Microsoft and NBC have announced they are parting ways after 16 years of partnership, ending one of the greatest early dot com era experiments of delivering online news. The split will now allow both parties to explore new ventures with different partners.
The breakup news came late Sunday evening, dissolving the only string remaining between the two companies, whose relationship began to unwind in 2005 after Microsoft sold its stake in MSNBC's cable TV channel to NBC.
While the exact terms of the separation have not been disclosed, New York Times reports that with the buyout, Microsoft will be receiving $300 million for its stake.
MSNBC.com has now been rebranded as NBCNews.com and users are being automatically redirected to the new website.
NBC President Steve Capus said that both companies enjoyed an exceptional relationship, but the time had arrived for both to allow themselves some freedom.
"NBC and Microsoft were in a relationship where it was only going to be the two of us, and that precluded Microsoft from doing some stuff with different news organizations, and it precluded us from doing things with other technology and online companies," he said. "We're excited about being able to go out and do business with other partners."
Vivian Schiller, chief digital officer for NBC, said that the breakup was amicable and the competition that now lies ahead of them will only make them better.
While both companies insist that the breakup is harmonious, diverging ideologies and limitation on sales were the most obvious reasons that led to the split. Microsoft, in particular, had grown tired of being restricted to exclusively feature only MSNBC.com content on its websites and wanted to get more freedom online.
“Being limited to MSNBC.com content was problematic to us because we couldn't have the multiple news sources and the multiple perspectives that our users were telling us that they wanted," said Bob Visse, general manager of Microsoft's MSN portal and a board member of the former MSNBC joint venture.
As both companies look forward to chosing their own paths, NBC has already outlined plans to create a new online destination for the MSNBC cable channel personalities by next year as part of its online restructuring effort.
Meanwhile, NBC will continue its presence on MSN for the next two years until it develops enough brand clarity for people to know which brand does what.