Microsoft breaks from NBC to launch own news portal

SAN FRANCISCO—Software giant Microsoft has parted company with NBC News, pulling out of their joint venture MSNBC to launch its own online news service, the two companies announced Sunday.

Moving on “allows us to go out and innovate,” Bob Visse, general manager of MSN.com, said, confirming that MSN.com had begun hiring for a new news operation — as yet unnamed – that will launch later this year.

“If you start thinking about what we’re going to be doing in Windows and the Bing app and what we’re going to be doing… across multiple platforms, it makes a lot of sense for Microsoft,” he said.

“We’re talking about using technology and using data to solve information delivery and news delivery in new and innovative ways. It’s really difficult for us to do that when we have an exclusive, single-source relationship with one news provider.”

Under the joint venture, NBC News had been the sole provider of news for MSN.com, which will now be free to forge partnerships with other media organizations.

NBC News said it would continue to provide news for MSN.com and would continue to sell the rebranded NBCNews.com‘s advertising inventory for an undisclosed period to minimize the disruption in ad revenue.

The deal means that NBC effectively buys Microsoft’s 50 percent stake in the MSNBC. No details of the financial arrangement were provided.

Anyone opening up the MSNBC.com website is now automatically redirected to NBCNews.com.

Microsoft’s move comes as other major Internet companies like Yahoo! and AOL have forged important alliances with news organizations.

Yahoo! teamed up with ABC News toward the end of last year to create a digital news powerhouse Yahoo! News, which is the top online news destination in the United States with some 80 million unique visitors a month.

Microsoft’s move comes just days after it announced it was cutting an unspecified number of jobs in marketing and advertising as part of a move to “align” its operations to key priorities.

The tech giant gave no specific numbers or details, but also announced a writedown of $6.2 billion in its online operations.

Microsoft, which is soon to release its new Windows 8 operating system, said last week it would take the massive writedown related to the 2007 acquisition of aQuantive, a digital advertising firm aimed at helping Microsoft compete against Google and others.

The charge, to be reflected in the company’s upcoming earnings report, is required under accounting rules to reflect a lower value or so-called “goodwill impairment.”

Microsoft announced earlier this month that its next-generation operating system would be available in October as the software giant strives to stay relevant in a blossoming mobile era centered on tablets and smartphones.

“This will be the biggest product and services launch year in our company’s history,” Microsoft chief executive Steve Ballmer said at an annual gathering of gadget makers and other partners in the Canadian city of Toronto.

The Windows 8 operating system, which is the norm for personal computers, will also be used on many smartphones and tablet computers, including Microsoft’s own Surface tablet to be launched this year.