NBC Launches New Internet Company
AP Online, Tuesday, November 30, 1999 at 17:21
By SETH SUTEL
AP Business Writer
NEW YORK (AP) - NBC formally entered the cyberspace land grab on
Tuesday with its launch of NBCi, a new company wrapping together
several of the network's online assets as well as the Snap portal
site and the e-commerce company Xoom.com.
NBCi, which will be based in San Francisco, also announced a
deal with Clear Channel Communications Inc. to promote NBCi's
services on the Web sites for Clear Channel's 425 radio stations.
NBC will contribute to the venture several of its Web sites
including NBC.com, content from its television shows, and $400
million worth of TV advertising. NBC first announced the deal to
create NBCi in May.
The network, which is a unit of General Electric Co., will own
47 percent of the new company, while stockholders of Xoom.com will
own 39 percent and CNET, the former parent of the Snap portal, will
own 14 percent.
The publicly traded shares of Xoom.com were converted on a
one-for-one basis to stock in the new company, which began trading
on the Nasdaq Stock Market Tuesday under the symbol NBCI.
In anticipation of the launch, shares of Xoom.com soared $17 to
$88.50 Monday. The stock gave up much of those gains Tuesday,
slipping $14.50 to $76.
The high stock price gives the new company a value of about $4
billion and a war chest for making acquisitions. NBCi's new
president, Xoom.com's co-founder Chris Kitze, said the company
would be looking at purchasing opportunities, but he declined to
elaborate.
In a similar move to tap investor enthusiasm for Internet
stocks, the Walt Disney Co. set up a separate stock in November to
track the company's online ventures, which are grouped under the
name Go Network.
CBS has also been making several Internet investments, usually
taking large equity stakes in Internet companies in exchange for
promoting them on CBS's TV, radio and billboard properties.
NBCi includes many, but not all, of the network's online
properties. Not included are the MSNBC news channel, a 50-50 joint
venture with Microsoft Corp., or CNBC. A portion of CNBC's Web site
is included in NBCi, however, and both stations are likely to be
mentioned prominently on NBC Web sites. |
