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Microsoft exits

The last of the new/old media team-ups ends

Microsoft has sold its stake in news website, marking an end to the heady period of integration between new and old media giants epitomised by the 10-year-long merger of AOL and Time Warner, which began in January 2000 and ended in December 2009.

Microsoft joined with NBC, the veteran American broadcaster, to create the 24-hour news channel MSNBC back in 1996, and the two companies built the joint venture into something which could compete with CNN and Fox News on its own terms. Often with a pronounced liberal viewpoint, the channel was known for its strong focus on political news, and became closely identified with its outspoken anchor Keith Olbermann. In 2005, however, Microsoft disinvested itself of the news channel. The company had been struggling with its relationship to TV news for years, with CEO Steve Ballmer saying in 2001 that, "if we were starting it now, as good an operation as it is, I don't think we would have started it".

The channel's website stayed a joint venture, however. was an easier fit for Microsoft, but still led to problems for both companies. NBC was frustrated by the internal competition between its own, fully controlled, and its 50 per cent share in, as well as being hurt by the inability to sell adverts on MSNBC as a package with internet and television components. Microsoft, meanwhile, did not appreciate being forced to have its main news portal rely exclusively on one provider, as Bob Visse, general manager for MSN, told the Associated Press:

Being limited to content was problematic to us because we couldn't have the multiple news sources and the multiple perspectives that our users were telling us that they wanted.

As Tim Carmody argues at the Verge, the most interesting outcome of the news is that Microsoft will reportedly be starting original online reporting this autumn:

MSN will be building a brand-new news team of approximately 100 journalists, or roughly the same size as the original group of reporters behind at its launch in 1996.

MSN's pairing of an online portal with original news puts them in competition with similar sites like AOL and Yahoo. But for stories and placement on MSN's home page, the new news outfit will now also be competing with its old partner

As new media and old media both converge to being simply "media", it seems that old allies are becoming new competitors. But the outcome of that competition remains very much up in the air.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.