NBC to Swap $880 Million in Television Ads For 49.9% Stake in NBCi
NBC to Merge Some Web Assets
With Xoom.com, Snap Properties
NBC to Swap $880 Million in Television Ads
For 49.9% Stake in New Firm, Dubbed NBCi
An INTERACTIVE JOURNAL News Roundup
NEW YORK -- General Electric Co.'s NBC network said Monday it
plans to merge several of its Internet assets with direct marketer
Xoom.com Inc. and portal site Snap.com to form a new company called
NBC Internet, or NBCi.
Snap, CNET Inc.'s portal site, is already partially owned by NBC.
NBC and NBCi have entered into an
agreement for NBCi to acquire $380
million in advertising on the NBC
television network over the next four
years and they said they have targeted an
additional $500 million in advertising over
the following six years.
Wright to Be Chairman
Bob Wright, president and chief executive
officer of NBC, will become chairman of
NBCi. Chris Kitze, the chairman of
Xoom, will become president and chief
executive of NBCi.
NBC has been itching to operate a major
portal site that is competitive with other top-tier services. The company
already has a controlling interest in Snap, but that site lacks a broad-based
community service and lags well behind the major portal sites.
Xoom also derives close to 70% of its revenue from electronic commerce,
rather than the advertising revenues that support most other major
community sites. Xoom commerce revenues stem from transactions
resulting from product solicitations it sends to members via e-mail.
In all, NBCi will consist of NBC, Snap, Xoom and several NBC-owned
Internet properties. These properties include NBC.com, NBC's
Interactive Neighborhood, Videoseeker.com, and a 10% ownership stake
in the new CNBC.com, which will be launched later this summer.
NBC to Have 49.9% Stake
At the conclusion of the merger, NBC will own a 49.9% stake in NBCi
and will name directors to six of 13 board seats. NBC will also purchase
convertible debt which, if converted at a future date, could result in
additional ownership of NBCi and the ability to name a majority of the
board. Assuming conversion of the debt, NBC would own a 53% stake,
CNET and Snap.com option holders would own a 13% stake, Xoom
shareholders and its option holders would own a 34% stake.
"This is an NBC strategy to do everything we
can to have a major position in the Internet,"
said NBC's Mr. Wright in an interview on
CNBC Monday morning. "We have lots of
investments and this is a great way to pull them together and hopefully get
a great service position in the Internet with these wonderful web sites."
Tom Rogers, president NBC Cable, said in a statement that the merger
"will result in an exciting company for investors and consumers alike. It
creates a unique public company ... which will be NBC's exclusive general
Internet portal, and through the integration of all these Internet properties
provide a major new all-purpose site, that is exceptionally well-positioned
for the broadband world to come."
MSNBC.com isn't part of the deal and will remain a 50-50 joint venture
between NBC and Microsoft Corp., NBC said. Snap will continue to give
MSNBC.com premium positioning on the new merged site. CNBC.com,
the general finance and personal investment portal scheduled to launch this
summer, will have a preferred direct commerce relationship with the new
company. |
