC.com’s success online has never effectively translated into success on television, where MSNBC remains third among news channels, though with some marginal gains in the core demographic this past year. Meanwhile, according to the New York Times, Microsoft could conceivably sell its now 18% stake in MSNBC television to NBC Universal in two years.