WOW! Breaking News! MSFT selling Sidewalk to Ticketmaster:
nytimes.com
<<Microsoft Set to Sell City Guides to Rival
By BOB TEDESCHI
In what would be a major consolidation in the online city guide business,
the Microsoft Corp. is on the verge of selling its Sidewalk network of
city guides to Ticketmaster Online-Citysearch Inc. for $240 million in
stock, people close to the negotiations said Sunday.
Under the terms of the deal, Microsoft would own a 9 percent stake in
Ticketmaster Online-Citysearch, with the option to increase that stake to
13 percent.
Sidewalk and Ticketmaster Online-Citysearch,
which both offer online information about local
entertainment, news and shopping in dozens of
cities, have been in close competition since
Sidewalk started its first local site in early 1997,
several months after Citysearch launched.
As part of the Sidewalk deal, Microsoft would
direct users of MSN, its network of Web sites, to
the online event-ticketing operation of
Ticketmaster Online-Citysearch. MSN would
also launch a new local channel on its network,
relying heavily on Citysearch to provide content.
Microsoft will retain ownership of Sidewalk's
buying guides and searchable business directory
and integrate them into MSN. Ticketmaster
Online-Citysearch plans to eventually fold the
Sidewalk sites into its network of Citysearch sites
and phase out the Sidewalk name, people close to
the negotiations said.
In recent months, Microsoft has shifted Sidewalk
away from its initial emphasis on arts and entertainment, as an anticipated
boom in advertising from restaurants and theaters failed to materialize.
Instead, it veered more towards a model based on electronic commerce
and product information, adding shopping features through its acquisition of
Comparenet.
Meanwhile, Citysearch has stayed closely aligned with the entertainment
scene in the cities it serves, providing news about local performances and
the ability to purchase tickets. It has also added a personal dating section
and local auction capabilities to its sites.
Pending a final agreement, Citysearch would more than double the number
of city sites it runs, from 33 to 77 worldwide. Citysearch, now the third
most-popular city guide network as measured by the Internet research firm
Media Metrix, would take over the first-place spot from Sidewalk,
attracting an estimated 7 million monthly visitors. Citysearch would reach
nearly 11 percent of Internet users in the United States each month, putting
it among or close to the top 20 most-visited Web site networks.
America Online's Digital Cities would remain in second place among city
guides, with a 6.3 percent reach. New York Today, owned by The New
York Times Co., competes with the city guide networks in the New York
market.
An agreement to sell Sidewalk would be noteworthy in that Microsoft
rarely sells its properties. Last year it sold Softimage, a computer graphics
firm, to Avid Technology for $285 million in cash and stock. At the time, a
Microsoft spokesman said it was the first time the company had sold an
entire subsidiary to another company.
The move would also represent another step in the evolution of Microsoft's
strategy on the Internet. The company has been moving away from
offering content, like Sidewalk's event listings, and emphasizing services
and e-commerce transactions, as with Carpoint, a car buying service, and
its Expedia travel site.
In its initial incarnation, MSN was a content-heavy entity, with a schedule
of "shows," its online magazine Slate, and the Sidewalk sites. Microsoft has
altered that mix, promoting services like Carpoint and MSN Investor, a
financial information site. In March, when it bought Comparenet, Microsoft
said it planned to move more aggressively into e-commerce.
The Sidewalk deal is also noteworthy in that the relationship between
Microsoft and Ticketmaster Online-Citysearch went beyond rivalry. In a
suit against Microsoft in February 1997, Citysearch, which had recently
signed an agreement with Ticketmaster to provide ticketing services for its
city cites, sued Microsoft, claiming that Sidewalk was illegally linking to
pages deep within the Ticketmaster site. In essence, Citysearch argued
that it was paying Ticketmaster for the right to do what Sidewalk was
doing for free.
But when Barry Diller, chairman and chief executive of USA Networks,
purchased a controlling interest in Ticketmaster last year, the acrimony
faded, and the companies settled the suit in January. The warming of
relations continued through the spring, people close to the negotiations said,
as the companies negotiated the current deal.>> |
