Microsoft to launch online news service after MSNBC.com sale

Microsoft has sold its 50 per cent stake in the MSNBC.com website for an estimated $300 million (£192m) and is set to launch its own online news service later this year.

The deal ends a 16-year joint venture between the software giant and NBC Universal, the US media group that is majority owned by Comcast.

The two companies joined forces in 1996 to create a cable channel and online news operation. At that time, Microsoft invested $220m for its stake in the joint venture. In 2005, the partnership operating the MSNBC cable channel was terminated and NBC was acquired by Comcast four years later.

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Yet Microsoft had grown frustrated by contract terms that forced it to exclusively feature MSNBC.com content on its own websites, including MSN.com.

Bob Visse, general manager of MSN, said “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.”

Microsoft, which is run by chairman Bill Gates and chief executive Steve Ballmer, is preparing to launch its own news service this autumn and Visse said around 100 people will work for the new website. That is roughly the same as the number who provided content for MSNBC.com, which attracted nearly 50 million visitors in June.

NBC News said it will be able to attract more traffic to its stable of websites by forging other partnerships that were off limits when it was tied to Microsoft.

Chief digital officer Vivian Schiller said: “There is no question that we are going to have more flexibility to make our own decisions. This is really an amicable breakup. Competition will make us better.”

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