NBC Pours Internet Assets into NBC-Snap-Xoom.Com Venture

Computergram International, May 11, 1999

NBC Inc is consolidating some of its internet assets into a new spin-off in combination with CNet Inc's Snap and Xoom.com in a bid to grab more traffic in one place. The new company, called NBC Internet, or NBCi, will comprise the NBC-Snap.com joint venture, Xoom.com's web community site and several of the main NBC internet properties. It amounts to an endorsement of Xoom.com as Chris Kitze - that company's chairman, will become the president and CEO of NBCi. However, the address and branding will be that of Snap.com, partly because of the investments already made in the name and partly because nbci.com and other extensions are already taken.

The new company, which will float on Nasdaq later this year once the deals have closed, will be NBC's sole web presence. It will buy $380m of network television advertising from NBC over the next four years and an additional $500m over the next six years. NBC is pouring all of Snap, www.nbc.com, www.videoseeker.com, Interactive Neighborhood and 10% of www.cnbc.com into the company. The MSNBC site and content will remain as a separate venture with Microsoft Corp. NBC believes it will make Snap.com the seventh largest website in terms of registered users.

Once the deal is complete, which is expected to happen in the fall, NBC, which is owned by General Electric Inc, will own 49.9% of NBCi and will control six of the 13 seats on the board. It will also purchase a convertible debt instrument, which if exercised will result in it owning 53% of the company and naming the majority of the board. Assuming that conversion, Xoom.com will own 34% and CNet 13% of NBCi.