MSNBC, Jupiter Divestments

As a result of shifting business priorities, Microsoft has sold most of its stake in the MSNBC cable TV network to co-owner NBC (a subsidiary of General Electric), and has sold most of its stake in Japanese cable provider Jupiter Telecommunications to institutional investors. The divestments are the latest example of Microsoft’s decreasing interest in owning content and broadband infrastructure.

MSNBC

Microsoft and NBC launched the MSNBC TV network and companion Web site in 1996, with Microsoft reportedly investing US$220 million for a 50% stake in the venture. Since then, thanks in large part to links from Microsoft products such as Internet Explorer, the MSNBC.com Web site has become the most popular TV news site on the Web with more than 22 million unique visitors in Nov. 2005 (according to Nielsen/NetRatings). However, the TV network has fared poorly, consistently drawing about half as many viewers as CNN and one-quarter as many as Fox News.

After denying rumors of a split for more than a year, Microsoft and NBC finally announced in Dec. 2005 that the status of their joint venture is changing. Microsoft has sold most of its stake in the MSNBC TV network, giving NBC an 82% share now, with the option to buy the remaining 18% after two years. NBC says the deal will help it better integrate MSNBC into its other news organizations, including NBC News and CNBC, a cable TV network devoted exclusively to business news.