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To: robert duke who wrote (26049)	7/20/1999 1:31:00 AM
From: Islander99	Respond to of 41369

How the mighty have fallen. Microsoft had such hopes for MSN Sidewalk at one time. Now Barry Diller owns it. Tuesday July 20 1:03 AM ET Microsoft To Sell City Guide For $280 Mln By Martin Wolk SEATTLE (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) said Monday it will sell its MSN Sidewalk online city guide to rival Ticketmaster Online-CitySearch Inc. for about $280 million in stock, ending one of the software giant's most ambitious media ventures. Under the deal, Ticketmaster Online-CitySearch will get Sidewalk's local arts and entertainment listings covering dozens of cities and will become the exclusive provider of local guides, online ticketing and personal ads on Microsoft's MSN Internet portal. Microsoft will take a 9 percent stake in rapidly growing Ticketmaster Online-CitySearch, which could rise to 13 percent if all warrants are exercised. The software giant will retain Sidewalk's Yellow Pages business listings and buying guides. Sidewalk was launched in late 1996 amid fanfare and predictions that Microsoft would prove stiff competition for local newspapers and others as it rolled out the service in cities nationwide and overseas. Microsoft ultimately opened 10 local offices to provide editorial coverage but last year cut back staff by about 25 percent and said it was shifting emphasis to commerce. ''We've looked at this limitless opportunity and decided that we really wanted to focus more and more on commerce, and that meant making some difficult decisions,'' Sidewalk business unit manager Matt Kursh said. ''The arts and entertainment business is something that is more difficult for us to really make into a major revenue source, although it is absolutely a major attracter of users to our site,'' he said in a conference call with analysts and reporters. Lisa Allen, a senior analyst at Forrester Research, said the deal was a good one for both companies, although it also demonstrated that Microsoft will never be a media company. ''There are some things Microsoft does very, very well,'' she said. ''This hasn't been one of them.'' She said the deal clearly reflects Microsoft President Steve Ballmer's focus on getting bottom-line results from the company's extensive Internet investments. Microsoft also has been studying the possibility of creating a separate tracking stock to unlock the value of its Internet properties, although Kursh declined to comment on whether the sale of Sidewalk was a prelude to such a move. The deal solidifies Ticketmaster Online-CitySearch's position as the leader among local Internet guide services, although it faces difficult competition in some markets, analysts said. Ticketmaster Chief Executive Charles Conn said the deal, expected to close in the fall, would add about $10 million to revenues in the first year and increase the company's coverage to 77 cities from 33, including new offices in Seattle, Boston, Minneapolis and Chicago. ''We think the expansion gives us a much more interesting set of things to offer,'' Conn said. Analysts said the sale of Sidewalk raises questions about the future of some of Microsoft's other Internet properties including the CarPoint auto buying directory and Home Adviser real estate site. Ticketmaster will pay Microsoft seven million Class B common shares, worth about $280 million, and 4.5 million warrants to acquire shares at from $30 to $60 each. Ticketmaster surged $6.06 to $40.06 in heavy Nasdaq trading, while Microsoft was off $1.06 at $98.375. Ticketmaster will get rights to the Sidewalk name, although Conn said the company had not yet decided how to use it. About 90 Microsoft employees are affected, and Conn said they likely would be able to find jobs at Ticketmaster. Ticketmaster is controlled by Hollywood executive Barry Diller, who earlier this year failed in an effort to buy Internet portal Lycos Inc (Nasdaq:LCOS - news) and merge it with Ticketmaster and Home Shopping Network, a unit of his USA Networks Inc. (Nasdaq:USAI - news) Inc.